Wednesday, January 26, 2011

Do I Rent or Own When the Kids Are Gone?

I have been thinking about where I'm going to live when all the children are off on their own. What are my choices? Stay where I am, rent ,or downsize to smaller home. We are presently in a 5 bedroom house that my wife and I have raised 6 children in. We have always been comfortable here. The kids have plenty of room and I have a den where I hide from all of them.

Presently 2 have already left to lead their own lives. Another is renting an apartment at college. Two are living at home while attending college. The last is 10 years old and I don't want her to ever leave.

I want to make the decision as soon as 5 years, but can wait till as much as ten years from now. There are several factors to consider.

Do I need the money from the sale of the house to live on? 

My initial plan before the advent of the real estate crisis was to sell my home for a tidy profit and use the proceeds to create a nice income producing investment. That's down the drain for the foreseeable future. In ten years from now I will still be working so still that's not a problem.

Will I be able to handle all the costs of home ownership? 

The general consensus is a home is a good investment and renting is a waste of money. I have done the math and have figured that if I sold my house today, less all the mortgage payments, taxes, new roof, etc. that I have spent, I am at a net loss. So, when crunching the renting versus buying numbers, make sure to include all the costs. You also may want to factor in possible gains if you had invested the equity in your home in something else.

Do I need the mortgage interest tax deduction? 

There are no clear-cut answers because every one's tax situation is different. I have recently refinanced so I am paying more interest at the beginning of the mortgage term. If your at the middle or end of your mortgage you will be paying less interest thus the deduction will mean less to you.

Do I have the personality for renting? 

I have always been in my own home. Will I or my wife be able to to stand the close quarters that renting gives? We are use to the quiet and privacy of being in a home. I have been in the apartment rental business all my life and have seen the variety of tenants that can drive you crazy. You have to be of a certain temperament to live so close to others.

Some people take great pride in owning a home. They like having a garden and putting their own stamp on the house with custom paint, wallpaper and built-ins, which is something you can't do with a rental. If you're a pet owner, you may have trouble finding a rental that will accommodate Fido.

On the other hand, renting gives you the freedom to pick up and visit your children or grandchildren for a few months between leases and not have to pay the mortgage on a house you're not living in or worry about watering the lawn. Another upside to a rental: If you don't like the neighbors, you can move out once the lease is over.

Additional Posts On Renting:
7 Reasons To Not Buy A House


  1. OK- I think my comment was lost---that is typical for my day today!

    I don't worry about mortgage deductions. I don't pay the bank a dollar so I can get back 40 cents from the government.

    My concerns are:
    Will the rent be so high I cannot afford it when I am old? Should I own something small so I have a place?
    Where will I put my stuff between houses? I don't have much- but I have some precious things I would not put in storage. Storage places get broken into all of the time.
    What will happen if I am 80 and the landlord decides to sell and I have to get out?
    Do I really want to move whenever the landlord decides?

    I have "bag lady" syndrome. That is when a person, no matter how much they save, is afraid of having to live on the street. It is common for my age I am told. You might ask your wife before you think about selling and renting in the future :>)

  2. I know my wife would not be happy renting. We really love our home. We may never leave.

  3. Sounds like you and your wife would be happier owning. Just like my wife and me. We still live in the house that we raised our children (only 4) in, and we will be very happy to live here for the rest of our lives.

    I am assuming that your house will be paid for before you retire. Our is, and it gives us great peace not having any house (or rent) payments.

  4. We love our home and want to stay. I read of a woman who bought her first house at age 77. With a couple of setbacks in my life I have had to refinance. My goal is to have it paid off in 15 years.

  5. Hi Dave,

    My husband and I are in our mid-50's have an empty nest and rent a modest apartment in Denver. We are different, however, we love to be foot-loose and fancy free! We love to pick up at a moments notice to do all the things we love in the outdoors, or even move to a different city is we wish. We never worry about anything around the 'house' because we live in a high-rise which requires absolutely none of our attention.

    However, since we are outdoor enthusiasts, we do own 35 acres and a small home in the mountatins, about 200 miles away. So, we do have our terra firma which we can further develop if, and when we ever decide to grow roots!

    This has been a great compromise for us, in our 'tweener' state!

  6. Well, firstly, how are you getting your kids to move out? That's the kind of advice I'd like to get. Secondly, when the last one moves out, the first thing you should do is invite everybody you know over and have a great big old throw-down. Seriously, five years is a lot longer than you may think, and a lot can happen between now and then, especially in real estate. Even then, the big question may be, do you think of it as a house or as your home? And is that dependent on whether your kids are there?

  7. I already have 2 out the door. I have 2 more that are in college with 2 years to go that are chompin at the bit to leave when college is done. I have a wonderful 10 year old daughter who I don't want to leave. Really I only have one 22 years old that we will have to evict. I really like the home but expense could really be cut if we downsize.


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