Im debt free, Own my mortgage free home. I like to venture out into the world for work and play knowing I always have my home to come back too...it's my anchor. Its home base, where I launch my life adventures...
I concur, Michael. Home, a place where you and loves one's can always come back. My grand children love visiting, run in my backyard, eat, laugh, play games. and sleep. Stability/continuity invaluable.
for those who are going to complain....just stop. These videos are great and helpful. Every situation is different and this gives perspective from other views that allow us to make educated decisions in our own lives. Many of the situations he speaks about do not apply to me, but I can pick through the videos and get some insight and decide for myself what applies to me...and being 15 years from retirement, allow me to see situations I didn't think about and maybe work to get into a different place in retirement. We should all be looking to learn new stuff each day.
I am nearly 70 but haven't yet retired. In 2013 I bought the home of my dream with a 15-yr fixed mortgage. I put every spare dollar into paying of that mortgage and managed to pay it off in 6 years. Today I put that mortgage payment into my savings account. And I do most of my home repairs, both because it's cheaper and because I enjoy it. Since buying my house it has nearly doubled in value and next year or the year after it's projected to double again. I see no reason to sell and rent, I am in my castle.
Love you thinking. I think the "own vs. rent" is a very personal choice. I'm 63. We just sold our home of 24 years. Way too big for us, way too much stuff. But it was a lovely gathering place with lots of memories, emotional to sell. We are now renting a 2-bed apartment 1,100 square feet vs. the 3,600 square feet before plus garage & shed. Downsizing was INCREDIBLY rewarding and liberating. We might buy a smaller home at some point in a state or country with lower taxes. We might not. For now, the smaller living space with no maintenance and no ownership cost surprises makes me love the decision to sell & rent. It is just working for us right now.
Owning my home outright allowed me to retire this month at 59 and pay for my healthcare. If I had a house payment too, I couldn’t do it. Thanks for the great video.
...and if you ever need more cash and move to an apartment, downsize or assisted living, you have it in equity and can always sell the house and recover...$200k, $300k, $500k or more! Plus with rentals come a lot of restrictions and significantly higher taxes as not homestead..... I avoid rental property like the plague!
Some more thoughts of home ownership. At some point you have to save for repairs to the roof, hvac, windows, driveway, etc. so make sure you have savings stored up for those expenses. Also keep shopping around for home and car insurance and fixed gas or electric rates when they are lower i.e. reduce expenses where you can. Also be prepared to spend on a landscaper, snow service, gutter leaf remover and potentially a caretaker. Depending on where you live the community might offer many services for older folks who want to stay in their home for as long as possible.
There is a big difference in owning and making payments on (what most people consider owning!) I believe you should have a PAID OFF HOUSE in Retirement!
Love the video's, This one especially, I am still working at 66 and hope to retire soon, I have worked as a 1st responder for a non-profit for about the past 40 years. I was injuied last year and am no longer able to work on the streets but I have a skill set that has made it possible for me to stay working. I do want to retire soon. We have raised 6 children and still live in the house we bought almost 40 years ago. We have made many upgrades and plan to stay here during retirement, our vehicles are all paid for and taxes in this small town are very reasonable. Other than the snow in winter it is a great little place. I agreed with every point made and I thank you for all the advice.
I think of it this way: I have a paid for house with taxes and insurance that do creep up as well as maintenance and replacements. Soon I am going to have to be spending a lot of money paying others to do the upkeep I have always done which is a hassle to find the right people if any at all, a real headache. Renting would take away nearly all of that. If the money I get for the sale of my house will, when invested, generate enough money to cover the cost of renting a smaller place (easier to keep up) then renting makes sense for me. Yes, rent isn't stable, but neither are taxes, insurance, hired help, maintenance, etc. on a house. It's hard to know which way to go.
@@Elizabeth-yg2mg Yes, that's been my motto since my last apartment in 1979. I swore I would never live in a rental apartment ever again. But I am 72 years old now and alone with failing health and not a lot of money, just enough if I live frugally. I can't afford assisted living and really don't need that now. So, yes, finding the right place for me is going to be really difficult. I also thought being the controller would be great when I had my own well instead of municipal water with monthly bills. It's been an expensive hassle for years trying to get the water right with at least 30 water tests and counting. I'd rather be at the mercy of municipal water with a monthly water bill. At least I found a fairly good plumber out here in this rural area. After 13 years I still haven't found any other trade that's satisfactory.
This is something I'm considering now. It's getting harder and harder to find dependable people to do the maintenance on my home. I do it because I'm not going to let my biggest investment decline in any way. For the time being, I've decided to stay put but the rental option is out there on my radar. Another reason I'm considering downsizing to a rental is to make it easier for my family should I ever have to go into a care facility. They wouldn't have to sell the house but could simply give notice and move out my stuff. Things to think about, especially as I get closer to 80.
@@Elizabeth-yg2mg That's what I thought last week, at least until my 80s. Today I'm in atrial fibrillation and my cardiologist can't see me until after September, they say, and it's going on three days. Says to go to emergency room which I'm not going to do. I'll see if my primary care person can do an ECG in her office and let her decide what to do next. Medication has been controlling for a year and a half and suddenly it is not, so all I can do is sit or lie down, no capacity to do anything physical. You just never know at this age. Thanks for the positive thoughts, though.
Having no debt and a paid for home is a huge part of my retirement plan. I can't even conceive of renting, whether I'm retired or not. But renting as a retiree and being at the mercy of rent increases seems insane to me, especially with how the rental market is in my area right now. Also, I want my step-daughter to always have a place to go and room of her own whenever she needs it even when she's an adult. I'm working hard to pay off my mortgage asap.
I really liked this video. Your number 1 reason, "Safety for Loved Ones" is my primary reason for owning our home. My children know that if there is ever a crisis in their lives, there is space for them (and their family) at home. This is also why we probably won't downsize. Our home is a manageable size, but big enough for an emergency situation.
Another issue with renting is if you have pets - it is harder to find a rental if you have several pets, and you have to pay an additional amount per pet. If you are an animal lover, a rental is, then, not always an option.
@@justincase2830 this will only matter if you live on in a typical suburban tract house. And, even then, don't assume that people around you won't like animals. As we have indoor cats, it is not an issue whether or not our neighbors like animals or not. Pet rent IS an issue.
@@randomvideos3674 Sorry that you feel that way. I can understand how you would feel that you don't want pets in your rentals as some people don't take good care of their pets and let them cause damage, but most people are not that way. But to hate pets in general, I don't know. Just have to think that you don't realize that for many people, their pets are their kids and keep them going.
You might have missed one: pets. Often keeping pets in a rental is difficult (expensive) to impossible (prohibited.) I have been owned by cats most of my life and I want to keep my little furry friends around. When my mother decided to join a retirement community in her 80's (she lived into her 90's) I adopted her cats, since she couldn't have them there. She appreciated daily reports on their lives and one of them outlived her (he lived to be 21.)
I like your choice of words, "I have been owned by cats" as I find it hard to think of 'owning' any other living creature especially ones I love. Having said that, it's wonderful you were able to be there for *them* & your mother in that way. You gave them both peace of mind. =^.^= =^.^=
Great comment! My owners (three cats) are truly my family now, and they are THE BEST. I will happily pay others to do stuff to remain in their house with them. 😻
From my experience, most places don't take pets, even cats, who generally don't cause much damage. If they do take pets they want extra rent plus deposit. Many people fib and say they don't have cats but then you have to worry about getting caught and having to move or get rid of the little darlings.
I prefer to own but it's not for everyone. For example, I know a widow who owns a home and has only modest savings. The home is her largest asset. It has become a weight on her. By liquidating the home she'd clear close to $400k which will pay for an easily managed apartment for the rest of her life, and free up some funds for other needs.
Could she buy a guaranteed fixed inflation proof annuity that would pay enough for the rest of her life with that $400K to provide for renting that apartment with some spending money left over? (Maybe a question for Mr. Schmidt)
@@davidpowell3347 The cost of maintaining that home will my into the equity especially if it's an older home. Also, consider the property tax cost versus a smaller home like a condo.
We are about 3/4 way towards paying off the mortgage and are in our late 50's. Our plan is to keep the house another few years, already downsized and then sell it. Our three kids live around the country and we are going to move about every year give or take a few months- kinda like travelling artists/academians (we are neither but philosophically we are! ha) . That way we can really spend time with them- not just in and out over a holiday. Also, you can't do long visits and leave your home vacant for weeks/months. We want our space and they need theirs so moving in with them is not what we want, and with their own work/kid/marriage normal stress (and intimacy!! ha), they need their space, too. They are all at point where their vacations are for their own travel/sanity or must be used on our grandkids. We plan on volunteering in each new area, do festivals, site-see, help the kids by driving the grandkids to school. The days of crates of figurines and handed-down crap ahh.... antique stores are full of stuff no one wants. Our kids have to stay lean 'stuff' wise as they may have to relocate one day. We can pay a mover very cheaply to move our minor favorite things like K-cup machine- TV, bikes, etc. The clothes can all fit in our Pacifica. Then we move to the next kiddo- and your lowest rent is when you first move in, and as a retired couple, we aren't worrisome to a land lord like crazy partiers. This always places us near one of our kids, but then we rotate fairly. All the most important things (our family photos) are all digitized, on the web and backed-up on archival DVDs. Healthcare we just do concierge care and keep a major medical plan. If we die, we die. We have DNRs on file for the states we travel to. Also, like one commenter said, it relieves the kids, dealing with work and kids of their own from having to deal with long-distance parents passing or refusing to leave their homes yet couldn't understand why everyone couldn't come to their rescue from across the country- it's a different age and our own parents and grandparents had a tough time because they were so stuck on their homes. They always said they didn't want to leave friends, but they would lean on their friends who were also ill, in their 80's, had their own families- you can't make staying in your house your only plan- the Norman Rockwell vision of life may not fit like it used to unless a family is fortunate enough that everyone can find jobs and things in the same close proximity.
I sold my large home and downsized into a brand new smaller house with a large yard. We own our home without debt in retirement, and a newer home needs fewer repairs. Since we have pets, renting is never an option.
I never considered your #1 point of providing a place of safety for family that might loose their job. Thanks for bringing it up. As my parents aged, the “Grand Central” point migrated to their children’s homes because Mom simply couldn’t host a party of two-much less 20. I’m enjoying your videos.
The dog and I moved the day after I retired. It was to my rural secondary property, which was also paid for(my son and his wife sold their house and bought my old one). I've always done most of the repairs needed on any house I've owned and made sure everything was replaced, or updated, before I retired. However, I'm aware that down the line, I may have to pay someone to make repairs that I can no longer do(yard work wouldn't be a problem, have a riding lawnmower and if I can't do it, my son would). That's why I continue to save. Living in the home I own gives me peace of mind that I certainly wouldn't have renting. My property is in a Lady Bird deed(a trust that's legal in my state)and the minute I die, my son becomes the owner, no probate. Loving my stress free retirement!
I own my home in town free and clear. I also have a small farm in the country side that’s paid for as well. Actually, no debts at all. It sure gives you peace of mind in retirement.
@@memelc5655 that’s called living. If I was renting, I would be paying someone else’s mortgage and property taxes and insurance and maintenance. The only way around it is to be homeless and live in the woods.
I have an aging mother who will soon need to be moved to assisted living. She has a home, that once we sell it, it will give us the money (along with her pension and SS) to pay for this for many years. Owning a home is like a long term care policy.
My mom's $100K nest egg was gone in her first year in a nursing home. She went into a Medicaid bed and lived there another 3 years. It worked out just fine.
Ha! You think that her house will fund assisted living for many years? You are dreaming. My mom was looking into it before she died and believe me, you're dreaming.
I always advise to buy a home by age 35. Make sure it’s a forever home. It’ll be paid off by the time you retire at age 65. It is so nice to retire mortgage free.
No such thing as a "Forever home" this side of eternity. We just moved from NJ from a house we enjoyed for 30 years. We expect to stay in our new luxury condo for perhaps 10 years and then move in with my son, whose kids will be out of the house by then. Or maybe we will stay, this place is paid for and cheap. My parents were in Myrtle Beach for over twenty years and then moved to Florida in their late 80's. I would expand you advice- retire debt free. Selling that 5 bedroom shack that we raised our kids in was a big part of our move into retirement. I wanted to work another 5 years but God has a better idea.
Several people have commented about expensive future maintenance/repairs. Here is my plan: make sure to do the major things like a roof replacement before retirement. My house is a small country cottage, 864 sq. ft. with a 26’x24’ garage/shop. I will have a modest retirement income and to me it just makes the most sense to enjoy my senior years in a paid for easy to care for house that should go the rest of my life without needing any expensive work. Your results may vary
I’m very pleased to know by the time I retire my home will be paid for. That gives me some piece of mind. Its a 1600 sq ft with a small manageable lot. Gives me just enough space for puttering around. I know not all people have the option to own. And for some it doesn’t make sense. I’m sorry you got blasted with some nasty comments. Keep up the good work with your information.
I live in an over 55 retirement apartment/hoa Love my neighbors. It will be hard to leave.there is a lot of security in this situation. I am still working. Living here has introduced me to what life after employment could be like. And it looks pretty good.
Owning, A person can garden, plant fruit trees and bushes. A gun safe and or guns are sometimes restricted from a rental property. If you prepare your home for long term low maintenance, it gets easier to keep it up during retirement. New roof, siding, look at appliances and such before retirement. You can easily beef up security of your home, but a rental place you pretty much have to live with the security that it comes with. Owning a home means you can personalize the place much more than a rental. Owning a home means you get to have people stop by and visit for the weekend without complaints from neighbors about parking spaces, noise or the landlord threatening to evict, raise rent, etc. Stability of location means a lot for medical reasons, don't have to change doctors, dentists, physical therapists. Stability of location is also good for your bills, they won't get lost in the move. Just looking for a place to live is stressful, moving is even more stress. You can take your time giving away your stuff, if you move to a smaller place so much has to be given away, sold, dumped that just adds to the work and stress. Storing for shortages such as last year's and this year's is easier if you own the place. Landlords sometimes sell property. New landlords can raise rent, raze the building, neglect the property, change the rules. After all, their mortgage is probably much more expensive than the previous owner. Equity is good in an emergency. A couple days and I can turn some of it into cash. A few weeks and my heirs could turn all of it into cash. Added feature to this note, look at the size of houses the "greatest generation" was raised in, and the size of those families. Now, admit that most modern houses are just huge for almost no reason except to pile on profit to the builder. Next, when the young ones in the family are looking for a home coach them as much as possible to buy a simple home that is easy to pay off, save money and enter retirement with more cash than can be spent by reasonable people. It is working well for me. When my co-workers saw the house I bought for the money we made, they were stunned that it was so small. But it paid of quick, and allowed me to save a lot of money.
Your videos are wonderfully helpful and also highly appreciated. We own outright and to be honest, can't imagine having to pay rent and therein, make some investor wealthy. We just find it easier to have a bit more breathing room as we're retired, without a mortgage looming over our heads.
When I became a widow at 60 my middle daughter and fam moved in with me. They had been renting. This has allowed me to become a snowbird in retirement at 62 with them being responsible for all upkeep on my paid off home. I spend the winters with my oldest daughter and her family in the south. It has allowed me the time to adjust to this new phase of my life with less headaches knowing someone is taking care of the family home and it's not me. They will eventually own the home when I am ready to sign it over to them. The property is in the country on land that has been in my family for over 50 yrs.
Good vid. I bought my apartment about 10 years ago. The price has increased by about 25% since I bought it. My mortgage isn’t that much and I have no problems paying it. I know a couple of people who didn’t buy and continued to rent and are now unable to buy because of the price. The rent will no doubt be higher when they retire where as my mortgage will stay the same or be paid off. I see them heading for a very tough retirement.
I liked this as well as the rental video. I owned my own home, and made the decision to move cross country to live near to my daughter, and for some new-place adventures. I am now renting a great apartment. Selling freed up the equity in my home for my use generally, and pays easily for the expense of my rent. My personal expenses were getting higher for some medical issues, and my travel money was depleted, so instead of sitting on my $400,000 equity, I am now, at 70, able to live my life a bit freer.
We still live in the same small house purchased 35 yrs ago. Long paid off. We could never afford the rent on this house. Low maintenance patio home still in great neighborhood. Best decision we made. Like your vdos!!
Pretty much none of the points listed in the “5 reasons” apply to me. I am single and have no children. My house will be paid for in 6 years and I consider that a huge financial win. The taxes go up every year, but that is much cheaper than paying rent. I do all of the upkeep myself but those expenses could climb later if I no longer can do the work. I plan on staying in my home as long as I can, but it can serve as a “savings account” if I have to sell later.
Perhaps if you love where you live you could consider taking in a boarder. My brother lived in our basement for years as he was down on his luck and he did help with maintenance and took us out to eat now and then. As we are retired now we sold the big house and moved to a condo. HOA fees are less than my old property tax bill. I wish you well, Cindy!
I'm in the same situation except I paid off my house years ago. My property taxes haven't gone up in over 5 years. You'll have to drag my dead body out of my house before I move. I made my home an environment where I want to be. The house inside and out, the landscape, the birds and rabbits that visit make my place special to me. I also cultivated friendships with my neighbors, and we look out for each other.
tell the people who say bad things to not watch its about things that may or may not help as everyone has a situation can change.....Great Job your doing for us!
Thanks for posting. When I was in my early twenties, my wife and I rented an upscale apartment in So Cal for $175 per month. Today in So Cal it would be rare for a person to find a studio for under $1,700 per month. I went on to buy a home in the early 70s and my mortgage payment was around $230 per month. Fast forward to 2021 and living in N GA, my property taxes when broken down to a monthly payment is more than the mortgage payment on my first home. Although it can be argued that rent is money down the toilet. I have a friend in his mid-70s here in N GA who rents and enjoys not having to perform home maintenance. Having a mortgage paid off is huge though.
Appreciate both videos. We rent presently while we are slowly building our downsize casita. Our rental is great situation with water and electricity included. Helps with retired budget control allowing us to contain cost on mostly DIY construction.
Nice. I never thought about your #1 reason - safety for love - but that is exactly how our home has been used by many family members Excellent - thanks for pointing it out for me
I can see this from many angles. Many older people simple do not maintain their property or do upgrades. When they pass their home often needs to be gutted. My sister is in her early 70s and I wish she would sell her home and move into town. She is very isolated and pretty much has no life. If you have educated kids they often move for careers, so much for Sunday dinners. My home is worth a lot of money and my taxes are insane. I could pretty much move anywhere and rent would be close to nothing. I love owning a house to I am not sure if I will ever move. There are pros and cons to everything. Owning a house is costly and even if its paid off repairs and upgrades need to be done. I will be replacing my roof shorty, then its my kitchen. If never really ends.
And that's why I will be renting in retirement. If you sell and put the money in some type of liquid investment the returns would likely pay for your rent. Example......you get $400,000 from the sell of your home and invest it getting 5-8% returns that's $20,000-32,000 a year.
@@ariefraiser140 That is a great plan. The other thing that happens is older people who don't sell their home and accumulate a lot of junk and when they pass their kids spend weeks and sometimes months cleaning out their parents home. I have lived this one. After my mom passed my sister and I started cleaning out our houses if unnecessary junk. I never want to put my kids in the same position.
@@mtadams2009 Good advice! And keep your affairs in order, even organizing it for your children with their involvement. And don't leave a will for probate; prepare a living trust. Your children will love you even more for doing this for them along with final arrangements.
@@virginiamoss7045 That is great advice. That is another thing my mom did not do She passed in January and we are still working through things financial. Take care
Also, if you are a car enthusiast, owning is the only option. My spouse wants a new place with an oversized garage so that they can have the space to work on their classic car even in the winter. Our current residence doesn't allow for even expanding our present one (plenty of space on the lot, the terrain just doesn't allow for it), so, when we relocate further south, that will be one of our Must Haves. Along with single level house....
All your points are good and valid. I would add Number 0 would be that, you have to live somewhere while you are alive. In addition, as forced savings and investment, you could also call out that as an investment vehicle, it allows someone to leverage their money. 20% down on a $300K home is $60K... and if that appreciates 4% per year, or $12K... that means you are making 20% return on your investment (assuming your mortgage pmt is about the same as a rent pmt). Another item to call out is that if you pay off your home, you no longer have that expense. The peace of mind not having a monthly nut to crack is a huge stress relief.
Great video! My parents sold their house and rented an apartment as soon as I moved out and they became empty nesters. I lived in another city, so this meant I had no place to stay when I came to visit because the apartment was small. This resulted in less visits over the years and contributed to losing closeness with parents and siblings. So I would say your point 2. "Grand Central" can be critical to keeping families close.
Other things to consider when owning, 1 the size of a home ( does one or two people still need 3500 square feet on 1/2 acre? ).2 maintenance on your home ( is it overwhelming? ).3 considering a condominium or a villa that you own ( what are the HOA fees?). You may be better off going with a smaller home, say 1200 to 1800 square feet and pay to have maintenance done. 4 your current home had a lot of memories but also a lot of stuff ( do you want to put the burden of getting rid of all that stuff on your family and loved ones or should you be doing a Swedish cleaning now while you can? ). Food for thought, any other considerations we should be thinking about out there in holy Schmidt land?
The great features of this channel is there is not a one size fits all and there are options to consider in making the decision that is optimal for folks
Another insightful video - thanks! My choice in early retirement, was to own debt-free. Perhaps a good next video would be the pros and cons or decision points on continuing a mortgage vs. no mortgage.
We actually went through this process, selling our home, investing the equity proceeds and moving to another city to experience a different lifestyle and renting. After four years we moved again, still renting. We ran the numbers and the opportunity cost of the down payment and improvements of buying vs. investing that money and renting did not pencil out - until the interest rates dropped. At 3%, a mortgage payment was less than renting for a like home. This was the tipping point for us, in addition to the benefit of locking in housing costs and being in control of our destiny rather than that of a landlord. Thanks for your channel. I have watched every video to date!
Thanks Geoffrey, One additional tidbit I should have mentioned. Like you say over and over again, everyones situation is different. For my wife and I we do not have kids. We have no one to leave our house, or anything else to. Consequently we look at housing first and foremost as an expense. And while building equity is good, we would have not gone that way if renting was cheaper out of pocket.
Mr. Schmidt, this video hit especially home to me. I am retired, recently widowed and gad I have no mortgage. I live on $2200.00/month social security. If I had a mortgage, I would have been forced from my home when I lost my spouse's social security. I am not exactly penniless as I have investments valued at $400K. My investments pay monthly dividends so when I need cash I can obtain it. The cash dividends are also invested in a separate account. I am fortunate that when I received an inheritance from my dad, I also inherited his financial planner. This man is a CFP and has done very well for me. I purchased a 2021 Ascent in December, and also have a 2013 Mustang convertible since Nov 2018. The car payments for those vehicles are paid each month from my investment earnings. My SS pays utilities etc. I do live a very comfortable life on about 20% of what I earned alone when I was working. You see my SS is not enough to even cover rent monthly. I am 68 years young and hope to live at least another 25 years. I know that as long as I do not spend money like a drunken sailor and do not begin to consume my principle, I will have money to live off of.
We live in a pricey part of Northern CA. Bought the house in 2006 and it doubled in value since. We also have two offices in the home as consultants so the tax write offs are significant. So YES we agree to own a home and not rent was better for us. The mortgage and property taxes are also a nice write off too.
Congratulations, you produce some of the best videos on TH-cam. Well Done. Went over both your rent v. own homes for someone retired. Reasons are of radically different importance to people. Being Mr. Fix it is really fun. So ones negative may be a positive for others. Keep up the great videos.
I didn't understand number two and one, which are absolutely applicable to a rented house, but I now see that you assume the rented house to be automatically of a smaller size than one owned. That doesn't necessarily need to be the case.
i live in a very expensive area when it comes to real estate, I've owned this house free and clear since '96 so although I'm mortgage free I still have taxes and upkeep. I pay about $5k a year for taxes on this small 6 room house on a small city lot. To rent a 5 room apartment in this area is about $3k a MONTH so I'm saving a good amount of money by owning the home outright even when figuring in the taxes and upkeep. Rents go up a lot faster than RE taxes. If i ever have to sell the house is worth a small fortune today so a lot of the money I have paid over the years will be repaid - rent does not get repaid. I will stay where I am as long as possible but if I have to move at least I'll have the funds to cover those costs.
I own my home. I worry that if housing prices continue to increase like they currently going there will be fewer homeowners anyway. You will be the only homeowner on the block and surrounded by renters. Renters have no skin in the game. Witnessed first hand in my current neighborhood after 2008. Many times neighborhoods change over time. Especially the reasonable priced areas. These hedge fund home buyers are potentially ruining first homes purchases for many. Owning a home is definitely a safe place for my family.
Retiring at 63.5 in November, with a manageable mortgage, however the house is going to need pricey maintenance pretty soon...these are great points to think about, if it were just my wife and I, I would sell and downsize in a minute, however the 92 yr old disabled MIL lives with us and a stepson may need our help next year...hummm?
Maybe sell a paid-off home and purchase a condo or townhouse. It’s smaller, paid off, exterior upkeep is part of HOA. No shoveling snow. No cutting grass.
Nice complement to the rent video, always get a chuckle when someone says this or that option is always the correct path. I've even been guilty of saying that myself at times. The last option struck home. Our son got divorced and they have a young child. His earnings are somewhat higher then his ex-wife so he is on the hook for child support and pre-school payments even though they have 50/50 custody. The result was that while his ex was able to buy a condo he was unable to afford rent.
Yep, we humans definitely have a tendency to project our values onto other people, and get quietly offended if anyone tries to offer us unsolicited advice. There is an absurd hypocrisy that seems to be built into humanity.
@@dlg5485 Maybe, but I get tired of the whiners that will not listen. I did tool & die work for many years. The true fool will come up to you, ask your opinion, and then argue with you. I really don't care what you do, but don't ask for help.
I would say owning your home, no mortgage, has many benefits. When there's a mortgage that's really much closer to renting. You do gain some control with a mortgage but lower risk when renting.
Really love your videos, Geoff! I appreciate how you give people options, everyone's situation is different. I like being able to analyze and better understand options, I have learned a wealth of information from you (sorry for the bad pun). Thank you again!
Retired and downsized. It was like swapping homes because I bought into a more upscale neighborhood. All the money I gain from the sale I paid my new home off. As of today I have around $100k equity. Yes, I pay double the amount of taxes.
Remember you get a lot more from buying a home besides a stable monthly mortgage payment! You'll also get forever rising taxes, a forever rising association fee, never ending repairs, a possible doubling of home owner insurance, etc. You may own your home but it'll own you too!
This is always the response from someone who's obviously never owned a house. My home is paid for, no HOA, or fees involved. Home owners insurance doesn't just 'double', it may go up, but you have a choice to go with another company, too. I maintain my property(haven't rented in over 40 years)and do not have 'never ending repairs'. If you have half a brain, you investigate the cost of the property tax before you buy. All my utilities(including 2 cell phones), taxes and insurance come to less than $400. per month(no water/sewer bill, have a well and septic). Nope, my home doesn't 'own' me. Also, if I ever decided to sell, I'd walk away with a lot of money, not just whatever part of a security deposit a landlord decides to return. Following your logic(or lack thereof)you're 'owned' by a landlord, paying their insurance, taxes, water/sewer and upkeep, along with paying off their mortgage, in the form of rent and you don't even realize it. Where do you think they came up with the amount to charge you for rent? I'll give you a clue; they didn't pull the rent amount out of their butt.
In general, owning is better than renting but not always. If you live in an area where average homes cost $1million it is probably not worth it. The mega-mortgage (along with other debts such as student loans, car loans and raising kids) will pretty much ensure that you have no ability to save much of anything until you are around 50 years old and your income finally gets high enough to overcome all the stuff that was holding you back. Being 50 and broke (other than your home equity and maybe $150,000 in a 401K) is not a good place to be. You'll be hustling until you are really old and tired to make up for lost time with this approach.
Might refer to "assisted living" or "senior living in reference to renting,for some that might be best,but for the able bodied and healthy retired person or couple who don't want to move around to different areas to live I think renting is good for someone--and that someone isn't the renter. The house should ideally be paid for and in an area that the owner is satisfied with in terms of local natural recreation opportunities,land for gardening,and possibly near to museums and other attractions that are usually only found in urban areas,however I would much rather see forest or rural ambiance rather than the ugly urban environment. Another phenomenon is the retiree or couple who wants to move about and tour so much that they put a good part of $100,000. into a nice RV (truck drawn travel trailer or bus based "home on wheels" and spend much of their time living in various National Parks and other areas and enjoying that life including perhaps rendezvous with various like minded friends but most such people need a home base in addition to the vehicle
People over 65 should not have to pay property taxes. Tough when your living off of social security, pension plans and savings. Let the younger generation pay.
I'd say you left out the possibility of high or perhaps extraordinary inflation, which we certainly are seeing right now in real estate, the stock market, and the consumer price index since vaccinations to reduce impact of the pandemic became widespread. Inflation could get worse, maybe much worse, and potentially go on for a much longer time than some current forecasts predict. Whatever you think the odds are of that, having a fixed-rate mortgage payment on your primary residence (along with Prop 13 here in California that limit ours property tax increases to a maximum of 2% per year) is an incredible insurance policy in the event inflation does turn out to be significant or worse.
Agree with all your points. It's so funny that I remember going to Sunday night dinner with my grandmother and now I'm hosting Sunday night dinners. I do want to as they say, 'age in place' but my daughter said that when I fully retire and rely on Medicaid that they will not allow me to have assets? I'm not sure about that but I'm keeping my house and if need be get private insurance.
Owning beats Renting is an easy one, if not a two story. Look ahead, plan, we did 1 story bought in 96, in a stable area. When desert landscaping is too hard to take care of, then we'll sell (new roof in 2019, will last 30 yrs, I'll be 85 then & time to downsize, if still kickin'.) Kids bought homes local too. It's all in the planning. Health is the wild card.
Wouldn't it make sense if you need space for TLC (point 5) to temporarily rent a space for the ones in need than to maintain a larger facility "in case"? There is an old saying "don't build the church based on the Easter crowd". The above space consideration is independent if you rent versus own. You only pay for the space if/when needed versus every month.
I don't really dis-agree with you Mike, but I do think both points of view have a certain validity. Please let me explain with a true story. My wife and I bought our house back in the mid-80s. When we bought it the house was clearly too big for us, but our kids were small and over time we "grew into the house". Now fast forward 30 years to 2014, the mortgage is paid off and the kids are married and out of the nest. Then one evening a drunk who had no business behind the wheel of a car drove his pickup truck into my sons house. Not only did my sons house sustain massive damage, but his son was also killed in the "accident" (in my mind it was no accident, but that's a different story!). My daughter-in-laws family could not take them in for a number of reasons, so my son, his wife and and family moved in with us, and here is where they lived through the months of not only rebuilding their house, but also coming to grips with the loss of their son (my grandson). We didn't buy the house with such an event in mind I promise you, but my wife and I were very thankful that we were able to take them in when they suddenly needed a place to live. I suppose their homeowners insurance might have helped them out, but this just seemed like such a superior solution!
I think when you own your home you have way more flexibility and control of your money then when you rent. Plus if you have no retirement plan other then SS I think owning a property or two to create monthly revenue is a great way to finance retirement, that's what I'm doing. I semi retired at 57 and when I fully retire at 60 ( 1 year away) I will have rental income of $3,200 a month.
I own my house fee simple. At 970 sq ft it is more than enough for me and the cat. It also provide a two bay garage with shop, also 970 sq ft. Mowing the sloping yard is more tiring year-to-year. I would like to live in-city where groceries, medical, library, park and coffee were within walking distance. But condos and co-ops are too expensive, and landlord owned apartments are all but a thing of the past. I had hoped that when the working aged people fled the cities there would be reasonably priced units available for people who see the advantages of city living.
Property taxes come to mind. If I were to relocate to a state with high property taxes, I think I might consider renting. Conversely, if I were inclined to get a mac-mansion with a large space for entertaining extended family, I'd check property taxes first.
I have an older sister that moved into "Town" when she retired. She owned a large home in a desirable area with property and could not maintain it anymore. I just found out she is now holding a mortgage on this old row house. I was amazed at such a stupid move. Downsizing is fine, but upping your bills? If you are paying a mortgage when retired, it makes no difference if you rent. I and some friends easily live on our SS checks. We did the major repairs a few years before retirement. Imagine paying a mortgage AND paying for a new roof or water pump in the well. Owning a home is the way to go, but do your preplanning. Anything can happen. If the township is planning to run sewage out past your house in a few years and you pay by road frontage, be aware of these things.
Don’t forget the cost of fixing up your home to sell. Packing up all your stuff. When you’re old it’s not easy or fun . Very stressful and exhausting 😮
Im debt free, Own my mortgage free home. I like to venture out into the world for work and play knowing I always have my home to come back too...it's my anchor. Its home base, where I launch my life adventures...
The Truth indeed ❣️
I concur, Michael.
Home, a place where you and loves one's can always come back. My grand children love visiting, run in my backyard, eat, laugh, play games. and sleep. Stability/continuity invaluable.
for those who are going to complain....just stop. These videos are great and helpful. Every situation is different and this gives perspective from other views that allow us to make educated decisions in our own lives. Many of the situations he speaks about do not apply to me, but I can pick through the videos and get some insight and decide for myself what applies to me...and being 15 years from retirement, allow me to see situations I didn't think about and maybe work to get into a different place in retirement. We should all be looking to learn new stuff each day.
I am nearly 70 but haven't yet retired. In 2013 I bought the home of my dream with a 15-yr fixed mortgage. I put every spare dollar into paying of that mortgage and managed to pay it off in 6 years. Today I put that mortgage payment into my savings account. And I do most of my home repairs, both because it's cheaper and because I enjoy it. Since buying my house it has nearly doubled in value and next year or the year after it's projected to double again. I see no reason to sell and rent, I am in my castle.
Love you thinking. I think the "own vs. rent" is a very personal choice. I'm 63. We just sold our home of 24 years. Way too big for us, way too much stuff. But it was a lovely gathering place with lots of memories, emotional to sell. We are now renting a 2-bed apartment 1,100 square feet vs. the 3,600 square feet before plus garage & shed. Downsizing was INCREDIBLY rewarding and liberating. We might buy a smaller home at some point in a state or country with lower taxes. We might not. For now, the smaller living space with no maintenance and no ownership cost surprises makes me love the decision to sell & rent. It is just working for us right now.
I bought smaller than you are renting. It is a joy to own in retirement.
Owning my home outright allowed me to retire this month at 59 and pay for my healthcare. If I had a house payment too, I couldn’t do it. Thanks for the great video.
...and if you ever need more cash and move to an apartment, downsize or assisted living, you have it in equity and can always sell the house and recover...$200k, $300k, $500k or more!
Plus with rentals come a lot of restrictions and significantly higher taxes as not homestead..... I avoid rental property like the plague!
Some more thoughts of home ownership. At some point you have to save for repairs to the roof, hvac, windows, driveway, etc. so make sure you have savings stored up for those expenses. Also keep shopping around for home and car insurance and fixed gas or electric rates when they are lower i.e. reduce expenses where you can. Also be prepared to spend on a landscaper, snow service, gutter leaf remover and potentially a caretaker. Depending on where you live the community might offer many services for older folks who want to stay in their home for as long as possible.
There is a big difference in owning and making payments on (what most people consider owning!)
I believe you should have a PAID OFF HOUSE in Retirement!
Love the video's, This one especially, I am still working at 66 and hope to retire soon, I have worked as a 1st responder for a non-profit for about the past 40 years. I was injuied last year and am no longer able to work on the streets but I have a skill set that has made it possible for me to stay working. I do want to retire soon. We have raised 6 children and still live in the house we bought almost 40 years ago. We have made many upgrades and plan to stay here during retirement, our vehicles are all paid for and taxes in this small town are very reasonable. Other than the snow in winter it is a great little place. I agreed with every point made and I thank you for all the advice.
I think of it this way: I have a paid for house with taxes and insurance that do creep up as well as maintenance and replacements. Soon I am going to have to be spending a lot of money paying others to do the upkeep I have always done which is a hassle to find the right people if any at all, a real headache. Renting would take away nearly all of that. If the money I get for the sale of my house will, when invested, generate enough money to cover the cost of renting a smaller place (easier to keep up) then renting makes sense for me. Yes, rent isn't stable, but neither are taxes, insurance, hired help, maintenance, etc. on a house. It's hard to know which way to go.
Finding decent rentals with sane landlords is hard to do. At least when you own you are the controller instead of the controlled.
@@Elizabeth-yg2mg Yes, that's been my motto since my last apartment in 1979. I swore I would never live in a rental apartment ever again. But I am 72 years old now and alone with failing health and not a lot of money, just enough if I live frugally. I can't afford assisted living and really don't need that now. So, yes, finding the right place for me is going to be really difficult.
I also thought being the controller would be great when I had my own well instead of municipal water with monthly bills. It's been an expensive hassle for years trying to get the water right with at least 30 water tests and counting. I'd rather be at the mercy of municipal water with a monthly water bill. At least I found a fairly good plumber out here in this rural area. After 13 years I still haven't found any other trade that's satisfactory.
@@virginiamoss7045 You aren't that old--you might have 30 or more years to go--you can keep on doing your own work. Good luck with the water issue.
This is something I'm considering now. It's getting harder and harder to find dependable people to do the maintenance on my home. I do it because I'm not going to let my biggest investment decline in any way. For the time being, I've decided to stay put but the rental option is out there on my radar. Another reason I'm considering downsizing to a rental is to make it easier for my family should I ever have to go into a care facility. They wouldn't have to sell the house but could simply give notice and move out my stuff. Things to think about, especially as I get closer to 80.
@@Elizabeth-yg2mg That's what I thought last week, at least until my 80s. Today I'm in atrial fibrillation and my cardiologist can't see me until after September, they say, and it's going on three days. Says to go to emergency room which I'm not going to do. I'll see if my primary care person can do an ECG in her office and let her decide what to do next. Medication has been controlling for a year and a half and suddenly it is not, so all I can do is sit or lie down, no capacity to do anything physical. You just never know at this age. Thanks for the positive thoughts, though.
Having no debt and a paid for home is a huge part of my retirement plan. I can't even conceive of renting, whether I'm retired or not. But renting as a retiree and being at the mercy of rent increases seems insane to me, especially with how the rental market is in my area right now. Also, I want my step-daughter to always have a place to go and room of her own whenever she needs it even when she's an adult. I'm working hard to pay off my mortgage asap.
I really liked this video. Your number 1 reason, "Safety for Loved Ones" is my primary reason for owning our home. My children know that if there is ever a crisis in their lives, there is space for them (and their family) at home. This is also why we probably won't downsize. Our home is a manageable size, but big enough for an emergency situation.
GREAT POINT!
Another issue with renting is if you have pets - it is harder to find a rental if you have several pets, and you have to pay an additional amount per pet. If you are an animal lover, a rental is, then, not always an option.
and then you will have neighbors that don't like animals in general and certainly not next to them.
@@justincase2830 this will only matter if you live on in a typical suburban tract house. And, even then, don't assume that people around you won't like animals. As we have indoor cats, it is not an issue whether or not our neighbors like animals or not. Pet rent IS an issue.
You're definitely right but that is a personal matter and not a financial situation for the masses.
on my rentals NO PETS i hate pets
@@randomvideos3674 Sorry that you feel that way. I can understand how you would feel that you don't want pets in your rentals as some people don't take good care of their pets and let them cause damage, but most people are not that way. But to hate pets in general, I don't know. Just have to think that you don't realize that for many people, their pets are their kids and keep them going.
You might have missed one: pets.
Often keeping pets in a rental is difficult (expensive) to impossible (prohibited.)
I have been owned by cats most of my life and I want to keep my little furry friends around.
When my mother decided to join a retirement community in her 80's (she lived into her 90's) I adopted her cats, since she couldn't have them there.
She appreciated daily reports on their lives and one of them outlived her (he lived to be 21.)
I like your choice of words, "I have been owned by cats" as I find it hard to think of 'owning' any other living creature especially ones I love. Having said that, it's wonderful you were able to be there for *them* & your mother in that way. You gave them both peace of mind. =^.^= =^.^=
Great comment! My owners (three cats) are truly my family now, and they are THE BEST. I will happily pay others to do stuff to remain in their house with them. 😻
From my experience, most places don't take pets, even cats, who generally don't cause much damage. If they do take pets they want extra rent plus deposit. Many people fib and say they don't have cats but then you have to worry about getting caught and having to move or get rid of the little darlings.
I prefer to own but it's not for everyone. For example, I know a widow who owns a home and has only modest savings. The home is her largest asset. It has become a weight on her. By liquidating the home she'd clear close to $400k which will pay for an easily managed apartment for the rest of her life, and free up some funds for other needs.
Could she buy a guaranteed fixed inflation proof annuity that would pay enough for the rest of her life with that $400K to provide for renting that apartment with some spending money left over? (Maybe a question for Mr. Schmidt)
@@davidpowell3347 The cost of maintaining that home will my into the equity especially if it's an older home. Also, consider the property tax cost versus a smaller home like a condo.
We are about 3/4 way towards paying off the mortgage and are in our late 50's. Our plan is to keep the house another few years, already downsized and then sell it. Our three kids live around the country and we are going to move about every year give or take a few months- kinda like travelling artists/academians (we are neither but philosophically we are! ha) . That way we can really spend time with them- not just in and out over a holiday. Also, you can't do long visits and leave your home vacant for weeks/months. We want our space and they need theirs so moving in with them is not what we want, and with their own work/kid/marriage normal stress (and intimacy!! ha), they need their space, too. They are all at point where their vacations are for their own travel/sanity or must be used on our grandkids. We plan on volunteering in each new area, do festivals, site-see, help the kids by driving the grandkids to school. The days of crates of figurines and handed-down crap ahh.... antique stores are full of stuff no one wants. Our kids have to stay lean 'stuff' wise as they may have to relocate one day. We can pay a mover very cheaply to move our minor favorite things like K-cup machine- TV, bikes, etc. The clothes can all fit in our Pacifica. Then we move to the next kiddo- and your lowest rent is when you first move in, and as a retired couple, we aren't worrisome to a land lord like crazy partiers. This always places us near one of our kids, but then we rotate fairly. All the most important things (our family photos) are all digitized, on the web and backed-up on archival DVDs. Healthcare we just do concierge care and keep a major medical plan. If we die, we die. We have DNRs on file for the states we travel to. Also, like one commenter said, it relieves the kids, dealing with work and kids of their own from having to deal with long-distance parents passing or refusing to leave their homes yet couldn't understand why everyone couldn't come to their rescue from across the country- it's a different age and our own parents and grandparents had a tough time because they were so stuck on their homes. They always said they didn't want to leave friends, but they would lean on their friends who were also ill, in their 80's, had their own families- you can't make staying in your house your only plan- the Norman Rockwell vision of life may not fit like it used to unless a family is fortunate enough that everyone can find jobs and things in the same close proximity.
I sold my large home and downsized into a brand new smaller house with a large yard. We own our home without debt in retirement, and a newer home needs fewer repairs. Since we have pets, renting is never an option.
I never considered your #1 point of providing a place of safety for family that might loose their job. Thanks for bringing it up. As my parents aged, the “Grand Central” point migrated to their children’s homes because Mom simply couldn’t host a party of two-much less 20. I’m enjoying your videos.
Thanks very much for the comment and kind words!
I just wanted to say thank you for sharing your vast wealth of knowledge.
Renting should only be done when you are very young and getting started. Owning is the first step to build wealth.
The dog and I moved the day after I retired. It was to my rural secondary property, which was also paid for(my son and his wife sold their house and bought my old one). I've always done most of the repairs needed on any house I've owned and made sure everything was replaced, or updated, before I retired. However, I'm aware that down the line, I may have to pay someone to make repairs that I can no longer do(yard work wouldn't be a problem, have a riding lawnmower and if I can't do it, my son would). That's why I continue to save. Living in the home I own gives me peace of mind that I certainly wouldn't have renting. My property is in a Lady Bird deed(a trust that's legal in my state)and the minute I die, my son becomes the owner, no probate. Loving my stress free retirement!
I own my home in town free and clear. I also have a small farm in the country side that’s paid for as well. Actually, no debts at all. It sure gives you peace of mind in retirement.
You still have property taxes, insurance and maintenance. That’s revolving debt
@@memelc5655 that’s called living. If I was renting, I would be paying someone else’s mortgage and property taxes and insurance and maintenance. The only way around it is to be homeless and live in the woods.
I have an aging mother who will soon need to be moved to assisted living. She has a home, that once we sell it, it will give us the money (along with her pension and SS) to pay for this for many years. Owning a home is like a long term care policy.
My mom's $100K nest egg was gone in her first year in a nursing home. She went into a Medicaid bed and lived there another 3 years. It worked out just fine.
Wow assisted living, she will be depressed, be a good son and have her live with you or siblings.
Ha! You think that her house will fund assisted living for many years? You are dreaming. My mom was looking into it before she died and believe me, you're dreaming.
I always advise to buy a home by age 35. Make sure it’s a forever home. It’ll be paid off by the time you retire at age 65. It is so nice to retire mortgage free.
Or pay it off in 15 years & redirect the $ that went to home loan to accelerate savings.
No such thing as a "Forever home" this side of eternity. We just moved from NJ from a house we enjoyed for 30 years. We expect to stay in our new luxury condo for perhaps 10 years and then move in with my son, whose kids will be out of the house by then. Or maybe we will stay, this place is paid for and cheap. My parents were in Myrtle Beach for over twenty years and then moved to Florida in their late 80's. I would expand you advice- retire debt free. Selling that 5 bedroom shack that we raised our kids in was a big part of our move into retirement. I wanted to work another 5 years but God has a better idea.
Several people have commented about expensive future maintenance/repairs. Here is my plan: make sure to do the major things like a roof replacement before retirement. My house is a small country cottage, 864 sq. ft. with a 26’x24’ garage/shop. I will have a modest retirement income and to me it just makes the most sense to enjoy my senior years in a paid for easy to care for house that should go the rest of my life without needing any expensive work. Your results may vary
I’m very pleased to know by the time I retire my home will be paid for. That gives me some piece of mind. Its a 1600 sq ft with a small manageable lot. Gives me just enough space for puttering around. I know not all people have the option to own. And for some it doesn’t make sense. I’m sorry you got blasted with some nasty comments. Keep up the good work with your information.
I live in an over 55 retirement apartment/hoa Love my neighbors. It will be hard to leave.there is a lot of security in this situation. I am still working. Living here has introduced me to what life after employment could be like. And it looks pretty good.
Owning, A person can garden, plant fruit trees and bushes. A gun safe and or guns are sometimes restricted from a rental property. If you prepare your home for long term low maintenance, it gets easier to keep it up during retirement. New roof, siding, look at appliances and such before retirement. You can easily beef up security of your home, but a rental place you pretty much have to live with the security that it comes with.
Owning a home means you can personalize the place much more than a rental.
Owning a home means you get to have people stop by and visit for the weekend without complaints from neighbors about parking spaces, noise or the landlord threatening to evict, raise rent, etc.
Stability of location means a lot for medical reasons, don't have to change doctors, dentists, physical therapists.
Stability of location is also good for your bills, they won't get lost in the move.
Just looking for a place to live is stressful, moving is even more stress.
You can take your time giving away your stuff, if you move to a smaller place so much has to be given away, sold, dumped that just adds to the work and stress.
Storing for shortages such as last year's and this year's is easier if you own the place.
Landlords sometimes sell property. New landlords can raise rent, raze the building, neglect the property, change the rules. After all, their mortgage is probably much more expensive than the previous owner.
Equity is good in an emergency. A couple days and I can turn some of it into cash. A few weeks and my heirs could turn all of it into cash.
Added feature to this note, look at the size of houses the "greatest generation" was raised in, and the size of those families. Now, admit that most modern houses are just huge for almost no reason except to pile on profit to the builder. Next, when the young ones in the family are looking for a home coach them as much as possible to buy a simple home that is easy to pay off, save money and enter retirement with more cash than can be spent by reasonable people. It is working well for me. When my co-workers saw the house I bought for the money we made, they were stunned that it was so small. But it paid of quick, and allowed me to save a lot of money.
Your videos are wonderfully helpful and also highly appreciated. We own outright and to be honest, can't imagine having to pay rent and therein, make some investor wealthy. We just find it easier to have a bit more breathing room as we're retired, without a mortgage looming over our heads.
When I became a widow at 60 my middle daughter and fam moved in with me. They had been renting. This has allowed me to become a snowbird in retirement at 62 with them being responsible for all upkeep on my paid off home. I spend the winters with my oldest daughter and her family in the south. It has allowed me the time to adjust to this new phase of my life with less headaches knowing someone is taking care of the family home and it's not me. They will eventually own the home when I am ready to sign it over to them. The property is in the country on land that has been in my family for over 50 yrs.
Sounds like everyone is sane and reasonable--a great setup!
Good vid. I bought my apartment about 10 years ago.
The price has increased by about 25% since I bought it. My mortgage isn’t that much and I have no problems paying it.
I know a couple of people who didn’t buy and continued to rent and are now unable to buy because of the price.
The rent will no doubt be higher when they retire where as my mortgage will stay the same or be paid off.
I see them heading for a very tough retirement.
I liked this as well as the rental video. I owned my own home, and made the decision to move cross country to live near to my daughter, and for some new-place adventures. I am now renting a great apartment. Selling freed up the equity in my home for my use generally, and pays easily for the expense of my rent. My personal expenses were getting higher for some medical issues, and my travel money was depleted, so instead of sitting on my $400,000 equity, I am now, at 70, able to live my life a bit freer.
"Theres no place like home" for us as well as kids and Grandkids 👍❤
My sentiment exactly. Of course it helps when you really *like* let alone *love* your kids & grandkids so, we're lucky. ;-D
@@anacapritropics1913 ditto. 👍👊😁
We still live in the same small house purchased 35 yrs ago. Long paid off. We could never afford the rent on this house. Low maintenance patio home still in great neighborhood. Best decision we made. Like your vdos!!
All good reasons. Thank you for bucking the 'renting is better' content out there.
Pretty much none of the points listed in the “5 reasons” apply to me. I am single and have no children. My house will be paid for in 6 years and I consider that a huge financial win. The taxes go up every year, but that is much cheaper than paying rent. I do all of the upkeep myself but those expenses could climb later if I no longer can do the work. I plan on staying in my home as long as I can, but it can serve as a “savings account” if I have to sell later.
Perhaps if you love where you live you could consider taking in a boarder. My brother lived in our basement for years as he was down on his luck and he did help with maintenance and took us out to eat now and then. As we are retired now we sold the big house and moved to a condo. HOA fees are less than my old property tax bill. I wish you well, Cindy!
I'm in the same situation except I paid off my house years ago. My property taxes haven't gone up in over 5 years. You'll have to drag my dead body out of my house before I move. I made my home an environment where I want to be. The house inside and out, the landscape, the birds and rabbits that visit make my place special to me. I also cultivated friendships with my neighbors, and we look out for each other.
tell the people who say bad things to not watch its about things that may or may not help as everyone has a situation can change.....Great Job your doing for us!
Goes with the territory of being on YT.
Thanks for posting. When I was in my early twenties, my wife and I rented an upscale apartment in So Cal for $175 per month. Today in So Cal it would be rare for a person to find a studio for under $1,700 per month. I went on to buy a home in the early 70s and my mortgage payment was around $230 per month. Fast forward to 2021 and living in N GA, my property taxes when broken down to a monthly payment is more than the mortgage payment on my first home. Although it can be argued that rent is money down the toilet. I have a friend in his mid-70s here in N GA who rents and enjoys not having to perform home maintenance. Having a mortgage paid off is huge though.
Appreciate both videos. We rent presently while we are slowly building our downsize casita. Our rental is great situation with water and electricity included. Helps with retired budget control allowing us to contain cost on mostly DIY construction.
nice to here! i feel the same way!
Very thoughtful video. Everyone who is thinking about selling their house should watch this.
Nice. I never thought about your #1 reason - safety for love - but that is exactly how our home has been used by many family members
Excellent - thanks for pointing it out for me
I can see this from many angles. Many older people simple do not maintain their property or do upgrades. When they pass their home often needs to be gutted. My sister is in her early 70s and I wish she would sell her home and move into town. She is very isolated and pretty much has no life. If you have educated kids they often move for careers, so much for Sunday dinners. My home is worth a lot of money and my taxes are insane. I could pretty much move anywhere and rent would be close to nothing. I love owning a house to I am not sure if I will ever move. There are pros and cons to everything. Owning a house is costly and even if its paid off repairs and upgrades need to be done. I will be replacing my roof shorty, then its my kitchen. If never really ends.
And that's why I will be renting in retirement. If you sell and put the money in some type of liquid investment the returns would likely pay for your rent. Example......you get $400,000 from the sell of your home and invest it getting 5-8% returns that's $20,000-32,000 a year.
@@ariefraiser140 That is a great plan. The other thing that happens is older people who don't sell their home and accumulate a lot of junk and when they pass their kids spend weeks and sometimes months cleaning out their parents home. I have lived this one. After my mom passed my sister and I started cleaning out our houses if unnecessary junk. I never want to put my kids in the same position.
@@mtadams2009 Good advice! And keep your affairs in order, even organizing it for your children with their involvement. And don't leave a will for probate; prepare a living trust. Your children will love you even more for doing this for them along with final arrangements.
@@virginiamoss7045 That is great advice. That is another thing my mom did not do She passed in January and we are still working through things financial. Take care
Thanks for being honest 😊
Also, if you are a car enthusiast, owning is the only option. My spouse wants a new place with an oversized garage so that they can have the space to work on their classic car even in the winter. Our current residence doesn't allow for even expanding our present one (plenty of space on the lot, the terrain just doesn't allow for it), so, when we relocate further south, that will be one of our Must Haves. Along with single level house....
All your points are good and valid. I would add Number 0 would be that, you have to live somewhere while you are alive. In addition, as forced savings and investment, you could also call out that as an investment vehicle, it allows someone to leverage their money. 20% down on a $300K home is $60K... and if that appreciates 4% per year, or $12K... that means you are making 20% return on your investment (assuming your mortgage pmt is about the same as a rent pmt). Another item to call out is that if you pay off your home, you no longer have that expense. The peace of mind not having a monthly nut to crack is a huge stress relief.
Good points.
Yes, but you have taxes, maintenance and larger utility bills then a person renting an apartment.
@@rozinant1237 Not if I downgrade and own a similar sized condo
Great video! My parents sold their house and rented an apartment as soon as I moved out and they became empty nesters. I lived in another city, so this meant I had no place to stay when I came to visit because the apartment was small. This resulted in less visits over the years and contributed to losing closeness with parents and siblings. So I would say your point 2. "Grand Central" can be critical to keeping families close.
Other things to consider when owning, 1 the size of a home ( does one or two people still need 3500 square feet on 1/2 acre? ).2 maintenance on your home ( is it overwhelming? ).3 considering a condominium or a villa that you own ( what are the HOA fees?). You may be better off going with a smaller home, say 1200 to 1800 square feet and pay to have maintenance done. 4 your current home had a lot of memories but also a lot of stuff ( do you want to put the burden of getting rid of all that stuff on your family and loved ones or should you be doing a Swedish cleaning now while you can? ).
Food for thought, any other considerations we should be thinking about out there in holy Schmidt land?
We are blessed to have our own home❤great video.
The great features of this channel is there is not a one size fits all and there are options to consider in making the decision that is optimal for folks
Another insightful video - thanks! My choice in early retirement, was to own debt-free. Perhaps a good next video would be the pros and cons or decision points on continuing a mortgage vs. no mortgage.
We actually went through this process, selling our home, investing the equity proceeds and moving to another city to experience a different lifestyle and renting. After four years we moved again, still renting. We ran the numbers and the opportunity cost of the down payment and improvements of buying vs. investing that money and renting did not pencil out - until the interest rates dropped. At 3%, a mortgage payment was less than renting for a like home. This was the tipping point for us, in addition to the benefit of locking in housing costs and being in control of our destiny rather than that of a landlord. Thanks for your channel. I have watched every video to date!
Thanks Geoffrey, One additional tidbit I should have mentioned. Like you say over and over again, everyones situation is different. For my wife and I we do not have kids. We have no one to leave our house, or anything else to. Consequently we look at housing first and foremost as an expense. And while building equity is good, we would have not gone that way if renting was cheaper out of pocket.
Mr. Schmidt, this video hit especially home to me. I am retired, recently widowed and gad I have no mortgage. I live on $2200.00/month social security. If I had a mortgage, I would have been forced from my home when I lost my spouse's social security. I am not exactly penniless as I have investments valued at $400K. My investments pay monthly dividends so when I need cash I can obtain it. The cash dividends are also invested in a separate account. I am fortunate that when I received an inheritance from my dad, I also inherited his financial planner. This man is a CFP and has done very well for me. I purchased a 2021 Ascent in December, and also have a 2013 Mustang convertible since Nov 2018. The car payments for those vehicles are paid each month from my investment earnings. My SS pays utilities etc. I do live a very comfortable life on about 20% of what I earned alone when I was working. You see my SS is not enough to even cover rent monthly. I am 68 years young and hope to live at least another 25 years. I know that as long as I do not spend money like a drunken sailor and do not begin to consume my principle, I will have money to live off of.
I like point #1 about being there for the displaced. Didn't think of that
I paid my house off 15 years ago way before I retired...I can't imagine having a mortgage or paying rent ever again.
We live in a pricey part of Northern CA. Bought the house in 2006 and it doubled in value since. We also have two offices in the home as consultants so the tax write offs are significant. So YES we agree to own a home and not rent was better for us. The mortgage and property taxes are also a nice write off too.
Sounds Braggy. Congratulations
I watched the other video, and thought about renting. Now rent can have some benefits but one of the reason I chose not to is rent continue to go up.
Thanks, Geoff! The info you provide is very helpful. Keep up the good work! Thanks again!
I try to watch your vids as they come. I am old enough to retire but not prepared so yours is Good/Helpful and FREE advice! TY,
Congratulations, you produce some of the best videos on TH-cam. Well Done. Went over both your rent v. own homes for someone retired. Reasons are of radically different importance to people. Being Mr. Fix it is really fun. So ones negative may be a positive for others. Keep up the great videos.
Thank you for this valuable insight. We are on the cusp of retirement so these videos are extremely helpful. 👍
I didn't understand number two and one, which are absolutely applicable to a rented house, but I now see that you assume the rented house to be automatically of a smaller size than one owned. That doesn't necessarily need to be the case.
i live in a very expensive area when it comes to real estate, I've owned this house free and clear since '96 so although I'm mortgage free I still have taxes and upkeep. I pay about $5k a year for taxes on this small 6 room house on a small city lot. To rent a 5 room apartment in this area is about $3k a MONTH so I'm saving a good amount of money by owning the home outright even when figuring in the taxes and upkeep. Rents go up a lot faster than RE taxes.
If i ever have to sell the house is worth a small fortune today so a lot of the money I have paid over the years will be repaid - rent does not get repaid. I will stay where I am as long as possible but if I have to move at least I'll have the funds to cover those costs.
Sounds like California living.
Very interesting point # 1. I had not considered this as I approach retirement and my wife and I are considering our options. Thank you.
I own my home. I worry that if housing prices continue to increase like they currently going there will be fewer homeowners anyway. You will be the only homeowner on the block and surrounded by renters. Renters have no skin in the game. Witnessed first hand in my current neighborhood after 2008. Many times neighborhoods change over time. Especially the reasonable priced areas. These hedge fund home buyers are potentially ruining first homes purchases for many. Owning a home is definitely a safe place for my family.
Retiring at 63.5 in November, with a manageable mortgage, however the house is going to need pricey maintenance pretty soon...these are great points to think about, if it were just my wife and I, I would sell and downsize in a minute, however the 92 yr old disabled MIL lives with us and a stepson may need our help next year...hummm?
Maybe sell a paid-off home and purchase a condo or townhouse. It’s smaller, paid off, exterior upkeep is part of HOA. No shoveling snow. No cutting grass.
You give such great points to consider. Thanks.
Great and logical information. Thank You!
Nicely prepared and stated... thank you 😊
Thank you for updating this video to add current events.
Nice complement to the rent video, always get a chuckle when someone says this or that option is always the correct path. I've even been guilty of saying that myself at times.
The last option struck home. Our son got divorced and they have a young child. His earnings are somewhat higher then his ex-wife so he is on the hook for child support and pre-school payments even though they have 50/50 custody. The result was that while his ex was able to buy a condo he was unable to afford rent.
Yep, we humans definitely have a tendency to project our values onto other people, and get quietly offended if anyone tries to offer us unsolicited advice. There is an absurd hypocrisy that seems to be built into humanity.
@@dlg5485 Maybe, but I get tired of the whiners that will not listen. I did tool & die work for many years. The true fool will come up to you, ask your opinion, and then argue with you. I really don't care what you do, but don't ask for help.
@@dlg5485 👍
@@dlg5485 FYI I just might quote you sometime.
Jeff - Your #1 point rings soooo true. [ I am | we are ] so lucky to have son living with us. I'm in no hurry to change the arrangements.
I liked your video unlike other advisors suggest to downsize!!
Increasing equity paying yourself..and dome of us have a disabled child living at home and renting you zre paying off somrone elses mortgage
Great video! You really pulled my heart strings with that last reason. It was a well thought out and very appropriate. Thank you!
All great points!! Thank you
I would say owning your home, no mortgage, has many benefits. When there's a mortgage that's really much closer to renting. You do gain some control with a mortgage but lower risk when renting.
That's really not true. When you rent you are buying someone else's house. With a mortgage you are buying your own house. That's the difference.
I like your calm demeanor!
#1 reason is so important in todays world
Really love your videos, Geoff! I appreciate how you give people options, everyone's situation is different. I like being able to analyze and better understand options, I have learned a wealth of information from you (sorry for the bad pun). Thank you again!
Thank you for all your advice. It is sincerely appreciated.
My pleasure
Retired and downsized. It was like swapping homes because I bought into a more upscale neighborhood. All the money I gain from the sale I paid my new home off. As of today I have around $100k equity. Yes, I pay double the amount of taxes.
Remember you get a lot more from buying a home besides a stable monthly mortgage payment! You'll also get forever rising taxes, a forever rising association fee, never ending repairs, a possible doubling of home owner insurance, etc. You may own your home but it'll own you too!
This is always the response from someone who's obviously never owned a house. My home is paid for, no HOA, or fees involved. Home owners insurance doesn't just 'double', it may go up, but you have a choice to go with another company, too. I maintain my property(haven't rented in over 40 years)and do not have 'never ending repairs'. If you have half a brain, you investigate the cost of the property tax before you buy. All my utilities(including 2 cell phones), taxes and insurance come to less than $400. per month(no water/sewer bill, have a well and septic). Nope, my home doesn't 'own' me. Also, if I ever decided to sell, I'd walk away with a lot of money, not just whatever part of a security deposit a landlord decides to return. Following your logic(or lack thereof)you're 'owned' by a landlord, paying their insurance, taxes, water/sewer and upkeep, along with paying off their mortgage, in the form of rent and you don't even realize it. Where do you think they came up with the amount to charge you for rent? I'll give you a clue; they didn't pull the rent amount out of their butt.
@@kibblenbits No problem! I don't have a problem with you living in a slum!
Another good video! Thank you
very good video - clear, concise, with valid points for a certain group. thank you !!
In general, owning is better than renting but not always. If you live in an area where average homes cost $1million it is probably not worth it. The mega-mortgage (along with other debts such as student loans, car loans and raising kids) will pretty much ensure that you have no ability to save much of anything until you are around 50 years old and your income finally gets high enough to overcome all the stuff that was holding you back. Being 50 and broke (other than your home equity and maybe $150,000 in a 401K) is not a good place to be. You'll be hustling until you are really old and tired to make up for lost time with this approach.
Might refer to "assisted living" or "senior living in reference to renting,for some that might be best,but for the able bodied and healthy retired person or couple who don't want to move around to different areas to live I think renting is good for someone--and that someone isn't the renter.
The house should ideally be paid for and in an area that the owner is satisfied with in terms of local natural recreation opportunities,land for gardening,and possibly near to museums and other attractions that are usually only found in urban areas,however I would much rather see forest or rural ambiance rather than the ugly urban environment.
Another phenomenon is the retiree or couple who wants to move about and tour so much that they put a good part of $100,000. into a nice RV (truck drawn travel trailer or bus based "home on wheels" and spend much of their time living in various National Parks and other areas and enjoying that life including perhaps rendezvous with various like minded friends
but most such people need a home base in addition to the vehicle
People over 65 should not have to pay property taxes. Tough when your living off of social security, pension plans and savings. Let the younger generation pay.
I'd say you left out the possibility of high or perhaps extraordinary inflation, which we certainly are seeing right now in real estate, the stock market, and the consumer price index since vaccinations to reduce impact of the pandemic became widespread. Inflation could get worse, maybe much worse, and potentially go on for a much longer time than some current forecasts predict. Whatever you think the odds are of that, having a fixed-rate mortgage payment on your primary residence (along with Prop 13 here in California that limit ours property tax increases to a maximum of 2% per year) is an incredible insurance policy in the event inflation does turn out to be significant or worse.
Agree with all your points. It's so funny that I remember going to Sunday night dinner with my grandmother and now I'm hosting Sunday night dinners. I do want to as they say, 'age in place' but my daughter said that when I fully retire and rely on Medicaid that they will not allow me to have assets? I'm not sure about that but I'm keeping my house and if need be get private insurance.
Medicaid? You should double check she meant Medicaid. That’s for poverty.
Thanks for al the video, totally appreciate every one I’ve seen for me information is very important ,it helps me make choices better.THANK YOU!!
Owning beats Renting is an easy one, if not a two story. Look ahead, plan, we did 1 story bought in 96, in a stable area. When desert landscaping is too hard to take care of, then we'll sell (new roof in 2019, will last 30 yrs, I'll be 85 then & time to downsize, if still kickin'.) Kids bought homes local too. It's all in the planning. Health is the wild card.
Thank you so much for all your very helpful videos packed with useful information. I really appreciate it.
Wouldn't it make sense if you need space for TLC (point 5) to temporarily rent a space for the ones in need than to maintain a larger facility "in case"? There is an old saying "don't build the church based on the Easter crowd". The above space consideration is independent if you rent versus own. You only pay for the space if/when needed versus every month.
I don't really dis-agree with you Mike, but I do think both points of view have a certain validity. Please let me explain with a true story. My wife and I bought our house back in the mid-80s. When we bought it the house was clearly too big for us, but our kids were small and over time we "grew into the house". Now fast forward 30 years to 2014, the mortgage is paid off and the kids are married and out of the nest. Then one evening a drunk who had no business behind the wheel of a car drove his pickup truck into my sons house. Not only did my sons house sustain massive damage, but his son was also killed in the "accident" (in my mind it was no accident, but that's a different story!). My daughter-in-laws family could not take them in for a number of reasons, so my son, his wife and and family moved in with us, and here is where they lived through the months of not only rebuilding their house, but also coming to grips with the loss of their son (my grandson). We didn't buy the house with such an event in mind I promise you, but my wife and I were very thankful that we were able to take them in when they suddenly needed a place to live. I suppose their homeowners insurance might have helped them out, but this just seemed like such a superior solution!
I think when you own your home you have way more flexibility and control of your money then when you rent. Plus if you have no retirement plan other then SS I think owning a property or two to create monthly revenue is a great way to finance retirement, that's what I'm doing. I semi retired at 57 and when I fully retire at 60 ( 1 year away) I will have rental income of $3,200 a month.
Great thought provoking content as usual. Thanks Jeff
I own my house fee simple. At 970 sq ft it is more than enough for me and the cat. It also provide a two bay garage with shop, also 970 sq ft. Mowing the sloping yard is more tiring year-to-year. I would like to live in-city where groceries, medical, library, park and coffee were within walking distance. But condos and co-ops are too expensive, and landlord owned apartments are all but a thing of the past. I had hoped that when the working aged people fled the cities there would be reasonably priced units available for people who see the advantages of city living.
Property taxes in our province are based on value. They are rising far faster than inflation with each five year reevaluation.
Property taxes come to mind. If I were to relocate to a state with high property taxes, I think I might consider renting. Conversely, if I were inclined to get a mac-mansion with a large space for entertaining extended family, I'd check property taxes first.
Very true, all points! Thank you.
No problem
I have an older sister that moved into "Town" when she retired. She owned a large home in a desirable area with property and could not maintain it anymore. I just found out she is now holding a mortgage on this old row house. I was amazed at such a stupid move. Downsizing is fine, but upping your bills? If you are paying a mortgage when retired, it makes no difference if you rent. I and some friends easily live on our SS checks. We did the major repairs a few years before retirement. Imagine paying a mortgage AND paying for a new roof or water pump in the well. Owning a home is the way to go, but do your preplanning. Anything can happen. If the township is planning to run sewage out past your house in a few years and you pay by road frontage, be aware of these things.
Don’t forget the cost of fixing up your home to sell. Packing up all your stuff. When you’re old it’s not easy or fun . Very stressful and exhausting 😮