own or rent in retirement?
Toronto Veterinarian
2 years ago
last modified: 2 years ago
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eld6161
2 years agoElmer J Fudd
2 years agoRelated Discussions
fyi: MSNBC article; rent vs own
Comments (19)"You might do better living in these areas:" Why, because places where there have been rapid increases in valuations are less likely to have rapid descents? Here's a quick clip from a recent Business Week article: While a 25% decline is unprecedented in modern times, some economists are beginning to talk about it. "We now see potential for another 25% to 30% downside over the next two years," says David A. Rosenberg, North American economist for Merrill Lynch (MER), who until recently had expected a much smaller slide. Shocking though it might seem, a decline of 25% from here would merely reverse the market's spectacular appreciation during the boom. It would put the national price level right back on its long-term growth trend line, a surprisingly modest 0.4% a year after inflation. There's a recent model for this kind of return to normalcy after the bursting of a financial bubble. The stock market decline that began in 2000 erased most of the gains of the boom of the second half of the 1990s, leaving investors with ordinary-sized returns. I just noticed that Business Week has the Feb 11th issue titled "Housing Meltdown". I think I'm going to go pick up a copy....See Morerent vs. own- question related to disabled brother
Comments (12)Drcindy, My SIL is facing a similar situation. Her brother is in his 40's and lives with their father (now in his late 70's)in another state. Tim is autistic enough to be a bit isolated socially, a poor judge of character, and financially naieve. He is highly functional at work and is considered a brilliant mechanic. He makes a nice living. He's able to take care of the basics...dressing, cooking, shopping, driving, paying bills and the like. We put together a family plan for him for that moment when his father dies or is too ill to live independently. Tim was involved in every stage of our discussion and planning. We will sell the house and buy him a condo with the proceeds. We prefer renting to buying because,no matter what, he'll always have a home and, hopefully, an asset that can work for him as he ages. We're not too worried about the homeowner maintenance problems because those exterior things like roofs, elevators, landscaping etc are taken care of the the HOA. He will have to replace appliances as they fail but we feel he can handle those purchases with a little long-distance help from us. We didn't want him to be frustrated by the slow service that rental maintenance often provides. We have targeted buildings in Florida (where he lives) and Virginia (where we live) that have 24/7 front desk staff and inhouse maintenance. Yes, they have more expensive condo fees but we feel that having a socially active HOA, a staff he can get to know, and a staff engineer for in-condo repairs will provide a sense of community for him. It also provides us points of contact that we can get to know. Finally, my SIL will have a durable financial power of attorney to conduct complex financial matters on his behalf. That ensures part of his paycheck will go to his retirement, part to savings, taxes paid, insurance kept current etc. She'll be able to help him work through the financial details of his life. We have set up a small trust for the money he inherited from his mother and any future large sums that come his way. My SIL is his trustee. She's been preparing for this a long time and as her family, Tim's our family so we're grateful they let us help. Good Luck...See MoreOwn or Rent for a single woman retiree?
Comments (41)HOA fees can be fairly predictable, they usually don't take huge jumps. We have an HOA on the lot we bought and there is a limit to the increase. It should be published somewhere. I think it is a consideration but I wouldn't think it is a vast swing one way or the other. Full disclosure - I am not retired, but I believe that most people go through several phases of homes - The starter home, the family home, and the retirement home and each of those phases are a departure from the things we wanted/needed before. It really all depends on what you want. My mind always goes to the financial perspective when thinking about these things. If you find a community that you like, there is nothing wrong with doing things for non financial reasons. There is no point in having a little more money if you are not going to use it to be happy. From a financial perspective there is no real difference. Rarely have interest rates been good enough to see a spread once you are retired and have a low risk appetite, but they are now. I personally prefer a small single family house, my grandmother turned 94 in a small "shotgun" house. There are some good Christmas memories as we packed a lot of people into that tiny house. I have lived in condos and townhomes, they don't seem the same to me. But that is just me....See MoreRent-to-Own from Parents-in-Law
Comments (21)Your in-laws are good business people. They kept their son close by and made a regular income at the same time. Many of these lease-to-own setups are based on the fact that the lessee will abandon the lease. With your plans, that is what is about to happen. If your son had simply purchased the land and house outright and wanted to sell it later, your in-laws would have potentially had unwanted neighbors and lost control of land nearby them. With this arrangement, they have good neighbors and still own the land. They made a good deal. Your in-laws also taught their son responsibility, business and the value of making payments. He didn't just live there for free. They could have rented this house out to someone else and made money on it. Instead, they gave their son the opportunity to buy it. What they didn't plan on was the appearance of a daughter-in-law. Or, the demands of their son's growing family. The house is inadequate for the growing family's needs. Have your husband examine the lease-to-purchase agreement. He should consult with an attorney three counties away. See if it prohibits his renting out the house. If it doesn't prohibit this, he can sub-lease it out to his brother and not lose his equity. Or, he can become a landlord himself and sub-lease it to someone else. Another option is pay off the lease-to-own early by refinancing with a third party. You can go to a lender and get a loan for the land and house. Then, you are free and clear of the in-laws and can do whatever you want with the house and seven acres. You can rent it, renovate, expand or build on it. There is more than one way to skin a cat. But, you want to move very carefully. These are long-term relationships and money is involved. You are the intruder in this dynamic. You bring a different set of values. Your in-laws obviously aren't stupid. They own the property. They expect to be paid or they will get their other son to pay. If the other other son doesn't pay, they will rent it to strangers. It's just business. In any case, they will keep their money. It's not your money. You need to think about this long-term. Ultimately, walking away and keeping silent may prove to be the best course of action for long-term family harmony....See Morenicole___
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