Cheaper to Rent Vs. Own in Retirement? How recent conditions are suggesting renting may be better.

[@keithdelaere4625]

Me and my wife are 60. The other issue is of deducting the mortgage interest vs standard deduction. I had not been able to write off my mortgage for several years…so that helped us also decide to sell last year and rent. Cash out the equity and Invested the equity in CDs, Money Markets, etc. renting is saving us so much money each month! Best decision we’ve made

[@waterbug1135]

The mortgage interest deduction is nice, but isn't exactly a huge amount of cash. Let's say you paid $20k in mortgage interest and were in the 22% tax bracket you'd get back $4400. Also the standard deduction is $29,200 for joint married. So unless you had a lot of other itemized deductions it wouldn't even make sense to itemize to claim the mortgage interest deduction. Average home appreciation over the past 23 years has been 3.7%. Not sure CDs, MM have done better than that over those years. But let's say they have. You also would not have paid rent when owning. That increases your return up to the 8-10% level. No way CDs, MM, etc... beats that. Not sure your reason for being happy renting, but the it can't be the numbers. Many other reasons to rent so I assume you have those.

[@Beadgcfb]

There's a season for everything. We're renovating our home pre-retirement so that it's as accessible and safe as possible to age in place in until we can't any longer. At that point perhaps renting will be right, and likely involve some sort of assisted living or whatever. I'd hope the proceeds from the sale of the house would help fund it.

[@waterbug1135]

I'm 67, healthy, but planning for the future too. I retired 22 years ago funded mostly by slow flipping my house. Working on house #4 to sell next year. Then I'll take the $530k from that sale and move to SE Asia. The cash will give me about $2000/mo @ 5% which is plenty for SE Asia. The cash will also act as my medical insurance fund which should be more than enough to pay for any issues. At 70 I'll take SS which is estimated at $3800 today. In SE Asia I can hire a live-in housekeeper who does everything and even some elder care for $75-200/mo USD plus food. A live-in fully trained caregiver is $500-1000/mo. That's way better care than I can get in the US at almost any price.

[@steves3234]

Good move I did the same prep. New roof and new heat pump. So all.the expensive stuff is new

[@JaneSlivik-ln1ho]

Thanks Dan &Tony. Good topic.

[@camobley3547]

I have this dilemma. My husband died last Nov and I am disabled. My doctor says I cannot continue to live alone. I have a fourplex but need a single story. Only my daughter and I live in the property because I don't want to deal with tenants. I am in the generation that believes home ownership is the proper social thing. I am 79 yrs old and I have considerable equity in the property. I am afraid of renting because an owner may want to sell and I would have to move when even older. Renting offers no guarantee of long term stability. Good advice, Thank you

[@eduardogonzalez738]

I’m 62 married and a daughter at home. I’m finally eligible for SS at $2000 at month. 2 million in equity on my house and no money saved, just been living without saving. Just assumed I will sell home and retire. It’s crazy , but I’m terrified to make the plunge into retirement. Internet is kinda overwhelming with different scenarios and opinions

[@Dolphinfinancialgroupfl]

@@eduardogonzalez738 it's great to be thinking ahead. Your home equity situation is very common. This discussion on using home equity in retirement might be helpful: kzbin.info/www/bejne/pXSXm5mJq55-fqcsi=rn01ookUTp7LXTO1

[@hcp0scratch]

The very refreshing to have this side of the story told . Perhaps, however, the brief explanation of the concepts of rent and invest the difference as well as opportunity cost would have been more effective in making your point. The discussion was a bit meandering, but overall helpful so thank you!

[@Dolphinfinancialgroupfl]

We appreciate the feedback. Dan likes to talk and have fun with the podcast, so it sometimes draws out a bit longer than a "just the facts" version would.

[@davidfolts5893]

A housing bubble, indeed, caused by the unintended consequences of prolonged low interest rates by the Fed, low new home construction since the 2008 housing crisis, and a significant imbalance in the supply and demand curve-well, this is another fine mess we've gotten ourselves in, Ollie. Thanks for the vid, Dolphin Financial Group!

[@waterbug1135]

Ah, the housing bubble. People have been saying that since 2018. Still waiting. The thing about bubbles is they can only happen when almost everyone doesn't think there is a bubble. Bubbles can only form when many people pile in thinking they can't lose. But for years social media has been flooded with people saying there's a bubble. Buying has been pretty weak. Even during the 2020-22 run up the buyer volume wasn't actually very high. Low new home construction causes a supply shortage. That's the opposite of a bubble. Home builders are wary of a bubble forming and have limited building. Low supply normally leads to higher prices but not a crash. Lead up to 2008 a lot of new homes were built which fed speculation. Lot's of homes sitting empty, extremely loose lending. Today rents are very good for investors and lending has been much tighter.

[@threeftr3349]

@@waterbug1135 My mortgage has been lower than rent for at least a decade. With a mortgage with paying taxes and insurance, it's all most even with a rental for a house, and many apts. Not everyone has yearly natural disasters, or high insurance rates.

[@enigmathegrayman2953]

I’m 48 years old and I’ll be renting whether I want to or not! I just aggressively save for retirement and hope my little pension that I’ll receive helps me pay my expenses.

[@waterbug1135]

A person can be both a renter and owner at the same time. Owners complain about repairs and maintenance. OK, so do what many landlords do and hire a property management company. Got a problem? Call the property manager. If you've maintained your property and have insurance there shouldn't be any major surprises. Renters pay for all these expenses plus the landlord's profit. Yes there can be some unusual cases. But take the recent hurricanes. Say you like living near the FL coast and you're renting and there's a lot of damage to your home. Cool, landlord's problem. Now where do you live? You go looking for a new place to rent along with 100's of other renters in the same boat. Same rent or higher now? Looking forward a year or two and all these landlords have suffered repair costs and lost rent and now insurance costs go up even more... what's rents going to be? Landlords aren't in this to lose money. They will ask for rents to cover all that. If there aren't enough renters willing and able to pay the landlords will sell. Maybe prices will make ownership look more attractive, too early to tell.

[@4403323]

Landlords don't always fix the problem in a timely manner. The renters ends up suffering as a result.

[@bk4of4]

It was a good show

[@andre1987eph]

My rent controlled LA apartment is cheaoer than what people in my area pay for property tax.

[@jonheredia8789]

Never cared about what people think.,have always done well renting.... just better piece of mind renting

[@steves3234]

My house was paid off years ago. My property tax is only 1200 a year I wil not say where I don't want liberals cimming 😅 Before I retired I replaced my roof and heat pump. So in good shape for thianto be good start for retirement. In the next 5 years I will need a water heater but that is only 3k. I am happy I own.