Stormy Kromer
Thinks s/he gets paid by the post
- Joined
- Oct 1, 2017
- Messages
- 1,160
DW announced that our next move is going to be from our house in the northern Minnesota woods to an apartment in a small city south of here closer to our children. This won't be for another 5 or 6 years. My question for all here is from a financial point of view.
We haven't had a mortgage in years and the thought of paying rent each month doesn't appeal to me. I know that living in a house isn't free, even when it's paid for. The opportunity cost on the money invested in the house alone would probably cover our rent, not to mention the savings in utilities, property taxes, insurance routine maintenance and most of all the updates necessary every few years like a new roof, siding, well, septic.....
Anyway. For those who have made the switch from your private home to an apartment how has it went for you ?
I'm thinking of taking the sales proceeds from the house and investing it in a balanced portfolio at Vanguard in something like their Balanced Fund, or possibly 50-50 in a Total Stock Fund and a Total Bond Fund, and taking proceeds each month to pay the rent. The estimated sale proceeds should be around $250,000, if we take 4% of this amount it would give us $10,000 annually towards the rent. That, along with the savings in property taxes and insurance & utilities would easily pay the rent at the apartment we're looking at.
Does this sound like a reasonable approach ? My biggest fear is inflation. We'd both be in our early 60's and the rent could easily double or more in the decades that we're renting and eat up our house equity nest egg.
I'd appreciate any comments and advice from member's experience. Thank you.
We haven't had a mortgage in years and the thought of paying rent each month doesn't appeal to me. I know that living in a house isn't free, even when it's paid for. The opportunity cost on the money invested in the house alone would probably cover our rent, not to mention the savings in utilities, property taxes, insurance routine maintenance and most of all the updates necessary every few years like a new roof, siding, well, septic.....
Anyway. For those who have made the switch from your private home to an apartment how has it went for you ?
I'm thinking of taking the sales proceeds from the house and investing it in a balanced portfolio at Vanguard in something like their Balanced Fund, or possibly 50-50 in a Total Stock Fund and a Total Bond Fund, and taking proceeds each month to pay the rent. The estimated sale proceeds should be around $250,000, if we take 4% of this amount it would give us $10,000 annually towards the rent. That, along with the savings in property taxes and insurance & utilities would easily pay the rent at the apartment we're looking at.
Does this sound like a reasonable approach ? My biggest fear is inflation. We'd both be in our early 60's and the rent could easily double or more in the decades that we're renting and eat up our house equity nest egg.
I'd appreciate any comments and advice from member's experience. Thank you.