Renting vs. Owning
Interesting article in the New York Times today, by Susan B. Garland:
From The New York Times:
You’re Retired. Should You Rent or Buy Your Home?
A few quotes from the article:
Other retirees prefer the benefits of renting: fewer maintenance aggravations and the freedom to try out new towns or neighborhoods.
Ms. Hardisty said some of her friends chose to rent because they could easily pull up stakes if they decided to move closer to their children. If she eventually needs assisted living or another type of care housing, she said, she can simply hand over the apartment keys.
Close to 80 percent of people 65 and older own their own homes. But renting appears to be on the rise among older people, according to an analysis of Census Bureau data by RentCafe, an apartment search website. It found that the number of renter households where the primary resident was 60 or older grew 43 percent from 2007 to 2017.
If finances are a factor, retirees should consider the length of time they intend to spend in a new place, experts say. Older buyers may be unable to recoup transaction costs if health or other issues force them to sell early. If you plan to leave within three to five years, buying a house may not be a good investment, and you could lose money. The only way to make money is appreciation in the market, and in some places housing prices might be down when you want to sell. You can get a better return elsewhere.
Another financial issue is an older person’s need for cash flow. A retiree who sells a house, buys a cheaper one and invests the balance of the equity can create a new income stream. In many circumstances, renting could free up even more equity, which is especially valuable for someone with little in retirement savings. Retirees should look at renting as an investment into a lifestyle.
One concern brought up by one of the commenters (and mentioned by others) is worth noting:
Rent control: Protecting folks from unexpected increases in living expenses is reasonable for most older Americans. Entering the world of rental living brings a fixed monthly expense, shields the renter from most maintenance costs and often lowers insurance costs. However, the predictability ends with the lease. Some, but not all, regions can experience significant rental cost fluctuations over the time scale considered (the average 65 year old can expect to live at least 20 years). Relatively few older Americans live in an area with good rent control protections.
Residents of Mirador Astronomy Village must have a large amount of say about whether rental costs go up, and how much, over time. Are there additional protections that can be provided?
Cited in the article...
Housing America’s Older Adults, 2018
Joint Center for Housing Studies, Harvard University
And I received this email from Charles Durrett, Durrett Architects and The Cohousing Company, last week:
A Few Words About Viruses and Cohousing
People who live in cohousing may very well do better during a pandemic than those who don't. They will have community resources, not just individual homes.
While there are no known cases of cohousers coming down with the virus, you can look to your neighbors to help set you up for success. For example, shopping - leaving medicine and food at your door, or perhaps by hosting guests who can talk to you through a window, but stay in the common house. Quarantining at home is very doable under these circumstances, especially when people become even slightly symptomatic, meaning they develop the sniffles, a cold, or even the regular flu. Supplies, support, hosting and much more make cohousing a great solution in difficult times. But the relationships to accomplish all of that are created day to day when times are good.
Across the board, it is an excellent time to stay safe, use an abundance of caution and be alert. We extend good wishes for a quick resolution and rapid vaccine development.
More about cohousing and Mirador in a series of postings to begin later this week!