The article posted in CNBC by Kayleigh Kulp answers the question, should seniors rent or buy? Learn more below:
The big decision when you retire: Should you rent or buy?
Published 11:01 AM ET Sun, 1 Oct 2017 Updated 1 Hour AgoCNBC.com
Robyn Mancell sold her Southern California, four bedroom home four years ago when her youngest child left. She moved to a cheaper, one bedroom apartment nearby.
"There was a lot of upkeep," the 58-year-old said of her former place.
As some empty nesters and retirees decide to downsize, giving up a mortgage for a rental may be attractive, depending on where they live and their other income streams, financial and real estate experts say.
About half of seniors surveyed by Credit Sesame, a credit and loan management site, said affordability is the top reason they aren't buying homes.
Retirees 65 and over in markets like Providence, Rhode Island, Kahului and Honolulu, Hawaii, Lancaster, Pennsylvania, New Haven, Springfield, Massachussetts and Reno rent at a rate 1.2 times more than the national average, according to data compiled by realtor.com.
On the other hand, retirees own at 1.1 times the national average in markets like The Villages, Punta Gorda, Sarasota and Vero Beach, Florida, Prescott, Arizona, and Santa Fe, despite it being also cheaper to rent there, according to the realtor.com data.
A good time to transition to becoming a tenant may be when you move your retirement accounts from growth funds to safer, income generating funds, often around age 65, said William Flood, a real estate investor analyst with FitSmallBusiness.com.
"That's when buildup of real estate equity is no longer as much of a concern as how monthly carrying costs fit into a fixed budget," he said.
Before signing a lease, however, consider the following:
Tenants still have responsibilities"When people are tenants they think the landlord is going to take care of everything," said Jason Shepherd, co-founder of Denver-based Atlas Real Estate Group. Yet things like plowing the driveway, mowing the lawn and changing light bulbs still may be the tenant's responsibility.
Owners can control housing costsBeing a tenant can offer less stability if the owner decides to sell the property or boosts the rent every year, Shepherd said.
When Mancell began renting her apartment, she was spending about $600 less on rent than her mortgage. But she was also subject to 10 percent annual rent increases that eventually caught up to the mortgage.
A fixed mortgage payment can be a hedge against inflation, said Alexis Hongamen, founder of FederalRetirementAdvice.com.
Consider the value of home equityIn areas that are appreciating steadily, it may be advisable to buy.
"It generally means that the neighborhood is increasing in popularity and quality, which means rents will eventually rise [also]," said Allen Shayanfekr, cofounder and CEO of Sharestates, a real estate investment company.
Shepherd said the ability to tap your equity in a home later in life can be valuable. But be aware it could take months to sell or many weeks to refinance and tap those funds, Hongamen said.
Owning outright may stretch your dollar furtherThe tax benefits of a mortgage, insurance and property tax write-off may not be as valuable, particularly if the home is owned free and clear or has a low mortgage balance, said Flood. (And tax-reform being debated in Congress could change that.)
Selling a debt-free home and using the proceeds to pay rent also doesn't make financial sense, said Michael Alexenko, a certified financial advisor and president with St. Charles, Illinois-based Royal Asset Managers.
Assuming you netted $250,000 from a home sale, you should draw about $10,000 a year (based on a 4 percent withdrawal), which may not let you to rent a home comparable to the old one, Alexenko said.
Think about renting locally and investing remotelyIf retirees are located in a major housing market where monthly mortgage payments exceed median area rent and are in a position to invest, they should consider renting a home locally and buying another somewhere else to rent out, said Steve Hovland of HomeUnion, a real estate investment planning company.
"The mortgage on an investment property will likely be cheaper than their monthly rental payments," Hovland said.
Consider your lifestyle For some, the psychological benefit of owning and the ability to decorate and change the premises is important, said Hongamen.
Others want to move around. Four in 10 older Americans rent because it gives them more flexibility, according to the Credit Sesame survey.
Mancell, who co-owns an online trading business called Girls Gone Forex, is one of them. She is planning to join a network of live-work, short-term housing for $500 a week so she can see the world.
"Saving money wasn't really the point. I just want to be free," she said. "I don't know if I'll ever buy a house."
Google is moving to Boulder and it's presence is becoming more and more known. Buildings are starting to take shape and this tech-savvy community is getting excited. Phase I, which accommodates 1,000 workers, opposed to the 340 current Boulder employees, is expected to be done this year. Phase II includes the construction that is starting to take place at the intersection of 30th and Pearl, but does not currently have a set end date. This phase will contribute to the total project which includes four acres and 330,000 square feet. By then end of the project, there will be three four-story buildings with underground parking.
Google has also made a huge investment in an affordable housing project in Boulder. This project will help renovate hundreds of apartment buildings and offer a less expensive solution for those looking for housing in Boulder. This type of project is not new to Google, as their goal is to provide affordable, high quality, safe housing options for its community members and workers. These programs also allow Google to build large office space in exchange for bringing betterment to the area. In Google's founding city, Mountain View, CA, the company implemented a multi-million dollar project to invest in trails, a science center and affordable housing. In total, the company has invested in these types of projects in 44 cities across the US. There is some controversy in Boulder, however, how an affordable housing project may affect the current market. With prices so high, offering lower prices could drive down the market in order to keep it competitive. However, the pro is that Boulder get's the benefits of a large company's resources and their investment into Boulder.
One of the first apartment complexes set to begin it's renovation is Nest in South Boulder. These units will be more energy efficient and improved at the end of renovation. Osage and Thunderbird, also in South Boulder will also be apart of this project. To learn more, visit Boulder County Business
Across from Sloan's Lake, a new 12-story condominium building is ready to start selling units. Though condos have not been built in Denver for years, this new development is expected to cater to the vast numbers of people moving to Denver and looking for urban living. The development is going to have high end finishes and amenities that include a pool, gardens and a state of the art fitness center.
The new development is selling their beautiful views of the mountains and lake. This, however, has caused some conflict for current residents in the area. While those moving into the new condos may get quality views, others will loose their pristine views of the mountains and now have to look at the large 12-story building instead.
To read more about the new construction click the link or read the Denver Post article below:
Sloan’s Lake condo tower Lakehouse to launch sales this week
12-story condo project in St. Anthony Hospital redevelopment drew earlier neighborhood ire over building’s height
By EMILIE RUSCH | email@example.com
PUBLISHED: August 8, 2016 at 5:20 pm
One of the first large-scale condominium developments built in Denver in years will launch sales this week.
The cost of getting a slice of 12-story luxury tower across the street from Sloan’s Lake: Units in Lakehouse will start in the mid $400,000s and go up past the $1 million mark.
“We feel the condo market is strong,” NAVA Real Estate Development CEO Trevor Hines said Monday.
“People are still moving to Colorado. They’re used to a certain standard of urban living and as Denver grows, there’s just not enough condos for everybody. We want to meet that demand.”
Denver-based NAVA plans to break ground in the fourth quarter on the 206-unit project, which at 17th and Raleigh streets anchors the northwest corner of Sloans, the seven-block redevelopment of the former St. Anthony Hospital campus.
An on-site sales center — equipped with a model kitchen and bathroom — will be open regular hours starting Friday. On Monday, crews were busy putting the finishing touches on the center, which sits on what will later become a public plaza in front of the tower.
“There’s a solid demographic of people who want this type of product — flexible, low-maintenance, beautiful, well-built, urban — but cannot find that product,” Hines said. “A lot of the interest we’ve had is from people who are paying a lot of money to live in apartments downtown, high-end apartments, but they’d rather own.”
Resident amenities at Lakehouse will include a 18,000-square-foot outdoor deck on the third level, with an urban farm, pool, hot tub, cabanas and gardens; and a “fitness lab” with state-of-the-art exercise equipment, yoga room, sauna and juice bar.
Finishes in the one and two-bedroom condos will be modern and natural — hardwood floors, Italian cabinetry, Kitchen Aid or Jenn-Air appliances, soaking tubs and stone and tile accents. Units will range in size from 675 square feet to 2,473 square feet, and just under half the one-bedroom condos will have a den.
Designed by Denver-based RNL and Houston’s Munoz + Albin, the project is also seeking WELL certification, a third-party building standard focused on health and wellness through “air, water, nourishment, light, fitness, comfort and mind.”
About 70 percent of the building’s skin will be glass, Hines said.
“We’re going to sell fabulous views — lake to the north, mountains to the northwest through southwest and downtown to the east,” Hines said. “This location is pretty top notch for views.”
Of the 206 units, 13 will be street-level “row homes” along 17th and Stuart streets, buffering the primarily single-family residences to the west from the main 12-story tower at Raleigh Street.
That height has been a past source of neighborhood heartburn. A group of residents challenged the Denver City Council’s approval of a rezoning to allow 12 stories fronting Sloan’s Lake in court, but a judge sided with the city earlier this year.
As for the construction defect issues that have sidelined most large-scale condo development in Denver in recent years, NAVA president Brian Levitt said the company is taking the risks seriously and will not shy from making any necessary repairs.
“We’ve selected the best consultants in town and we’re really trying to build the best building we can and we’re going to document it to show we’ve done it right,” Levitt said.
That approach, however, comes at a cost reflected in the condos’ final price tag. “Being that conservative, there is an expense, but that’s how you do it,” Levitt said.
“It’s the expense of a belt and suspenders,” Hines said.
The Lakehouse sales center, 4202 W. 17th Ave., will be open 11 a.m. to 6 p.m. Wednesday-Sunday or by appointment starting Friday. The listing agent is Kentwood City Properties.
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