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phoggie_gw

Buying or building vs. renting

phoggie
12 years ago

I know I am probably "dreaming" that this house will sell before long, but I would like to have the advice from all of you informed posters.

Since our ages are 70 and 80, do you think it is wiser for us to rent vs. buying/building a house again? My DH won't (and I am not able) to do the yard work anymore ourselves...and same way with snow removal.

One of our friends said they were going to sell and rent. I have always owned my homes and renting seemed like "pouring money down a rat hole", but it does rather seem like a good idea not having to worry about up-keep. If something happens to either of us, we wouldn't have to worry about going through this selling soga again.

What are your thoughts? THANKS!

Comments (37)

  • Billl
    12 years ago

    It is completely up to you. A third option is buying a condo or similar that requires little or no upkeep.

    Renting isn't "pouring money down a rat hole" though. Housing is historically a poor investment. You are paying a premium for lifestyle, comfort and the freedom to do what you want with your own chunk of land. By the time you factor in upkeep costs, taxes, interest etc a house is usually much more expensive then renting. If you don't think you really appreciate "the joys of home ownership" anymore, certainly don't buy a house thinking you are saving money.

    Of course, lots of people find out that they really do like having a single family home and the privacy it provides. Others find they will gladly live with close neighbors if it means freeing up time and money to travel, golf, or whatever. Others never make up their mind and end up longing for whatever one they don't choose. :)

  • mojomom
    12 years ago

    A number of my mother's friends have downsized into patio home communities or town homes. Although these are primarily widows in their 80s now, the communities are mixed ages -- not many young families but lots in early 50s up. They've loved it. Not an evening goes by without an impromptu happy hour in one neighbor's place or another. They've all bought, but the hoa takes care of the landscaping, outside maintenance etc. This might be something to think about.

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  • C Marlin
    12 years ago

    When renting or owning a condo, you are still paying for the upkeep, you can pay for it when owning a house also.

    Consider every option looking carefully at what you really want (and can afford) then make a decision.

    I can't say owning is historically a poor investment, it may be for you in the short run, if you are not happy with your choice, renting gives you ore flexibility.

  • Carol_from_ny
    12 years ago

    Why not hire the yardwork and snow removal to be done and just stay put?

  • kats_meow
    12 years ago

    Renting doesn't relieve you of the obligation to do yard work. It does usually relieve you of the obligation to do home repairs (however, it depends on the lease). We are currently renting (sold our house and plan to build) and it is nice in many ways. It is nice to know that we know what our housing expenses are and we don't have repair expenses. It costs way less than owning a house. Also if we don't like the area it is easy to move when the lease is up (rather than the difficulties with selling a house).

    However, when you rent you give up certain freedoms. You can't just change things you don't like in the house. You may have pet restrictions that you don't like, etc. I like my freedom enough to not like the idea of renting long term.

  • david_cary
    12 years ago

    Buying is always cheaper long term. Do you think landlords are in the business to lose money?

    It is just that people rent smaller and less desirable houses than they buy. That doesn't mean it is cheaper ... ok well it does, but you get less.

  • jane__ny
    12 years ago

    We are in your age range and have been renting for a year and half since selling our house. We couldn't decide what to do and decided to stay in the area and rent. Our lease is up at the end of the month and we are now packing up again. The time seemed to fly!

    We enjoyed the experience and loved the townhouse we rented. If we could afford it, we would buy it but the taxes here are prohibitive. I don't feel we lost money, it gave us time to think about what we wanted to do and we didn't have the headaches related to home ownership.

    I would suggest that you rent for a year to sort out your decision. It is a hassle to move and move again, but I'm finding with each move, we are discarding more and more of our 'stuff.'

    Good luck,
    Jane

  • sweet_tea
    12 years ago

    Major downfall with renting is the lease is typically one year. After that, the landlord can decide to sell the place and tells you the lease is up and time to move. He wants to sell it vacant. Then you need to find a new place, then move...usually within 30 or 60 days.

    Or, landlord might decide to sell the place while you have 4 more months on your lease. Landlord can have realtor show the home to prospective buyers while you live there. They do need to give you proper notice (usually 24 hrs), but they can come in and look inside. Then you might have to move after lease is up if new owner doesn't want it as a rental. or maybe new owner wants it as a rental but increases rent by 20% once lease is up. You have to either pay it or move.

    Lastly, privacy. I rented a home one time and the landlord was coming inside with the key when we were not home, without telling us he was coming. He did it at least 5 times. Creeped us out. It was against the law what he did (the can only come in unannounced if given permission by you, or if emergency or abandoned home, etc), but he didn't think the rules applied to him or he didn't know the rules. We moved when lease was up. In the end, he didn't give the security deposit back and should have, as the place was spotless. Had to start legal motions before he returned it.

    fyi- for a single family home, landlords typically do not provide lawn service or snow removal. But there are exceptions. There are often state laws that identify what types of property where landlord must provide snow and lawn svc-usually multifamily.

  • nancylouise5me
    12 years ago

    At your ages why would you even consider building again?! I would not want the stress or time delays associated with it. You would be in the same situation that you are in now. You would have a new home but the same problems, just a different location. I'd cross building off your list. I would probably look into a town home or condo complex where mowing/snow shoveling, etc. are done for you. Find an area that appeals to you and has the things you and your husband like doing (In-city for dinning, movies, museums or beach/lake area for water fun). Rent for a bit, if you like it then find something to buy. NancyLouise

  • chisue
    12 years ago

    You can buy into senior housing or rent it, or just rent an apartment. (I've seen ads for senior housing that say they will help you sell your home -- don't know how THAT works.) If you can't sell your present home, you can rent it out and pay to rent in the town where you WANT to live.

    DH and I are Seniors. We built our current 2900 sq ft one-floor home ten years ago and hope to stay in it another ten years. We like the privacy and prefer to make our own decisions about what needs doing, when, and who we will hire to do it. (You're still paying for services in any 'maintenance free' home; it's just that others decide those things for you.)

    We also own a vacation rental condo on Maui that we use 4-6 weeks in winter. That's been our lesson on condo living, where a volunteer board makes decisions. Like most volunteer boards, the members know more about 'little things' than they do about major issues. There's lots of discussion about plantings and not enough on whether the insurance bids are favorable, etc. A good amount of money is spent on management fees because the board members can't/don't want to tackle real issues unassisted. There's what I term the Doddering Factor: Senior residents have plenty of free time to 'devote' the complex.

    I'd add a caution about buy-in senior residences where you are promised nursing care "when the time comes". Few buyers carefully examine the quality of that care, although they are paying over-market for the apartment to get the care. There's a natural aversion to thinking about that stage of life. Few have the medical knowlege to know what quality care is. People have unrealistic fears of how long anyone able to afford these places actually requires nursing care. Paying the home contract fees may mean you can't afford good care if the home's care is substandard when you need it.

    There are some fine establishments, but the incentive is there to profit by selling 'housing w/care', then moving people through the system and out the door -- and re-selling the package. (Don't count on any departments of government to police this.)

    Stepping down from THAT soapbox, I think you and your DH would be nuts to build a big house again. Sorry to be so blunt, but as I recall you were designing another elaborate house. Could you both participate on these forums as a hobby instead of building? (Example: Me. lol)

  • phoggie
    Original Author
    12 years ago

    chisue~~ You have certainly provided a lot of good information about the Sr. Housing Projects... Any Senior can use your experience to avoid making misakes.

    So for my next idea.....buy a much smaller (1500SF or so) ready built home (even if it does not have everything we "want", but certainly all of our "needs") in the same little town that I long to live in, sell my beautiful lot there to my son and his new bride and let them build on it, and I'll be able to go sit on their deck and look at "my lake". How does that sound?

    No moving twice...no storing furniture...no stress of building...half of the taxes...and being able to live in a house that is much more affordable and manageable, should one of us die (and at our ages, that might not be long).
    So right now I am looking at their web-sites, but houses there sell quickly and hold their values...so by the time this sells, they might be gone.

    Right now I pay to have that lot mowed and HOA fees, so I am sure the same man will come mow at a different address...that little town only has 3,000 people, so I surely can find someone to do lawn care/snow removal.

  • caulk_king
    12 years ago

    I like the idea of buying a much smaller, existing home. My DH & I bought a very small lake house a few years ago with retirement in mind. We spent weekends for a couple of years working on making it comfortable - not fancy - just comfortable, assuming it would be 10-15 years before we moved there full time and that by that time, it would be ready for another remodel. Our plans changed & we're there full time now. It's not everything we thought we HAD to have, no high end surfaces or big, SS appliances like we've always had, etc. I know we would have spent so much more if we'd known we'd be there sooner, but, we are incredibly happy with it. We have everything we need, in a beautiful place & it's all paid for!

    I like your new plan & hope you can get to where you want to be soon. It's not everybody's "bag", but there's a lot to be said for living simply.

  • marie_ndcal
    12 years ago

    We have alot of assistant living places here and they are very good. Some are bigger and more amenities than others but many of my friends live in them and really like it.

  • phoggie
    Original Author
    12 years ago

    marie-ndcal~~ It is not "assisted living" housing that we are wanting. Sr. citizen complexes that we are going to look at are 2-3 bedroom houses or duplexes that have lawn and snow services....but they are for over 55 only. Some you have to buy the housing and some you can rent.

  • chisue
    12 years ago

    I don't think you can control *all* of the plan you outlined.

    I'd put the lot up for sale, leaving your family members out of that loop. (Newlywed Sue wouldn't want her MIL occupying her deck anyway. lol)

    Buying the small existing home IS a good idea; can you do it with lot proceeds? Can you move to that house and rent your present home until the market bobs back up...eventually? Or, can you cut your losses and price that house to sell NOW?

  • kaismom
    12 years ago

    renting versus buying in a particular community is dependent on the local real estate market. in some markets, you get WAY more house if you rent versus buying (with the same amount of monthly cost). These are also markets where someone that does not know what he/she is doing will NOT make money as a landlord. (someone said that the landlord is in it to make money) This is true for the city that I live in. Most landlords will make money as a landlord by buying somewhat distressed property and putting some $ into it to make it rentable....

    Personally, at your age, i would rent. One of the things that we owe our children is the simplicity of the will and estate after we pass on, IMHO. The less "things" we own, the simpler it is for them, unless we are leaving them megabucks. It is much easier to move out of the rental property when I am gone than trying to sell the house I died in.... Somewhat morbid thought but a practical thought in my book.

    Most large home do not rent and break even because there are not many renters that want to pay the premium for a nice home. Additionally, the wear and tear from the renters often cause significant depreciation on your property if you want to sell later: ie interior painting, carpet replacement etc....

  • jakkom
    12 years ago

    It's an intensely personal decision, isn't it?

    I'm 60 and DH is 58. We live in a small cottage in a great location (San Francisco Bay Area) but it's just not cost-effective to remodel it for universal access.

    We've already started checking out various types of senior facilities, as my 84-yr old MIL with dementia is living with us, who will eventually need care of some sort.

    There are both for-profit and non-profit CCRCs (what chisue is referring to). There was an interesting article recently in the NYTimes' wonderful The New Old Age Blog which discussed how to determine whether assisted living or nursing care was the best option.

    One piece of information in this article was a real eye-opener: the average length of stay in assisted living is only two years. The elderly continue to decline, and the care needed becomes too intensive for assisted living facilities.

    After we eventually sell this home - the scenario being either one of us dies/becomes seriously disabled, or I just get tired of taking care of the place, LOL - DH and I plan to either rent (independent living; we have LTC policies with home healthcare riders) or buy into a specific non-profit CCRC we have our eye on. The latter is a terrific place with amazing facilities at all three levels (independent/assisted/facility care). It is expensive, however, so not an option for those without sufficient liquidity.

  • brickeyee
    12 years ago

    "Do you think landlords are in the business to lose money?"

    I very much enjoy having the tenants cover the cost of my investments.

    It would be easier if it was stocks though (no upkeep or maintenance issues).

  • Cindy1961
    12 years ago

    How can renting be cheaper than buying? Then every landlord would lose money. Yes, I agree that being a decent landlord isn't often the most lucrative business, which is why most landlords I know have another full time job or else they have a S/O who has a good job. Or, both. The few I know who are full time landlords own multiple properties.

    But, no one is going to rent property if it will cost them more money. And, as almost any landlord will tell you, most tenants will NOT care for the place like an owner will. Having been a tenant all of my adult life, I can verify that too. No, we don't punch holes in the walls or throw wild parties, but we also don't report things to the landlord as we should, because we're tired of the, "Oh what did you guys do NOW?" attitude. No, we do not go around forcing the toilet to leak. Or banging on faucets. Or forcing electrical wiring to stop working. These things happen, but when it's greeted with the attitude of "Well, you must have done SOMETHING!" the urge to report it gets rather dim.

    And even with that issue, our landlord now, never raised our rent in the 20 years we've lived here. We've also never had a lease, always 30 days tenant at will, so we must be pretty decent tenants, even if the landlord does suspect we break things in our spare time. So, that tells me that she was making enough money with our rent twenty years ago, that she hasn't felt the need to raise our rent. And I know our landlord, she's not going to spend more money than she's bringing in, she's not stupid. She might be willing to have us on a break even scale and expect other tenants to make a profit, but she knows that if she needed to raise the price of rent, we would have paid it. I even TOLD her several times that if she needed to raise the rent, don't let it get to the point where she was losing money, to talk to us and we'd work out a fair rent ASAP.

    Given all that, I can't imagine that renting is cheaper than owning. Yes, there are taxes and upkeep when you own, but even if you rent, someone is paying those bills and it's someone who's out to make a profit.

  • feedingfrenzy
    12 years ago

    Most rents rise over the years, but if you have a fixed rate mortgge, the house payment stays the same. That's really the big advantge of buying over renting, especially when inflation rates are high.

    However, the OP and spouse are in an age range where this advantage largely disappears. I would say that they shouldn't focus the decision on buying vs renting per se, but on the appeal of the various properties that are for sale and for rent. If they find an especially appealing place in their price range, then go for it, whether it be a rental or a sale.

  • LoveInTheHouse
    12 years ago

    Renting is definitely more expensive otherwise landlords wouldn't do it. My parents downsized from the modest family home that they owned for a long time. They bought a used single wide in a trailer park. You rent the lot. They put their equity in the bank with the idea that they would live on that in their old age. In around five years, their rent on the lot was double what their home costs were. Then my mother got leukemia. Even though they had insurance, there was so much it didn't cover that it wiped out most of the savings they were going to live on in their old age. When my mother was too sick to get up and down the stairs, the landlord of the trailer park didn't like the ramp my brother designed and they made them take it down. While my mother was dying, they had to go through this kind of aggravation. The landlord was mean and rotten and did many mean things like that, too much to go into. Trust me, he was bad. After my mother died, my father tried to sell the trailer but the landlord wouldn't approve any of his buyers to rent the lot. Kind of like how the banks won't give mortgages. My father abandoned the trailer to them and the landlord rented it to someone the following month. My father moved to a two-room senior citizen apartment. His rent is also more than their home costs were and he hates the place. Feels like it's his last stop before dying. Wishes they never would have left the family home. For what he pays in rent, he could have afforded someone to take care of the yard, etc. And the rent goes up every year but his income stays the same.

    Phoggie, downsize and buy a modest, existing home. Think about what you really need and keep it simple. Pay someone to help you take care of it with what you will save by downsizing. Calculate that into your monthly costs as if it's part of the rent or mortgage. That's what I would do.

  • phoggie
    Original Author
    12 years ago

    I just got back to reading these follow-up posts.
    Love, as usual I think you have given my sound advice..and that is exactly what I hope to do. Right now there are three "may-bes" in the little town I would like live...but as you know, selling this house (and by myself now) is a problem.
    You are always so full of good advice...and I love to read your posts :-)

  • evaf555
    12 years ago

    I know of a few folks who have lived to regret moving into a trailer park and renting the lot. In one mobile home park in our state, rent went up astronomically in just a few years. In another case (my parents) the trailer park was sold to a developer who wanted to build condos or homes. So all those people who owned trailers were kind of out of luck. It's hard or impossible to relocate one of those units once they are past a certain age.

    In theory, owning a home is cheaper than renting. In practice, once a person owns a house, he will likely purchase more furniture/possessions to fill it up, and there are increased utility and heating and cooling bills as well. There is also the maintenance to consider. If you can't do it yourself, you must pay someone to do it, or your property will go down in value as the neglect becomes obvious. There is also insurance, and taxes. Of course those are rolled into one's rent, as well. With rent, though, getting those payments in on time is someone else's responsibility. (And this observation is coming from someone who made a special trip to the town hall last August to avoid having her credit dunned.) Property, as homeowners have discovered in the last few years, doesn't always steadily increase in value. I have seen nice, well-intentioned people not understand these ideas - "A mortgage is cheaper than rent" is a common refrain, but it's just not that simple.

    Late Husband and I moved in 2002 just because we wanted to be closer to our jobs. The neighborhood we moved from has gone down in appeal and value since we left. In addition, we both had serious employment changes that reduced our income. We were very happy to be living closer to the city where we worked. We weren't sophisticated enough to see it coming, it was just dumb luck. Late Husband considered rehabbing a home as a hobby. But it's not a cheap one, even if you do it yourself.

    Renting an apartment, if it meets one's needs, can indeed be cheaper than home ownership, given the above. That doesn't mean someone has to do it, but it can work that way. An acquaintance of mine went through the process of giving up her condo to move back into an apartment, because it was cheaper. (There is the concept of "economy of scale") Yes, your landlord is in business to make money. So is the local hardware store, home improvement center, the appliance store, the oil company, and probably...you.

    I love the privacy of owning a home. The first week we had our first home, we needed to clear a path through the demolition debris at bedtime. We swept first and then I got out the vacuum. My next thought was, "Wait, I can't vacuum at eleven p.m. I'll wake the downstairs neighbors." But no, we no longer had any.

    I'll miss this house and the memories of my husband and I working on it, if and when I have to move. I'm realistic though, that my expenses could very well go down if I do.

  • SaltiDawg
    12 years ago

    "Housing is historically a poor investment."

    Really? lol

  • jakkom
    12 years ago

    >>"Housing is historically a poor investment." >>

    True, it is. The huge run-up in the '90's in both the RE and stock market were blips in the overall ROI, when looked at long-term. I've seen estimates that over the last sixty years, the annual ROI on RE averages less than 2%.

    Now, that does not mean it isn't a good investment at all. 2%/yr looks great against the S&P's 'lost decade'. And there are many who were fortunate to buy at the right and time and more importantly, SELL at the right time. This is true whether you are talking about RE **or** stocks.

    But there are also many who bought at the wrong time and are stuck with being unable to sell at a profit, not only today but likely for several years to come. For them, the fact that their 'dream home' is 50% less than it would have been in 2007 is still a pipe-dream purchase: with their current home having lost 35% of its value and their portfolio down by an equal amount, they are unable to qualify for its purchase. It is just as far out of reach as ever.

    Everyone has to weigh their own unique set of circumstances when it comes to deciding where to live. If you are active, energetic, emotionally invested in the local social community (family and/or friends), then it would make sense to downsize to a small SFH, especially if it is universal-access modifiable.

    But this will not work for everyone. DH and I are younger than phoggie, but we have no interest in maintaining a SFH forever. Our house is not handicap-accessible, as I learned when I broke my leg in a compound fracture at the still-young age of 54. Wasn't much fun sleeping on the LR sofa for four months, believe me!

    So we plan to sell when we can't/don't want to take care of this house any longer, and either rent or move to a CCRC. For us it makes much more sense both financially and physically; we enjoyed being renters for several decades before we bought our first and only home.

    The issue of rent vs buy is very dependent upon the area you live in. There is no clear winner; in some areas renting is more affordable than buying; while in others, the opposite will be true.

    One financial expert has his own reasons for preferring renting, at the link below:

    Here is a link that might be useful: Rent or buy?

  • SaltiDawg
    12 years ago

    "I've seen estimates that over the last sixty years, the annual ROI on RE averages less than 2%."

    Incredible!

    First of all, I am suspect of the 2%.

    Second of all, the 2% is applied to the TOTAL VALUE of the home, not to your invested money. Put 20% down and the 2% on total value results in approximately a 10% Return On Investment (ROI.)

    I am a retired Navy Submariner that typically was transferred (relocated) every 3-4 years. With one exception, I sold and bought a home each time. I always re-invested the sales proceeds in the new purchase except for a few thousand to cover moving expenses not covered by the Navy.

    I bought my first home in 1969 and NOT ONE TIME did I end up selling for less than I had paid. My ROI was considerably over 2% and I did not get to pick and chose when to buy and sell.

    A separate discussion might be (again) had on tax advantages and other issues that might also sway one to consider home ownership as an excellent investment IN THE LONG TERM based on historical performance.

  • evaf555
    12 years ago

    I don't now,and never have, looked at a house as an investment. If I sell it, I have to live somewhere, still.

    My investments are my investments.

  • SaltiDawg
    12 years ago

    "I don't now,and never have, looked at a house as an investment. If I sell it, I have to live somewhere, still. "

    It is great that you have been able to adopt this perspective.

    I can assure you that if you were required to sell and buy anew every 3-4 years that you would not make it in the long run with that approach.

  • brickeyee
    12 years ago

    "It was against the law what he did (the can only come in unannounced if given permission by you, or if emergency or abandoned home, etc)"

    It might be "against the law" om some place, but in most places it is just a violation of the rental contract.

    A civil action, but not a criminal action.

    You could sue, but what damages can you show?

    You could try to get the lease canceled since he violated the terms, but now you need another place to live.
    Do you really want to talk with them about a new lease?

    If you did try to press a trespassing charge (and could get the DA to prosecute it) you are liable to have a very rough lease period.

    Depending on local conditions it can be cheaper to rent than own (but rarely for very long"

    The market of rental properties will contract and rents will increase.

    The landlord may actually be losing money if they are paying a mortgage that is not many years old (and thus based on a likely lower purchase price).

    do not be foled about manintenace expenses (both for repairs ad yard wrk).

    if you are in a large building both are include din the cost of the lease.
    The 'yard work' charges may be smaller when shared over multiple units, but you are still paying a share of them.

    In a single family rental you are often required to do 'yard work' type things (shovel snow, mow the lawn, rake the leaves) and the maintenance costs are included in the lease.

    We had a young female tenant once that did not want to mow the lawn.
    We told her of course this could be arranged, but the rent had to be increased.
    She returned to mowing the lawn, raking the leaves, and shoveling the snow.

  • evaf555
    12 years ago

    *Required* to buy a home?

    In what world?

  • brickeyee
    12 years ago

    "I don't now,and never have, looked at a house as an investment. If I sell it, I have to live somewhere, still. "

    I do not have a goal of making money with my principal residence, but would prefer it not decline (especially form actions I took or failed to take).

    While your principal residence is your home, I own more than a few houses as money making investments.

    I have tenants that pay all the carrying expenses (PITI & maintenance), and a little more every month.

    As soon as you factor in depreciation and the leverage used to purchase the property the cash flow can be positive and you make money.
    While some needs to be set aside for contingencies, after that account is full it is profit.

    I do not view my principal residence the same way.
    I maintain it so its value does not decline, and add improvements that I want to have.

    They have nothing to do with future sale value, and I have even removed some before sale (chandeliers, high end stoves, hoods that go with the stoves, etc.).

  • jakkom
    12 years ago

    It's nice that saltidawg has never lost money on a house, but a quick scan of any RE-related Internet forums over the last four years will bring up numerous posts of people who HAVE lost money - a great deal of it, in fact.

    My nephew and his wife are currently planning to move to Boston, MA from Northern CA, due to his job. They will suffer about a $250K "bath" on the sale of their home, well-maintained and in an excellent school area.

    Some people do very well on RE. Others do not. There is risk involved in EVERY financial purchase, no matter what it is. Sometimes your luck is good, and sometimes...it isn't.

  • brickeyee
    12 years ago

    Unless you are forced to sell (like jobs disappearing) you just wait out the market.

    Unless you purchased at the absolute height of the bubble in an area with values that crashed badly it should not take all that long.

    I have renovated houses and had the market stall for years (five years once) and I had to rent them out and wait.

    I would have prefer not to be a landlord at that time, but it was better than losing money on the places.

    I have never actually lost money on a personal residence or investment property in over 35 years of buying and selling.
    I did not make any money on a personal residence once, but that was due to less than an 18 month ownership and a major relocation (on both ends).

  • jakkom
    12 years ago

    As one gets older, one cannot assume there is always going to be time to "wait out" a market turndown. The OP's husband did not recover, and not all widows can or should be expected to wait for a return to 'normal' market conditions, whatever that might be.

    We bought our house from two elderly sisters who could no longer take care of it properly. They were lucky they sold just before a previous (1990) market downturn; if not they would have had 35% less profit than they did make from us, and that money all went towards their nursing home care.

    RE is an excellent investment for many reasons, but it is also only part of an overall net worth. As a portfolio allocation it is similar to a bond, and is not as easily liquidated as other types of assets.

    No one investment is suitable for everyone, and no one should have all their assets in a single financial sector. Now, the asset mix can and should vary, but what may be good (e.g., have worked out well) for some folks cannot be assumed to be good for everyone.

    I will repeat - buying vs renting is very much locally influenced, and an individual decision. What is going to work for me, may not work for you, because your exact circumstances aren't known on an anonymous Web forum.

  • brickeyee
    12 years ago

    "As one gets older, one cannot assume there is always going to be time to "wait out" a market turndown. "

    The your heirs can wait.

    The only reason to lose money is normally from forced sales.

    The "elderly sisters" failed to diversify their savings, and carried a lot of risk.

    They got lucky. Plain and simple.

    Luck is NOT a good thing to rely on in any business activity.

    They probably never thought of their house as 'business' or even an investment, but they sure treated it as one.

  • evaf555
    12 years ago

    Of course, brickeyee, I meant I did not look at my principle residence as an investment. Real estate can be a great investment, for someone with an aptitude and interest in real estate.

    I guess in the end, that's what I meant to get to as my point. Not everyone has the aptitude or interest. Convincing people who are really ambivalent about owning a home to go ahead and do it anyway because it's the *only* way to get ahead financially is ludicrous.

  • brickeyee
    12 years ago

    It is a lot of work.

    Until you have a decent number of properties with a solid positive cash flow it is often 'in the mud' often dirty work.

    I still often personally do cleaning between tenants.
    Even if a I hire some workers, I still am present to personally supervise.

    I do have a few folks (that I pay well) I use occasionally when I have only a single night to prep for a new tenant.
    It eats into profit, but has to be weighed against the cost of having a vacancy for a longer time.

    Many years ago I might have needed as much as a week to clean and paint between tenants, on top of a 'regular' daytime job.

    One of the things on the TV shows that is simply unrealistic is being able to hire every bit of work out.
    Owning investment properties is a hands on thing if you do not want to watch all the profits chewed up by routine things (at least when you are getting started).

    While there are some things you can be forced to hire out if you do not have licenses, there are plenty of others you will need to do yourself.
    Cleaning, painting, and general maintenance (inside and out) are some of them.