Author Topic: Buying house after FIRE??  (Read 2382 times)

Fire2025

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Buying house after FIRE??
« on: January 24, 2016, 01:53:35 PM »
Hello all,
I have a general question for the math savvy in this group.  I live in a very HCOL area, but I have the great good luck of having extremely cheap rent.  So I have absolutely no reason to buy into my current market.  Landlord is an individual around 50 - 60 years old, does not raise rent on a regular basis.   

I plan to FIRE in 10 years.  I will be 55 years old. My stash will be on the small side about 450k, but I only need it to fully fund the years until I'm 65 and SS kicks in.   Then it will just be a supplemental.  I easily live on about 20,000/year and only expect to add 2,000/year for travel.  I will also have an income stream of about 8,000/year, so I will draw about 14,000/year, well within the SWR. 

At the point I FIRE, my partner and I have discussed moving to a LCOL area and buying a small house.  We are assuming the landlord may not be around anymore, or much longer, by that time.  This will stabilize our "housing expenses" and free us from inflation worries, in that budget area.   

We are extremely handy.  We can handle any job, except hazardous waste remove (i.e. asbestos removal).  Plumbing, electrical, and jacking up foundations are not scary for us.

The question is, is this a good or bad idea?  When I do the math, artist here, so read super simple math, It really does seem like a good idea, but my gut tells me that buying a house at 55 years old, and newly FIREd, is a bad idea.

What say you all?


deborah

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Re: Buying house after FIRE??
« Reply #1 on: January 24, 2016, 02:07:14 PM »
See the post-fire subforum for some similar discussions, particularly http://forum.mrmoneymustache.com/post-fire/getting-a-mortgage-after-fire-46852/

Fire2025

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Re: Buying house after FIRE??
« Reply #2 on: January 24, 2016, 05:10:48 PM »
See the post-fire subforum for some similar discussions, particularly http://forum.mrmoneymustache.com/post-fire/getting-a-mortgage-after-fire-46852/

Thanks for the link.  I read this one too.  But it seems to talk more about how to get a mortgage, than if it's a good idea.

Cassie

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Re: Buying house after FIRE??
« Reply #3 on: January 24, 2016, 05:43:26 PM »
If it fits your budget I don't see it as a bad idea. WE bought the house we live in now at age 58. I know people buying houses at 70. I don't really see what age has to do with it.

Fire2025

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Re: Buying house after FIRE??
« Reply #4 on: January 24, 2016, 05:51:33 PM »
If it fits your budget I don't see it as a bad idea. WE bought the house we live in now at age 58. I know people buying houses at 70. I don't really see what age has to do with it.

Thanks, I think it's my debt aversion a work.  I will pay off the last of my student loans when I FIRE, then taking on a Mortgage right away means I will have spent my entire adult life in debt, and I'm not sure that's a great idea.

Cassie

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Re: Buying house after FIRE??
« Reply #5 on: January 24, 2016, 05:57:52 PM »
Either pay a mortgage or pay rent. You are still paying. I think the important thing is to do what fits your budget and makes you happy!  Personally we like to own so we can change things to the way we like them.

CindyBS

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Re: Buying house after FIRE??
« Reply #6 on: January 24, 2016, 09:19:51 PM »
Also, don't forget then benefits to owning that can improve your finances post FIRE.  I am specifically thinking of things you may not be able to do if you rent such as growing a portion of your food in a garden, using a rental unit in a basement for tenants or Airbnb, being able to have a shop for a carpentry hobby business, etc.

Fire2025

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Re: Buying house after FIRE??
« Reply #7 on: January 24, 2016, 10:28:49 PM »
Either pay a mortgage or pay rent. You are still paying. I think the important thing is to do what fits your budget and makes you happy!  Personally we like to own so we can change things to the way we like them.

I love the idea of home ownership.  But it's just not an option, here in LA.  So the idea that I maybe able to in FIRE, is really seductive. 

Also, don't forget then benefits to owning that can improve your finances post FIRE.  I am specifically thinking of things you may not be able to do if you rent such as growing a portion of your food in a garden, using a rental unit in a basement for tenants or Airbnb, being able to have a shop for a carpentry hobby business, etc.

I have a metal shop in my current rental, so I'm not limited in that way.  But I do know that it could be shutdown anytime, if the landlord got nervous about it.  Doesn't seem to care, but if that changes, then I would have to take my studio down.  That's one of the scary things about renting.