Thank you for confirming our choice. My husband and I have been "house poor" our entire marriage. Our children are scattered across the country. We are tired of the upkeep. We recently sold our home at the top of the market and bought a mutual fund with the equity. I feel free! We can travel, relocate if we choose to, and always have the option of buying again, but right now it's not even on our minds!
I recently retired at 60 with almost 1 million. The last time I was a homeowner was 25 years ago when I was married. The freedom I have enjoyed as a renter has been ''priceless'',..as I was also able to travel, enjoy life, invest wisely, and retire early without the burden of home ownership. At this stage of my life, I don't really care 1 bit about building equity because it really is of no consequence to my life now. Also,..having the freedom to move on if an area doesn't work out is important. Rents may go up,....but then so does property taxes and home repairs. Renting has worked well FOR ME,.....no need to change now.
this is the flip side of that argument about equity, which is a very attractive argument!! Why have equity? The whole reason for it (when I was younger) was to have something to sell in retirement and afford travel. makes sense.
Hey Tony, we’re 55 and and planning to do the same. When I’m retired in 6 years, hopefully less, I want to live like I’m 15 again with no home responsibilities, and no grass cutting, trimming, leaf raking, etc. Fishing, sailing, and bicycling to the beach will be my daily activities. No more to-do lists for anything home related. Plan to have plenty of cash when we sell our house near Charleston SC, to supplement our income until Medicare and SS kick in, trying to keep our taxable income low enough to qualify for Obamacare. Hurricane comes? Drive away. Live somewhere else. No worries, no rebuilding. Have $2M net worth today. Expect rent to be about $3-4k.
thanks for all the info. I go back and forth on this all the time. I feel like my home (for now) has a stable monthly cost. I had thought about paying it off quickly, but realized that I would only be saving 527 a month on the total afterwards, so I am not going to kill myself to do it. It is cheaper than any rent in my area, by about 600 dollars. the taxes and insurance goes up, but nothing like the rents.
I never owned a home. Rented for 20 years. Never thought nothing of it till 3 years ago when it realized what I wanted to do after retirement, slow full time travel. Now 20 years later I’m retiring the end is f this month at 51. A house would limit that for me. I’m still saving for a home for just incase in the future, but I don’t want my goal in life to be a home owner. I’m never there now so it wouldn’t make sense for me to invest in something I won’t be in much.
As someone who will retire in the next 12-18 months I have been thinking about this. I really do not know where I want to live and have been all over the map from buying a home to an RV. I think renting is a great option to consider. I think this is why many move into retirement communities. Which is a subject you should do a video on.
I've been renting while I figure out where to be permanently. Meanwhile, real estate prices as well as rents increase. Most of my landlords have been nuts; one is at their mercy. I'd like to own a small, one story home with lots of privacy where I can have a nice garden and pets. Wandering around looking for a rentals when I'm very elderly is a scary prospect; I hope to be permanently settled before then.
After 30 years of owning homes, I’m excited to cash out in the next few years and rent. It not only seems to make financial sense but it’ll give my wife and I more time to enjoy life (no more sunny days wasted mowing) but give us the opportunity to experience changes in our environment every couple of years by moving to new locations. Moving, that is, without closing costs, commissions, mortgage tax, title insurance, etc.
Great tips 👍 Upkeep would certainly be a good reason to rent. Also, if the apartment burns down, or somehow damaged, you can simply find another place to rent. However, currently many rentals are much more expensive than mortgages. Also moving closer to the kids might seem like a good idea, but could quickly turn into a mess.
The great choice about renting is you can actually choose which ones you rent and which ones you don't. The ones you don't like the price you can simply not choose them
You know there are people who go their whole lives renting and are perfectly happy. Its different strokes for different folks. As long as you understand all the pros and cons of owning vs. renting and make an educated decision there is no wrong choice.
Yes, I worked at a place in a small town that attracted city folk. I knew a couple people that were displaced because the owner died, the building was sold, and even a highway being widened. None of them were happy about looking for a new apartment.
Some great points! Been thinking about that myself since we are planning on rv'ing 9 months a year. Love the crazy8 ball in the background. Great decisionmaking tool!
That is an idea that had been thinking of, We have an Airstream and would love to travel for several months while renting out my house through an AirBnB or something similar.
I just did a quick calculation comparing owning vs. renting. If I invest the likely sales proceeds from my home and withdraw 5% per year, add in what I save by not paying taxes/insurance/maintenance, it's actually cheaper to rent (where I'm at anyways). I presently have no intention of selling my home but... one can in fact make a strong argument for renting in retirement - especially when it becomes too difficult or impossible to do all the routine maintenance yourself. So for the most part, the comparison if less of a financial one and more of a lifestyle one.
I bought my house in January 1987. It was a real fixer upper, but the market was high in the 80's and to find a place that had some land (1 acre) and wasn't so poorly built that would require tearing down at entry level prices took a lot of looking. After a lot of sweat & blood I was able to make it not only livable but somewhat nice (modest but nice). I managed to payoff the mortgage early and thought that I finally could kick back a little with it being paid off. It never occurred to me when buying even a repair prone house that after insisting on a fixed rate mortgage that I knew I could afford knowing the amount of the mortgage, that the taxes alone right now are higher than the combined mortgage with taxes were when I bought the house! And I refinanced at one point since interest rates kept dropping since 87 from over 9% which was considered a good rate. But I remember people paying over 17% on mortgages previously. So bear in mind that expenses will likely go up even if you own the house especially if you want to live in the NE!
Nothing wrong with renting at all. My mom is single and aging. Her house is becoming so difficult for her to maintain by herself and now the burden is falling to me! I notice that when single people age, their homes tend to fall into disrepair. Also, I am terribly worried about my mom's safety and would feel very relieved if she were living in a nice apartment with people around.
Americans have been almost brainwashed into thinking renting is this awful, horrible thing and everyone must be a homeowner as quickly as possible and never stop. It’s just silly. I’ve rented my entire adult life and there are lots of benefits to it. I’m currently single and not very handy, so I’m not interested in trying to maintain a property. I’ve seen the issues my brother has run into with a new build house and it scares the hell out of me. I think the key is financial planning. A mortgage is a forced savings plan that can benefit people who don’t wanna make the sacrifice of saving and investing over their working careers. They use the equity from that home as they age to cover some expenses. But I have a savings plan. I contribute a certain amount from each paycheck towards investments and I increase that amount each year as my income grows. I also have a pension that will replace half of my final salary when I retire. As long as you’re planning ahead and putting your money to work for you, you could be a renter your entire life and be quite comfortable.
I think the key is flexibility. I am 13 years from retirement and already planning out where I want to live. I don't plan to rent. However, the risk is buying a home in place you have never been to or lived before and find out later the city, state is not so great. Wanting to sell is transaction cost taken by the realtor.
Would you post a video about the implications of selling your home and not reinvesting the proceeds in real estate? You mentioned here about investing in conservative income producing assets, but didn't go deep on what hits you may get from capital gains, and other factors. Thanks. Great content!
Although I would LOVE to get rid of the chores like repairing things around the house, the rents around my area are more than I pay for a mortgage. I have a friend who pays about 2x what I pay and lives in a high rise apartment building in a different part of NJ. My mortgage isn't cheap but it is affordable, we thought about going into a 55 and older community but decided to stay put to be around our children for now. The only thing I think is bad about renting is you are paying off someone else's mortgage and may be paying more than you would in a mortgage ... other than that it could be a good thing!
I think rent only works if you have the money to throw away. I agree home maintenance and repairs can be a pain but most rents are outrageous these days.
I personally like renting since I don't have much stuff. When I own my home, I had too many stuff that I didn't need. I own my car because leasing is not financially sound.
This is a subject where there will always be folks with different opinions. Each option has its pluses. And depending on one's desires either could be ideal. I know folks that own their own home and have neighbors from hell. At least when you rent, you can always say "They will be gone when their lease ends." Which usually happens.
I see this alot in the suburbs. There is always the possibility that in a really great neighborhood, a young couple will get financing together and buy the home next to you with really complex landscaping and it really looks great. Two years later this same home looks like a tenement: you could bale the grass in the front yard, garbage and kids toys are strewn everywhere, the sding needs cleaned, the spouting is hanging. Their property, their businss, right? Except the house you purchased all those years ago has lost $20-$30K on resale value....this most certainly will impact you.
Having this issue when my spouse and I retire. Want to sell my home and move away but not sure of buying another home. I don't want to burden my kids with having to sell my retirement home that is in a different state.
I have owned my home for 42 years and it has long since been paid for. And due to tax laws for seniors the taxes are pretty low. In fact I put back $265 a month so at the end of the year it goes to pay my property taxes and homeowners insurance. No way I could rent anything even close to safe and non ghetto for that price anywhere in Houston. In that 42 years I have replaced two roofs, three water heaters, faucets twice, and three HVAC changeouts. Sometimes I actually think of the coin I could make selling this place but the high rents would drain that windfall in about 15 years. But at the cost of houses today I can easily see a lot of people being permanent renters by default.
Renting...hmmm, when we bought our house in 1996, we thought stairs/2 story? no way! 1700 sq feet, great for family, not too big when the wee ones grew up. It was also important to live in a stable area. I scoped out a few areas before buying. Desert landscaping will come in real handy later on. (my Mom sold her paid for house to live in an apt with her friend, triple the cost, taxes only, vs 900.00/ month. She died penniless.) Big Lesson learned.
I think the complete opposite. I want no maintenance, and better location closer to the beach and marina. Bike able and walkable. Don’t want to have to drive to get everywhere. No home to-do lists anymore. No worries about the house getting hurricane damage, or paying the huge wind deductible.
a lot of good points - Accessibility is a BIGGIE because although there are a lot of people who can climb steps and sleep on the 2nd floor until they're well into their 90's, even more can not. This is one of the biggest issues I've seen in performing my job over the years. Even active people eventually lose their mobility, some are young-ish, and some carry on just fine until they are very elderly. A one floor home goes a long way in extending and accommodating your independence in either scenario. Rent or own, there's no shame in either one. Just an observation.
At age 69 and still fully employed, I just closed on. 15-year fixed 2.25% mortgage when our construction loan for a new retirement house matured. We paid off much of the principal at closing, but financed an amount equivalent to 15% of the total construction cost using cash set aside for that. Paying the full nut would have required selling appreciated assets and paying tax on realized long term cap gains. We plan to pay our mortgage off over the next several years using currently excess income (I have to start taking social security later this year) and the proceeds from a few municipal bonds that mature in the next few years. We have an equity-heavy portfolio and I see the mortgage payments as tax-free and risk-free bond-like investments. Where else in the fixed income market could I make 2.25% after taxes (not counting the mortgage interest deduction).
We are currently living in what I call our "investment condo" in a very nice community with many ammenties .I call it that because every ten years of its 45-year history) these condo's 'have increased in value by $100,000 very 10 years. Our plan is to live here until our savings runs out and then sell it and live off that money tor the rest of our life. We are no longer get up and go people as our health declines so that is not of any great value to us. Our next move will be to a senior apartment complex. without maintenance or property taxes. It costs a lot more to rent than to own in our area at this time so renting does not make sense at this time.
Interesting set of tradeoffs. My wife and I built our house 40-ish years ago on large parcel of land. Ideally we would like it to go to one of our kids to keep it in the family. We had a mortgage burning party years ago so our main home ownership expense is property tax about $550 a month. Both my wife and I have hobbies that take up a fair amount of space so moving into an apartment would be a huge lifestyle change. Having built the house we also do most of the ongoing repairs and construction ourselves but if that becomes too onerous we can pay to have the pros do the work, which is no different than if we lived in an apartment. At some point the house will probably be too much for us as we get more decrepit but hopefully that is a decade or so down the road.
I think about this frequently. We’ve been in our house for 15 years. Mortgage is nearly paid off, but I’m not in a hurry with the low interest rate. We live in a beach community on the east coast of Florida. Our mortgage is $480, our taxes and insurance come to $700 a month. So less than $1200. And we have fantastic neighbors. 15 minutes to beach. Houses rent for $2200 (in a not great area of town) and up from there. One bedroom apartments in new builds START at $1600. Seriously, I don’t know how young people pay those rents. I sometimes feel tired of the yard and pool maintenance, and we just had to put on a new roof. But, where would we go? Funny you mentioned Georgia and Mexico. We’re casually liking at Georgia and we used to own a vacation home in Chapala, Mexico. Pros and cons. No easy answers. I’ll probably stay with what I know.
You never own a home. You rent it from the government. You insure it, you warranty it, you fix and paint it, you mow the grass, spray for bugs, spray for weeds but they grow anyway. You pretend to be happy, you pay plumbers, roofers, receive scam phone calls every day, you slowly die from age and angst that you're wasting your life stuck in one place devoted to an all-consuming building. You've nearly forgotten the freedom of your youth, now you're bogged down making that monthly payment, likely in a bland car-dependent soul-sucking suburb a few miles from Walmart, always worrying about money, the Joneses, how your kids never call, the growing incivility in society and worsening cancerous American culture. Where is the darkness taking you and when does it end? Sooner than you think with a lot of pain. Renting is fun!
Mr. Smitch Sir....... You are so thoughtful in All Aspects before Retirement and during RETIREMENT with your insightful info...... Great Jobs, Sir 👍👍👌👌
Renting? Unpredictable landlord or apartment manager, no thanks. Cost for rental in East TN in 2021 is more expensive than my mortgage. As a single woman I purchased a one level home in an established neighborhood two years ago at age 69. Having good neighbors is worth any issues I may encounter.
Sounds like you've had trouble with a landlord before. I used to rent from the worst landlord on the East Coast, which was a real motivator to scrape together enough for a down payment of a fixer upper almost 35 years ago! Coming home to no water or hot water on a regular basis can really motivate you even though it seems like the maintenance is never ending and getting harder to keep up with (and I'm younger than you).
@@MILGEO Yes, George it is getting a bit harder to keep up with. I am lucky to have a mowing crew. Also, I have simplified the landscaping. All considered I do love having MY space. Hope you are doing well with yours!
@@j.m.7056 I do love having distance from neighbors and aside from the taxes, I generally like the area which I still do some work in. It's wooded with lots of outdoor area's close by though there are box stores, malls & restaurants close by.With a daughter just over the CT state line I just put up with the unfair taxes. Tenn. sounds like a nice place to retire from what I hear, are you from there or did you move there to retire?
Yes, but... there is nothing preventing your good neighbors from moving away while the new neighbors from hell move in. Also, when you rent, your only stuck with bad neighbors for the duration of your lease then you can move away from them.
Rent should be a temporary thing until you are ready to settle down,then rent becomes onerous. "Paying the landlord's mortgage" but moving is expensive and trouble,so owning for short periods might be more expensive than renting and moving frequently. Believe that landlords have to pay property tax,and guess what,they are going to pass that on to you,their renter.
I’m flipping with my daughter. She wants to raise her family in the house she grew up in. Im tired of lawn care and maintaining a house. Im going to sell my house to my daughter, invest that money in a mutual fund and go try apartment life for a few years.
@@j.m.7056 I've been in the same apartment for 22 years now and haven't had that problem luckily. But I have lived in houses that the neighbors were or more accurately than neighbors kids were annoying to say the least
Great video!!! I'm an Australian, and this is true for us as well. One further consideration, housing needs change, sometimes rapidly and usually when we are not expecting this. A disabling event like a stroke or life changing event, like a partners death, or worse, divorce can mean you are forced to "sell" in an unpredictable market and without control of the circumstances... Intense stress, anger and sadness color our perception and decision making... My partner and I are planning our home sale for favorable conditions post covid and when we are ready, and placing the assets in trust... Keep up the great work!!
I bought my little house in 1981. This was intended to be my forever home. Everything is on one floor. So long as I can make it up the two steps, I'm in. If I were to move, it would be a rental.
I would like to sell everything, including my house, and either retire early or work remotely but do so from different states and different countries moving every few months between furnished apartments. Do that for several years then come back and maybe buy a small house or condo with FAR less maintenance, both in time and money than my current home.
The property taxes are most likely baked into the rent anyway so I don't think that's an advantage. I do like the idea of not not having to fix things, but I've heard landlords aren't to keen on the idea of fixing things either.
It would be great to work with a builder or architect to have a house built but would cost a whole lot more money than just buying a house,such a house for an older person would have a groundlevel walk in main floor with such as kitchen,bedroom,washing machine room and bathroom all available without having to climb stairs,such a house would ideally be handicapped friendly as to wheelchairs and walkers_especially as to toilet and shower,bath. some such houses have elevators I notice that most of the giant monster houses being built around here have lots of stairs,even just to climb up to the main floor entryway, mostly are sold to young professionals but I don't think these houses would be friendly to older people once it begins to become harder to get around some of the new houses are constructed better than others,they do have some great views out of their upper story windows. Such things are for people with much more money than I have,I just would like to get out into the country where I can walk,garden,and hear spring peepers and katydids instead of the constant infernal traffic noise in Arlington that even drowns out most of the jet planes that follow their highway in the sky.
You mentioned in the video “Here in New York” I live on Long Island. Do you? I am asking this question because many times different geographic portions of our country have very different finances and calculations to their assumptions. You can be a vague if you want.
I am retiring this year. My wife and I have $59,000 in pensions plus $1.6 million saved. We own a 44 acre farm and LOVE living here. Why would I rent when I get so much enjoyment where I live?
I always click on your videos and enjoy them and agree most of the time but on this video I totally disagree with selling then renting, i.e. repairs to a property, if you are paying rent ,you are paying for the repair and then some to the landlord. For me its great waking up and knowing i'm not paying or owing anything other than the usual ware and tear, Here in Fl I have homestead exemption, the taxes stay almost the same year to year and property prices are skyrocketing, and so are the rental prices. I don't have to deal with snow and the sun shines most of the time.
You buy for investment. You want to have an inheritance to your children. Also, you want to make you’re not going to be kicked out by the landlord if they decide to sell the house. You can do whatever you want to your house and no one is going to say no to you.
Yes you can do whatever you want to your house but don't forget you also have to pay for it. Owning verse renting debates often don't mention this. If your goal is to make your house your dream house then yes owning is great. If your house is just a place where you live and your life revolves around other things then renting can make sense. I've been in the same apartment now for 22 years and my 401k reflects my choices. Of course my kids are grown and I don't need a house and all that square footage
I work in an independent retirement community. They have an apartment around 500 to 900 sq. Feet. A dining room and activities. I love the community. Great people. Their paying $2500.00 to $3000.00 a month. I own my home and outside is taken care of by the association. My living expenses are around $1200.00 a month. How in the world would you want to spend that much money in an independent living place? Their rent has gone up again and some are scrambling to find some where cheaper. Eighty and ninety year olds moving again. Pleas explain 😂😂
Sounds like you have a wonderful arrangement. Check out the companion video for your answer: 5 Reason to Own in Retirement th-cam.com/video/hq-REQGnwlA/w-d-xo.html
My rent went up 15% this year so I'm shopping around for something to buy. I'm thinking something bucolic. Maybe 5 acres with a small house on it. Update: I can't get a mortgage because I have no credit. I haven't had any debt for 15 years. Apparently, that is a bad thing.
And where can one find Conservative Income Producing Assets in this environment? Seriously. I enjoy your videos, but I would like to hear your thoughts on this. I mean, how can I keep up with inflation right now with a conservative investment. Thanks for your videos. Cheers from Alaska.
We will sell our house and invest the money. We gave no intention of EVER owning a house again. We will be living overseas in rental houses and traveling. Definitely not going to want deal with tying up funds in a house that may not get rented or will eventually need maintenance. If we have to come back to the US in very old age we might buy a small cottage or just rent. There’s always places to live somewhere. Increasing rent? Big deal. Move. That’s why it’s important to be financially independent in retirement and not living off the government. If you’re on a fixed income then yeah, stay in your paid off house and don’t venture out into the world.
If you sold your house, wouldn’t you have to reinvest the capital gains or pay taxes? What about renting your house out and renting someplace else? My mortgage (including taxes and insurance) is cheaper than a 1 bedroom apartment rental in CA.
Renting should be a good idea for a lot of retirees, but I have a elderly friends who lives in Florida on a very limited income of about $1,200 a month, and 5 years ago before covid she was paying $500 in rent and her income was about $1,000 or $1100. Now her rent is $1,000 which is the cheapest she can find in Florida. Her cash flow has gone from $500 to $200 and that is unsustainable. She is now planning on moving to Tennessee to live with her son but that situation it's going to be very difficult and I don't think it's going to last. But she feels like she is boxed into a corner. It's horrible! And besides all that, every waiting list for Section 8 or senior housing in Florida is closed. Does not even a way to get on a list.
I give 4 reasons why you should own your home property taxes is a lot cheaper then paying rent , your not at the mercy of a landlord, If you get into financial trouble you could sell your house and then rent a place and have cash left over, you can fix up your house to suit you don't need permission
I'm surprised you did not say smaller home. When the kids are gone you don't need some massive house, a two bedroom apartment is far easier to clean. Also if you are always traveling why keep a house.
If you don't want to do home maintenance yourself, accept that you will need to pay people to do it on your own home. If you rent, you must also accept that you will pay your landlord to do it, and they will in turn take a cut, and pay somebody to do it. Many of us will ideally retire with paid for homes that will accelerate in value such that we couldn't afford to rent them five to 10 years after retiring, let alone buy. (bleeding heart "fixed income" argument). I imagine it sucks to be in your 80's and get that letter from your landlord telling you to get out in 30 days as they are not renewing your lease.
While I've been watching your videos for several weeks and have found them good, this one causes a particule problem. Yes renting is always good when you might want to move (I think when your younger and don't know what you want) and only see yourselves in that property for two of three years. However, when you have a good idea of what you want, you should buy. Yes you might change your mind but you can always sell latter at a profit. In fact that anyone in the 45-year plus range should buy a property. With that said, at 65 it could make sense to sell it and rent. It won't be me though.
Thanks for the comment Rick, as I mentioned at the start of the video owning is the standard (and in many cases best) option for a retiree. However, everyone is different and this video explores some of the reasons when renting might make sense.
Sorry to burst your bubble Rick but that's just not true. The real estate market is never stable and you cannot always sell for a profit in true inflation-adjusted dollars. Home prices usually adjust well with inflation but... that's not always true as prices can fluctuate wildly based on circumstance beyond your control. Demand, interest rates, job market, crime, natural disasters, civil unrest, zoning and ordinance changes, and just the way neighborhoods change over time in general can make home ownership a risky proposition from a financial standpoint. It's a myth that buying a home is always a good investment when you do a real objective comparison of costs. The total costs of home ownership (principal and interest, taxes and insurance, maintenance and upkeep, etc.) usually exceed the cost of renting. This is especially true if you paid yourself an hourly rate for all the time spent mowing, blowing snow, fixing things, etc. (such as you could earn if you just did a part time job instead). Do this simple calculation. $3000 in closing costs on a home + $250 a month for the increased costs of owning vs. renting. Save that money for 30 years at 6% interest = $254,403.03. Considering that, do you really gain anything by owning? Maybe... but maybe not. My real point is this. Home ownership vs. renting is really less about financial gain than it is lifestyle/quality of life choice.
You did state that it could be good to own and I did say at the end of my reply that it could make sense to rent. Yesterday Jason James made a comment to my post that made me take action by answering his comment and now I realize I should've answered your message a couple of months ago. I have a pretty good position that pays well. I've have many positions over the years where I work with highly educated people. But 27-years ago I moved into a position where I work in the manufacturing of products. Once in that position I have taken it on myself to try an educate the people in those positions about what would be good to do for their future. Many of those people don't have good role models to make them understand what would be good for them so I try to fill in. I have tried to make an argument for things like owning a home and such. Many of their arguments are about not wanting to be responsible for maintenance etc. My argument to them is well what are you going to do when you retire and start living on a fixed income and your rent keeps going up? So I understand your take on this was for people like you and me that have generated a substantial amount of capital in their life and don't have to worry a whole lot about retirement. Here is the problem, you are posting to an opened site and everyone can see it. You didn't qualify your statement enough. All of those people who I'm talking about will be able to see it. So you need to be proactive and make the announcement. Here's the deal! All of us that have a good education, either through parents, Universities, or other basis's understand this video. All of the others will maybe understand or maybe not. @@HolySchmidt
Homes have been increasing in value by leaps and bounds. Rent is not that cheap and most landlords aren't that great at fixing problems. Some apartments don't have garages. You have to put up with noisy neighbors. Moving around often is a lot of work. Putting everything you have in some investment seems risky to me. NY is super expensive to live. I like CO and don't plan on moving somewhere else. We sold our two story and built a ranch style house with no mowing or shoveling for a minimal monthly fee. Many of our neighbors are also retired. I just wish everyone would just get the damn vaccine so the rest of us could get back to normal.
So, you only want your taxes to go towards education IF you have kids in the system? That might explain why the US has so many problems. I want an educated populace whether I have kids or not.
I think you might have this one backwards… There are a lot of wonderful homes that are designed for large families. Those homes appropriately have significant school tax bills. Those homes will attract families whose children will use the school system. But… schools also receive funding from other sources and those sources (State taxes and sometimes Federal) often provide funding based the number of children, their average test scores (aka Regents) etc. the fewer the kids in school the less funding the school receives..
@@HolySchmidt Respectfully, I think most financial advisors, who focus on individual rather than communal wealth, have just about everything backwards.
Secret is having lots of friends in different places. Visit each one through the year. Lol. Or family is even better. No need for a house or apartment.👍
"Transfer money to 'income producing' assets" he says. Like what? Housing is the best potential for the middle class. Stocks are like gambling, bonds have a miserable return. Not many options left!
I’d dig a little deeper on that one - perhaps speak to a financial advisor. Many retirees own convertible bonds from well rated utilities and nice dividend stocks from stable companies that are in boring businesses like food.
We have animals a lot! No way could we rent also I don't want a landlord telling us what we can and cannot do I like having my own house I can decorate the way I want I could go on and on I would say it depends on the your situation.
Some bad points! You worry about replacing your roof and taxes? The rent you pay has to cover home expenses or your landlord goes broke. If you don’t like stairs buy a one story home. Rent will always cost you more than owning. No tax write offs, you pay a realty company to manage your rental when you rent. Last, there is no guarantee that the money taken from the sale of your home will make you income…
I just had this conversation the other night with a friend. They thought everyone at my age should own their home and that renting was a lower class/status statement about me. I currently have my place up for sale because it is just too much for me to continue to keep up (old country house on 30 acres.) I am 62, single, no children or spouse therefore no one to leave it to. I want to relocate out of state and enjoy my retirement years and that may include a couple of different places. I don't want any ties to a property.
It’s not a good idea to make financial decisions based on status. There are so many stories about this I won’t even use a cliche’ to emphasize. The decision needs to be an informed one based on your personal situation. Spend time and understand your facts not someone else’s.
@@HolySchmidt Oh I don't care about someone else's "facts" based on a personal judgement about renters! That is what the entire conversation was about - someone else's idea of how I should be living my life vs how I will live MY life. I could not care less about what other people think, or how they would judge me for being a renter - hah!! I'll let them have the burden of "keeping up with the Jones."
Renting is burning your own money... I have a "double decker" (duplex) condominium, without the mortgage to start with (in NYC), and if worse comes to worst, I can rent it out and live on the profit wherever I want... Another consideration, if me, or my wife (or both) with the age became "less fluent" (or in reality need permanent support), I can make an arrangement for somebody capable to take care of us for allowing to live in the full equipped basement... Tell me if I am wrong... :)
I GAVE MY NEICE basically her down payment, this is some of her inheritance $ now when she really needs it not 20 yrs. later when she's planning retirement. I get to use her address for medicare and go/do what i want. The home is segregated. I got my area to myself and take care of property when i'm around for exercise purposes. But most importantly my ira withdrawals are taxed at my ~12% now (she pays the tax) instead of her paying ~32%. She will be forced to pay tax of my HARD EARNED $ within 10yr time when she is making 150+ a year, especially if i die sooner then later. Makes no sense! the last thing I want is the government getting my $. All i need is a ride to the airport
Renting is a bad choice for retirees and most people. Who wants to deal with a cheap landlord? Good luck getting the landlord to respond to any requests without having to threaten court action. Renting is like living in a hotel, but without all the amenities. It’s hard to personalize the living area since it’s not your house.
You are wrong on this one Schmidt. My sister did the best of two worlds. She moved into a single floor condo. All repairs and outside work is the association's responsibility. I have heard some real horror stories from retired renters. You may want to downsize your housing, but rent? The only worse move is people that sell out and live on the road in an RV so they can beat taxes. If you can't get around anymore, then sell out and put your name in for one of those efficiency apartments for old folks. If you can't get around anymore, how in the hell are you going to be a globe trotter?
As I mentioned there are lot of reasons to own, but I will note that your comment makes an assumption that most retirees would find incorrect and that is that retirees can’t get around - in fact most can and do quite easily. The rest is personal preference. Condos have association costs that can be massive if a major repair is needed and of course no one ever said to move into an RV…
You think renters do not pay for property tax and repairs? That'd be a sweet deal and a pretty stupid landlord! In reality, a homeowner gets a break on property tax in many places. A landlord has to pay the entire amount. Maybe the landlord doesn't collect enough for repairs, don't we call those "slum lords" ? Or maybe the building falls down? Sure, if you want to be a nomad it makes little sense to own real property. But if you want a familiar home base, or you still have hobbies that require tools and equipment then maybe you want a place of your own with a shed (or a shop) out back. And maybe you could consider selling later, or maybe a reverse mortgage.
Absolutely no way this makes any sense. Renting is far more expensive than owning. I could never live in a place that is not mine and where I would be limited in what I can do. What if I enjoy gardening? What if I like listening to music late at night? Would my neighbors get upset with that? What if the upstairs neighbor had a habit of running a vacuum early in the morning? I could go on. You really missed the target with this video.
Thanks Joe, you may want to watch this video then. 5 Reasons to Own (vs Rent) Your Home in Retirement th-cam.com/video/hq-REQGnwlA/w-d-xo.html Make special note of the beginning one minute…
Thank you for confirming our choice. My husband and I have been "house poor" our entire marriage. Our children are scattered across the country. We are tired of the upkeep. We recently sold our home at the top of the market and bought a mutual fund with the equity. I feel free! We can travel, relocate if we choose to, and always have the option of buying again, but right now it's not even on our minds!
I recently retired at 60 with almost 1 million. The last time I was a homeowner was 25 years ago when I was married. The freedom I have enjoyed as a renter has been ''priceless'',..as I was also able to travel, enjoy life, invest wisely, and retire early without the burden of home ownership. At this stage of my life, I don't really care 1 bit about building equity because it really is of no consequence to my life now. Also,..having the freedom to move on if an area doesn't work out is important. Rents may go up,....but then so does property taxes and home repairs. Renting has worked well FOR ME,.....no need to change now.
this is the flip side of that argument about equity, which is a very attractive argument!! Why have equity? The whole reason for it (when I was younger) was to have something to sell in retirement and afford travel. makes sense.
I have watched two other financial guys on TH-cam. Both are retired. Both rent. Flexibility and not tying up your money in a residence.
And yet you are on You Tube like the rest of us.
Hey Tony, we’re 55 and and planning to do the same. When I’m retired in 6 years, hopefully less, I want to live like I’m 15 again with no home responsibilities, and no grass cutting, trimming, leaf raking, etc. Fishing, sailing, and bicycling to the beach will be my daily activities. No more to-do lists for anything home related. Plan to have plenty of cash when we sell our house near Charleston SC, to supplement our income until Medicare and SS kick in, trying to keep our taxable income low enough to qualify for Obamacare. Hurricane comes? Drive away. Live somewhere else. No worries, no rebuilding. Have $2M net worth today. Expect rent to be about $3-4k.
1 million that's awesome, I'm happy for you TONY that's really good.
My last house in Billings MT was awesome, but it owned me. Sold in Jan, now renting in TX, will never own again.
Thanks for the validation.
Works for me. Im 62 and rent and I love the freedom. No hassles or worries.
thanks for all the info. I go back and forth on this all the time. I feel like my home (for now) has a stable monthly cost. I had thought about paying it off quickly, but realized that I would only be saving 527 a month on the total afterwards, so I am not going to kill myself to do it. It is cheaper than any rent in my area, by about 600 dollars. the taxes and insurance goes up, but nothing like the rents.
Love your videos. Well produced, no fluff, always learn something. Thanks so much for your channel.
I never owned a home. Rented for 20 years. Never thought nothing of it till 3 years ago when it realized what I wanted to do after retirement, slow full time travel. Now 20 years later I’m retiring the end is f this month at 51. A house would limit that for me. I’m still saving for a home for just incase in the future, but I don’t want my goal in life to be a home owner. I’m never there now so it wouldn’t make sense for me to invest in something I won’t be in much.
As someone who will retire in the next 12-18 months I have been thinking about this. I really do not know where I want to live and have been all over the map from buying a home to an RV. I think renting is a great option to consider. I think this is why many move into retirement communities. Which is a subject you should do a video on.
Let's face it, there is no perfect place or perfect lifestyle. To each their own.
If you own your home, there is no noise, cooking odors, loud neighbors, etc. Rents in my area are 1800.00 and up for a 1 bedroom.
You know. You just made a ton of sense right there! My wheels are spinning brother. Thank you for the boost of energy on this topic.
My pleasure. Thanks for watching!
I love the fact that Geoffrey has a magic 8 ball in the background!
I've been renting while I figure out where to be permanently. Meanwhile, real estate prices as well as rents increase. Most of my landlords have been nuts; one is at their mercy. I'd like to own a small, one story home with lots of privacy where I can have a nice garden and pets. Wandering around looking for a rentals when I'm very elderly is a scary prospect; I hope to be permanently settled before then.
After 30 years of owning homes, I’m excited to cash out in the next few years and rent. It not only seems to make financial sense but it’ll give my wife and I more time to enjoy life (no more sunny days wasted mowing) but give us the opportunity to experience changes in our environment every couple of years by moving to new locations. Moving, that is, without closing costs, commissions, mortgage tax, title insurance, etc.
Great tips 👍 Upkeep would certainly be a good reason to rent. Also, if the apartment burns down, or somehow damaged, you can simply find another place to rent. However, currently many rentals are much more expensive than mortgages. Also moving closer to the kids might seem like a good idea, but could quickly turn into a mess.
The great choice about renting is you can actually choose which ones you rent and which ones you don't. The ones you don't like the price you can simply not choose them
You know there are people who go their whole lives renting and are perfectly happy. Its different strokes for different folks. As long as you understand all the pros and cons of owning vs. renting and make an educated decision there is no wrong choice.
Actually, there is.
Yes, I worked at a place in a small town that attracted city folk. I knew a couple people that were displaced because the owner died, the building was sold, and even a highway being widened. None of them were happy about looking for a new apartment.
@@elliottpeabody1287 but the wrong choice is more about the person's choices than the actual debate of renting versus owning
Some great points! Been thinking about that myself since we are planning on rv'ing 9 months a year. Love the crazy8 ball in the background. Great decisionmaking tool!
That is an idea that had been thinking of, We have an Airstream and would love to travel for several months while renting out my house through an AirBnB or something similar.
Have been thinking about this subject for about the past 6 months. This reaffirmed a lot of my current thoughts. Thank you sir.
You bet
I just did a quick calculation comparing owning vs. renting. If I invest the likely sales proceeds from my home and withdraw 5% per year, add in what I save by not paying taxes/insurance/maintenance, it's actually cheaper to rent (where I'm at anyways). I presently have no intention of selling my home but... one can in fact make a strong argument for renting in retirement - especially when it becomes too difficult or impossible to do all the routine maintenance yourself. So for the most part, the comparison if less of a financial one and more of a lifestyle one.
For us, we are thinking the opposite.
Own a home, mortgage free is a major step toward retirement.
Look for my next video on 5 reasons to own vs rent in retirement…
I bought my house in January 1987. It was a real fixer upper, but the market was high in the 80's and to find a place that had some land (1 acre) and wasn't so poorly built that would require tearing down at entry level prices took a lot of looking. After a lot of sweat & blood I was able to make it not only livable but somewhat nice (modest but nice). I managed to payoff the mortgage early and thought that I finally could kick back a little with it being paid off. It never occurred to me when buying even a repair prone house that after insisting on a fixed rate mortgage that I knew I could afford knowing the amount of the mortgage, that the taxes alone right now are higher than the combined mortgage with taxes were when I bought the house! And I refinanced at one point since interest rates kept dropping since 87 from over 9% which was considered a good rate. But I remember people paying over 17% on mortgages previously. So bear in mind that expenses will likely go up even if you own the house especially if you want to live in the NE!
@@MILGEO Exactly! Whether you rent or own, there is no such thing as fixed predicable costs for housing.
Nothing wrong with renting at all. My mom is single and aging. Her house is becoming so difficult for her to maintain by herself and now the burden is falling to me! I notice that when single people age, their homes tend to fall into disrepair. Also, I am terribly worried about my mom's safety and would feel very relieved if she were living in a nice apartment with people around.
I’m with you. I’ve heard that story so many times from so many people.
Americans have been almost brainwashed into thinking renting is this awful, horrible thing and everyone must be a homeowner as quickly as possible and never stop. It’s just silly. I’ve rented my entire adult life and there are lots of benefits to it. I’m currently single and not very handy, so I’m not interested in trying to maintain a property. I’ve seen the issues my brother has run into with a new build house and it scares the hell out of me. I think the key is financial planning. A mortgage is a forced savings plan that can benefit people who don’t wanna make the sacrifice of saving and investing over their working careers. They use the equity from that home as they age to cover some expenses. But I have a savings plan. I contribute a certain amount from each paycheck towards investments and I increase that amount each year as my income grows. I also have a pension that will replace half of my final salary when I retire. As long as you’re planning ahead and putting your money to work for you, you could be a renter your entire life and be quite comfortable.
I think the key is flexibility. I am 13 years from retirement and already planning out where I want to live. I don't plan to rent. However, the risk is buying a home in place you have never been to or lived before and find out later the city, state is not so great. Wanting to sell is transaction cost taken by the realtor.
At 1:25, he said Georgia is a wonderful state that was close to Atlanta. 🙄😳🙄Holy Schmidt! I wonder if Florida is close to Orlando? 🤔
Lol. Florida is close to Orlando!
Would you post a video about the implications of selling your home and not reinvesting the proceeds in real estate? You mentioned here about investing in conservative income producing assets, but didn't go deep on what hits you may get from capital gains, and other factors. Thanks. Great content!
You just opened my eyes!!! I have been OVER thinking about what to do and you just gave me the most intelligent answer! Thank you very much!
Although I would LOVE to get rid of the chores like repairing things around the house, the rents around my area are more than I pay for a mortgage. I have a friend who pays about 2x what I pay and lives in a high rise apartment building in a different part of NJ. My mortgage isn't cheap but it is affordable, we thought about going into a 55 and older community but decided to stay put to be around our children for now. The only thing I think is bad about renting is you are paying off someone else's mortgage and may be paying more than you would in a mortgage ... other than that it could be a good thing!
I think rent only works if you have the money to throw away. I agree home maintenance and repairs can be a pain but most rents are outrageous these days.
I think it is only a good thing if you think you want to move around a lot, which is what he was pointing out.
Where are you renting that rents cost more than owning?😂
@@bluedouchemark4685 Just about anywhere in the United States. We are talking apartments, not rooms.
@@oldgoat1890 Maybe get a slightly smaller place in a cheaper area. I think we are still allowed to do that, I'll check with the government.
@@Couplescience I'm in Fl too, and you are 100% right, renting is a losers game.
I personally like renting since I don't have much stuff. When I own my home, I had too many stuff that I didn't need. I own my car because leasing is not financially sound.
This is a subject where there will always be folks with different opinions. Each option has its pluses. And depending on one's desires either could be ideal. I know folks that own their own home and have neighbors from hell. At least when you rent, you can always say "They will be gone when their lease ends." Which usually happens.
I see this alot in the suburbs. There is always the possibility that in a really great neighborhood, a young couple will get financing together and buy the home next to you with really complex landscaping and it really looks great. Two years later this same home looks like a tenement: you could bale the grass in the front yard, garbage and kids toys are strewn everywhere, the sding needs cleaned, the spouting is hanging. Their property, their businss, right? Except the house you purchased all those years ago has lost $20-$30K on resale value....this most certainly will impact you.
@@melblacke5726 that's exactly what happened to my grandparents. It was still actually in the city limit but one block from the suburbs
Who said I can't sell my house and move?
Having this issue when my spouse and I retire. Want to sell my home and move away but not sure of buying another home. I don't want to burden my kids with having to sell my retirement home that is in a different state.
I don't want to live among renters. You never know who your neighbors will be from one month to the next. I feel safer living among home owners.
Interesting, I fond that is a benefit of renting, you can leave easier than if a neighboring home is bought by irritating people.
Bad neighbors won’t drive your rent down.
@@platoon1081 Das tru. Damn if you do and damn if you don't.
Can you please advise a single person with no kids rent versus own you home?
I have owned my home for 42 years and it has long since been paid for. And due to tax laws for seniors the taxes are pretty low. In fact I put back $265 a month so at the end of the year it goes to pay my property taxes and homeowners insurance. No way I could rent anything even close to safe and non ghetto for that price anywhere in Houston. In that 42 years I have replaced two roofs, three water heaters, faucets twice, and three HVAC changeouts. Sometimes I actually think of the coin I could make selling this place but the high rents would drain that windfall in about 15 years. But at the cost of houses today I can easily see a lot of people being permanent renters by default.
Sounds well thought out.
I want to rent because I want to keep moving. And I don't want to do maintenance work.
Renting...hmmm, when we bought our house in 1996, we thought stairs/2 story? no way! 1700 sq feet, great for family, not too big when the wee ones grew up. It was also important to live in a stable area. I scoped out a few areas before buying. Desert landscaping will come in real handy later on. (my Mom sold her paid for house to live in an apt with her friend, triple the cost, taxes only, vs 900.00/ month. She died penniless.) Big Lesson learned.
~ To own is freedom. 👌
I think the complete opposite. I want no maintenance, and better location closer to the beach and marina. Bike able and walkable. Don’t want to have to drive to get everywhere. No home to-do lists anymore. No worries about the house getting hurricane damage, or paying the huge wind deductible.
As a home owner you still pay “rent”…. You pay property taxes don’t you?
a lot of good points - Accessibility is a BIGGIE because although there are a lot of people who can climb steps and sleep on the 2nd floor until they're well into their 90's, even more can not. This is one of the biggest issues I've seen in performing my job over the years. Even active people eventually lose their mobility, some are young-ish, and some carry on just fine until they are very elderly. A one floor home goes a long way in extending and accommodating your independence in either scenario. Rent or own, there's no shame in either one. Just an observation.
At age 69 and still fully employed, I just closed on. 15-year fixed 2.25% mortgage when our construction loan for a new retirement house matured. We paid off much of the principal at closing, but financed an amount equivalent to 15% of the total construction cost using cash set aside for that. Paying the full nut would have required selling appreciated assets and paying tax on realized long term cap gains. We plan to pay our mortgage off over the next several years using currently excess income (I have to start taking social security later this year) and the proceeds from a few municipal bonds that mature in the next few years. We have an equity-heavy portfolio and I see the mortgage payments as tax-free and risk-free bond-like investments. Where else in the fixed income market could I make 2.25% after taxes (not counting the mortgage interest deduction).
But with inflation taking off is this wise?
Rent skyrockets
House note stays the same
We are currently living in what I call our "investment condo" in a very nice community with many ammenties .I call it that because every ten years of its 45-year history) these condo's 'have increased in value by $100,000 very 10 years. Our plan is to live here until our savings runs out and then sell it and live off that money tor the rest of our life. We are no longer get up and go people as our health declines so that is not of any great value to us. Our next move will be to a senior apartment complex. without maintenance or property taxes. It costs a lot more to rent than to own in our area at this time so renting does not make sense at this time.
And the traffic in Atlanta is horrible
You brought up some interesting points. Thank you
My pleasure!
Interesting set of tradeoffs. My wife and I built our house 40-ish years ago on large parcel of land. Ideally we would like it to go to one of our kids to keep it in the family. We had a mortgage burning party years ago so our main home ownership expense is property tax about $550 a month. Both my wife and I have hobbies that take up a fair amount of space so moving into an apartment would be a huge lifestyle change. Having built the house we also do most of the ongoing repairs and construction ourselves but if that becomes too onerous we can pay to have the pros do the work, which is no different than if we lived in an apartment.
At some point the house will probably be too much for us as we get more decrepit but hopefully that is a decade or so down the road.
Thanks and good points Tom.
I think about this frequently. We’ve been in our house for 15 years. Mortgage is nearly paid off, but I’m not in a hurry with the low interest rate. We live in a beach community on the east coast of Florida.
Our mortgage is $480, our taxes and insurance come to $700 a month. So less than $1200. And we have fantastic neighbors. 15 minutes to beach.
Houses rent for $2200 (in a not great area of town) and up from there. One bedroom apartments in new builds START at $1600. Seriously, I don’t know how young people pay those rents.
I sometimes feel tired of the yard and pool maintenance, and we just had to put on a new roof. But, where would we go?
Funny you mentioned Georgia and Mexico. We’re casually liking at Georgia and we used to own a vacation home in Chapala, Mexico.
Pros and cons.
No easy answers.
I’ll probably stay with what I know.
A good video. He doesn't tell you this is WHAT you must do but provides reasons why it might work for you.
Great videos! Please consider adding a visual list. Will help reinforce your important points. Thanks!!
Thanks for the comment.
Great video....I've got a spreadsheet going with lots of your points....I'm 59 and needs this info. Jesus bless you!
You never own a home. You rent it from the government. You insure it, you warranty it, you fix and paint it, you mow the grass, spray for bugs, spray for weeds but they grow anyway. You pretend to be happy, you pay plumbers, roofers, receive scam phone calls every day, you slowly die from age and angst that you're wasting your life stuck in one place devoted to an all-consuming building. You've nearly forgotten the freedom of your youth, now you're bogged down making that monthly payment, likely in a bland car-dependent soul-sucking suburb a few miles from Walmart, always worrying about money, the Joneses, how your kids never call, the growing incivility in society and worsening cancerous American culture. Where is the darkness taking you and when does it end? Sooner than you think with a lot of pain. Renting is fun!
I certainly hope Georgia is close to Atlanta. 😁
Yesss. You caught it!
@@HolySchmidt Keep up the great content! Just razzing you.
Mr. Smitch Sir....... You are so thoughtful in All Aspects before Retirement and during RETIREMENT with your insightful info...... Great Jobs, Sir 👍👍👌👌
Thank you for the kind words!
Renting? Unpredictable landlord or apartment manager, no thanks. Cost for rental in East TN in 2021 is more expensive than my mortgage. As a single woman I purchased a one level home in an established neighborhood two years ago at age 69. Having good neighbors is worth any issues I may encounter.
I agree!!
Sounds like you've had trouble with a landlord before. I used to rent from the worst landlord on the East Coast, which was a real motivator to scrape together enough for a down payment of a fixer upper almost 35 years ago! Coming home to no water or hot water on a regular basis can really motivate you even though it seems like the maintenance is never ending and getting harder to keep up with (and I'm younger than you).
@@MILGEO Yes, George it is getting a bit harder to keep up with. I am lucky to have a mowing crew. Also, I have simplified the landscaping. All considered I do love having MY space. Hope you are doing well with yours!
@@j.m.7056 I do love having distance from neighbors and aside from the taxes, I generally like the area which I still do some work in. It's wooded with lots of outdoor area's close by though there are box stores, malls & restaurants close by.With a daughter just over the CT state line I just put up with the unfair taxes. Tenn. sounds like a nice place to retire from what I hear, are you from there or did you move there to retire?
Yes, but... there is nothing preventing your good neighbors from moving away while the new neighbors from hell move in. Also, when you rent, your only stuck with bad neighbors for the duration of your lease then you can move away from them.
Transaction costs for selling a house are more like 8% than 4%, the realtor(s) take 6% alone.
Rent should be a temporary thing until you are ready to settle down,then rent becomes onerous. "Paying the landlord's mortgage"
but moving is expensive and trouble,so owning for short periods might be more expensive than renting and moving frequently.
Believe that landlords have to pay property tax,and guess what,they are going to pass that on to you,their renter.
I’m flipping with my daughter. She wants to raise her family in the house she grew up in. Im tired of lawn care and maintaining a house. Im going to sell my house to my daughter, invest that money in a mutual fund and go try apartment life for a few years.
Good luck on the flip! Try to find an apartment with sound insulation in walls, floors and ceiling. Most new builds are noisy.
My youngest daughter, Jade, & I have discussed doing this, as well; especially, since my grandchildren live a twenty-one hour drive away.
@@j.m.7056 I've been in the same apartment for 22 years now and haven't had that problem luckily. But I have lived in houses that the neighbors were or more accurately than neighbors kids were annoying to say the least
Great video!!! I'm an Australian, and this is true for us as well. One further consideration, housing needs change, sometimes rapidly and usually when we are not expecting this. A disabling event like a stroke or life changing event, like a partners death, or worse, divorce can mean you are forced to "sell" in an unpredictable market and without control of the circumstances... Intense stress, anger and sadness color our perception and decision making... My partner and I are planning our home sale for favorable conditions post covid and when we are ready, and placing the assets in trust... Keep up the great work!!
Thanks Ric! I appreciate the kind words.
What’s the point in equity if you never tap it?
I bought my little house in 1981. This was intended to be my forever home. Everything is on one floor. So long as I can make it up the two steps, I'm in. If I were to move, it would be a rental.
I would like to sell everything, including my house, and either retire early or work remotely but do so from different states and different countries moving every few months between furnished apartments. Do that for several years then come back and maybe buy a small house or condo with FAR less maintenance, both in time and money than my current home.
The property taxes are most likely baked into the rent anyway so I don't think that's an advantage. I do like the idea of not not having to fix things, but I've heard landlords aren't to keen on the idea of fixing things either.
I suppose that depends on the landlord, but you do have a right to a "complete" home unless they want to give you a discount...
Moving is one of the most stressful things a person can do (especially over 70) unless all you own is what fits into your car.
It would be great to work with a builder or architect to have a house built but would cost a whole lot more money than just buying a house,such a house for an older person would have a groundlevel walk in main floor with such as kitchen,bedroom,washing machine room and bathroom all available without having to climb stairs,such a house would ideally be handicapped friendly as to wheelchairs and walkers_especially as to toilet and shower,bath.
some such houses have elevators
I notice that most of the giant monster houses being built around here have lots of stairs,even just to climb up to the main floor entryway, mostly are sold to young professionals but I don't think these houses would be friendly to older people once it begins to become harder to get around
some of the new houses are constructed better than others,they do have some great views out of their upper story windows.
Such things are for people with much more money than I have,I just would like to get out into the country where I can walk,garden,and hear spring peepers and katydids instead of the constant infernal traffic noise in Arlington that even drowns out most of the jet planes that follow their highway in the sky.
You mentioned in the video “Here in New York” I live on Long Island. Do you? I am asking this question because many times different geographic portions of our country have very different finances and calculations to their assumptions. You can be a vague if you want.
I am retiring this year. My wife and I have $59,000 in pensions plus $1.6 million saved. We own a 44 acre farm and LOVE living here. Why would I rent when I get so much enjoyment where I live?
I always click on your videos and enjoy them and agree most of the time but on this video I totally disagree with selling then renting, i.e. repairs to a property, if you are paying rent ,you are paying for the repair and then some to the landlord. For me its great waking up and knowing i'm not paying or owing anything other than the usual ware and tear, Here in Fl I have homestead exemption, the taxes stay almost the same year to year and property prices are skyrocketing, and so are the rental prices. I don't have to deal with snow and the sun shines most of the time.
You buy for investment. You want to have an inheritance to your children. Also, you want to make you’re not going to be kicked out by the landlord if they decide to sell the house. You can do whatever you want to your house and no one is going to say no to you.
Yes you can do whatever you want to your house but don't forget you also have to pay for it. Owning verse renting debates often don't mention this. If your goal is to make your house your dream house then yes owning is great. If your house is just a place where you live and your life revolves around other things then renting can make sense. I've been in the same apartment now for 22 years and my 401k reflects my choices. Of course my kids are grown and I don't need a house and all that square footage
I work in an independent retirement community. They have an apartment around 500 to 900 sq. Feet. A dining room and activities. I love the community. Great people. Their paying $2500.00 to $3000.00 a month. I own my home and outside is taken care of by the association. My living expenses are around $1200.00 a month. How in the world would you want to spend that much money in an independent living place? Their rent has gone up again and some are scrambling to find some where cheaper. Eighty and ninety year olds moving again. Pleas explain 😂😂
Sounds like you have a wonderful arrangement.
Check out the companion video for your answer:
5 Reason to Own in Retirement
th-cam.com/video/hq-REQGnwlA/w-d-xo.html
My rent went up 15% this year so I'm shopping around for something to buy. I'm thinking something bucolic. Maybe 5 acres with a small house on it.
Update: I can't get a mortgage because I have no credit. I haven't had any debt for 15 years. Apparently, that is a bad thing.
And where can one find Conservative Income Producing Assets in this environment? Seriously. I enjoy your videos, but I would like to hear your thoughts on this. I mean, how can I keep up with inflation right now with a conservative investment. Thanks for your videos. Cheers from Alaska.
Watch Dave Ramsay's TH-cam videos on mutual funds.
Thank you!
Fortunately none of these five reasons apply to my wife and me. We will continue to own the house until I'm carried out in a pine box.
We will sell our house and invest the money. We gave no intention of EVER owning a house again. We will be living overseas in rental houses and traveling. Definitely not going to want deal with tying up funds in a house that may not get rented or will eventually need maintenance. If we have to come back to the US in very old age we might buy a small cottage or just rent. There’s always places to live somewhere. Increasing rent? Big deal. Move. That’s why it’s important to be financially independent in retirement and not living off the government. If you’re on a fixed income then yeah, stay in your paid off house and don’t venture out into the world.
Renters are able to live about the world. No home to maintain back in the US. You can travel from country to country and gain experiences.
If you sold your house, wouldn’t you have to reinvest the capital gains or pay taxes? What about renting your house out and renting someplace else? My mortgage (including taxes and insurance) is cheaper than a 1 bedroom apartment rental in CA.
Renting should be a good idea for a lot of retirees, but I have a elderly friends who lives in Florida on a very limited income of about $1,200 a month, and 5 years ago before covid she was paying $500 in rent and her income was about $1,000 or $1100. Now her rent is $1,000 which is the cheapest she can find in Florida. Her cash flow has gone from $500 to $200 and that is unsustainable. She is now planning on moving to Tennessee to live with her son but that situation it's going to be very difficult and I don't think it's going to last. But she feels like she is boxed into a corner. It's horrible! And besides all that, every waiting list for Section 8 or senior housing in Florida is closed. Does not even a way to get on a list.
I would rather own a one-floor home or apartment.
I give 4 reasons why you should own your home property taxes is a lot cheaper then paying rent , your not at the mercy of a landlord, If you get into financial trouble you could sell your house and then rent a place and have cash left over, you can fix up your house to suit you don't need permission
I'm surprised you did not say smaller home. When the kids are gone you don't need some massive house, a two bedroom apartment is far easier to clean. Also if you are always traveling why keep a house.
If you don't want to do home maintenance yourself, accept that you will need to pay people to do it on your own home.
If you rent, you must also accept that you will pay your landlord to do it, and they will in turn take a cut, and pay somebody to do it.
Many of us will ideally retire with paid for homes that will accelerate in value such that we couldn't afford to rent them five to 10 years after retiring, let alone buy. (bleeding heart "fixed income" argument). I imagine it sucks to be in your 80's and get that letter from your landlord telling you to get out in 30 days as they are not renewing your lease.
While I've been watching your videos for several weeks and have found them good, this one causes a particule problem. Yes renting is always good when you might want to move (I think when your younger and don't know what you want) and only see yourselves in that property for two of three years. However, when you have a good idea of what you want, you should buy. Yes you might change your mind but you can always sell latter at a profit. In fact that anyone in the 45-year plus range should buy a property. With that said, at 65 it could make sense to sell it and rent. It won't be me though.
Thanks for the comment Rick, as I mentioned at the start of the video owning is the standard (and in many cases best) option for a retiree. However, everyone is different and this video explores some of the reasons when renting might make sense.
Sorry to burst your bubble Rick but that's just not true. The real estate market is never stable and you cannot always sell for a profit in true inflation-adjusted dollars. Home prices usually adjust well with inflation but... that's not always true as prices can fluctuate wildly based on circumstance beyond your control. Demand, interest rates, job market, crime, natural disasters, civil unrest, zoning and ordinance changes, and just the way neighborhoods change over time in general can make home ownership a risky proposition from a financial standpoint. It's a myth that buying a home is always a good investment when you do a real objective comparison of costs. The total costs of home ownership (principal and interest, taxes and insurance, maintenance and upkeep, etc.) usually exceed the cost of renting. This is especially true if you paid yourself an hourly rate for all the time spent mowing, blowing snow, fixing things, etc. (such as you could earn if you just did a part time job instead). Do this simple calculation. $3000 in closing costs on a home + $250 a month for the increased costs of owning vs. renting. Save that money for 30 years at 6% interest = $254,403.03. Considering that, do you really gain anything by owning? Maybe... but maybe not. My real point is this. Home ownership vs. renting is really less about financial gain than it is lifestyle/quality of life choice.
You did state that it could be good to own and I did say at the end of my reply that it could make sense to rent.
Yesterday Jason James made a comment to my post that made me take action by answering his comment and now I realize I should've answered your message a couple of months ago.
I have a pretty good position that pays well. I've have many positions over the years where I work with highly educated people. But 27-years ago I moved into a position where I work in the manufacturing of products. Once in that position I have taken it on myself to try an educate the people in those positions about what would be good to do for their future.
Many of those people don't have good role models to make them understand what would be good for them so I try to fill in. I have tried to make an argument for things like owning a home and such. Many of their arguments are about not wanting to be responsible for maintenance etc. My argument to them is well what are you going to do when you retire and start living on a fixed income and your rent keeps going up?
So I understand your take on this was for people like you and me that have generated a substantial amount of capital in their life and don't have to worry a whole lot about retirement.
Here is the problem, you are posting to an opened site and everyone can see it. You didn't qualify your statement enough. All of those people who I'm talking about will be able to see it. So you need to be proactive and make the announcement.
Here's the deal! All of us that have a good education, either through parents, Universities, or other basis's understand this video. All of the others will maybe understand or maybe not.
@@HolySchmidt
Homes have been increasing in value by leaps and bounds. Rent is not that cheap and most landlords aren't that great at fixing problems. Some apartments don't have garages. You have to put up with noisy neighbors. Moving around often is a lot of work. Putting everything you have in some investment seems risky to me. NY is super expensive to live. I like CO and don't plan on moving somewhere else. We sold our two story and built a ranch style house with no mowing or shoveling for a minimal monthly fee. Many of our neighbors are also retired. I just wish everyone would just get the damn vaccine so the rest of us could get back to normal.
So, you only want your taxes to go towards education IF you have kids in the system? That might explain why the US has so many problems. I want an educated populace whether I have kids or not.
So many selfish thinking people..after their kids have benefitted from good schools they vote against keeping schools strong...children are OUR future
I think you might have this one backwards… There are a lot of wonderful homes that are designed for large families. Those homes appropriately have significant school tax bills. Those homes will attract families whose children will use the school system.
But… schools also receive funding from other sources and those sources (State taxes and sometimes Federal) often provide funding based the number of children, their average test scores (aka Regents) etc. the fewer the kids in school the less funding the school receives..
@@HolySchmidt Respectfully, I think most financial advisors, who focus on individual rather than communal wealth, have just about everything backwards.
Have you seen the rent increase today?
Secret is having lots of friends in different places. Visit each one through the year. Lol. Or family is even better. No need for a house or apartment.👍
"Transfer money to 'income producing' assets" he says. Like what? Housing is the best potential for the middle class. Stocks are like gambling, bonds have a miserable return. Not many options left!
I’d dig a little deeper on that one - perhaps speak to a financial advisor.
Many retirees own convertible bonds from well rated utilities and nice dividend stocks from stable companies that are in boring businesses like food.
We have animals a lot! No way could we rent also I don't want a landlord telling us what we can and cannot do I like having my own house I can decorate the way I want I could go on and on I would say it depends on the your situation.
Are you using that "8" ball, in the background, to predict your ideas? :-)
Lol. Glad you noticed the prop. It’s going to change from time to time as part of the moving background.
Some bad points! You worry about replacing your roof and taxes? The rent you pay has to cover home expenses or your landlord goes broke. If you don’t like stairs buy a one story home. Rent will always cost you more than owning. No tax write offs, you pay a realty company to manage your rental when you rent. Last, there is no guarantee that the money taken from the sale of your home will make you income…
I just had this conversation the other night with a friend. They thought everyone at my age should own their home and that renting was a lower class/status statement about me. I currently have my place up for sale because it is just too much for me to continue to keep up (old country house on 30 acres.) I am 62, single, no children or spouse therefore no one to leave it to. I want to relocate out of state and enjoy my retirement years and that may include a couple of different places. I don't want any ties to a property.
It’s not a good idea to make financial decisions based on status. There are so many stories about this I won’t even use a cliche’ to emphasize. The decision needs to be an informed one based on your personal situation. Spend time and understand your facts not someone else’s.
@@HolySchmidt Oh I don't care about someone else's "facts" based on a personal judgement about renters! That is what the entire conversation was about - someone else's idea of how I should be living my life vs how I will live MY life. I could not care less about what other people think, or how they would judge me for being a renter - hah!! I'll let them have the burden of "keeping up with the Jones."
Congratulations! That’s sounds amazing!!
Renting is burning your own money... I have a "double decker" (duplex) condominium, without the mortgage to start with (in NYC), and if worse comes to worst, I can rent it out and live on the profit wherever I want...
Another consideration, if me, or my wife (or both) with the age became "less fluent" (or in reality need permanent support), I can make an arrangement for somebody capable to take care of us for allowing to live in the full equipped basement... Tell me if I am wrong... :)
Plenty of college kids living in Mom's basement.
I GAVE MY NEICE basically her down payment, this is some of her inheritance $ now when she really needs it not 20 yrs. later when she's planning retirement. I get to use her address for medicare and go/do what i want. The home is segregated. I got my area to myself and take care of property when i'm around for exercise purposes.
But most importantly my ira withdrawals are taxed at my ~12% now (she pays the tax) instead of her paying ~32%. She will be forced to pay tax of my HARD EARNED $ within 10yr time when she is making 150+ a year, especially if i die sooner then later. Makes no sense! the last thing I want is the government getting my $.
All i need is a ride to the airport
Renting is a bad choice for retirees and most people. Who wants to deal with a cheap landlord? Good luck getting the landlord to respond to any requests without having to threaten court action. Renting is like living in a hotel, but without all the amenities. It’s hard to personalize the living area since it’s not your house.
Thanks Joe
Oooo hotel living. That sounds fun 🤩
SO: "Should I rent instead of buying?": "Decidedly so." "As I see it, yes." "Without a doubt."......(look over his right shoulder!)
You are wrong on this one Schmidt. My sister did the best of two worlds. She moved into a single floor condo. All repairs and outside work is the association's responsibility. I have heard some real horror stories from retired renters. You may want to downsize your housing, but rent? The only worse move is people that sell out and live on the road in an RV so they can beat taxes. If you can't get around anymore, then sell out and put your name in for one of those efficiency apartments for old folks. If you can't get around anymore, how in the hell are you going to be a globe trotter?
As I mentioned there are lot of reasons to own, but I will note that your comment makes an assumption that most retirees would find incorrect and that is that retirees can’t get around - in fact most can and do quite easily. The rest is personal preference. Condos have association costs that can be massive if a major repair is needed and of course no one ever said to move into an RV…
@@HolySchmidt No, not an RV, but "Not getting around" was your argument. You sound like a lifelong renter with no homeowner experience.
This is not good advice if you already own your home with no mortgage payments why would you want to throw your money away on rent?
Renting increases someone ELSE's wealth. Period.
Moving is not easy what about friends we made somany years -
As a former NYC'er.....NEVER recommend....
You think renters do not pay for property tax and repairs? That'd be a sweet deal and a pretty stupid landlord!
In reality, a homeowner gets a break on property tax in many places. A landlord has to pay the entire amount.
Maybe the landlord doesn't collect enough for repairs, don't we call those "slum lords" ? Or maybe the building falls down?
Sure, if you want to be a nomad it makes little sense to own real property. But if you want a familiar home base, or you still have hobbies that require tools and equipment then maybe you want a place of your own with a shed (or a shop) out back. And maybe you could consider selling later, or maybe a reverse mortgage.
Absolutely no way this makes any sense. Renting is far more expensive than owning. I could never live in a place that is not mine and where I would be limited in what I can do. What if I enjoy gardening? What if I like listening to music late at night? Would my neighbors get upset with that? What if the upstairs neighbor had a habit of running a vacuum early in the morning? I could go on. You really missed the target with this video.
Thanks Joe, you may want to watch this video then. 5 Reasons to Own (vs Rent) Your Home in Retirement th-cam.com/video/hq-REQGnwlA/w-d-xo.html
Make special note of the beginning one minute…
"5 Reasons Why You MIGHT WANT TO RENT Your Home in Retirement" There, I fixed the title for you.