Author Topic: plan for NO HOUSE - NO HOME OWNERSHIP and retirement  (Read 4708 times)

offroad

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plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« on: February 06, 2014, 12:00:58 PM »
Well my personal pattern is that I will not own a house.  Am single, and trying to drive my living expenses lower.  Just can not see buying a house as

1)  No down payment available
2)  All savings in 401K investments
3)  late in life over 50 and single
4)  can take a 401k loan of $50k but that would reduce my interest, and would still need another $150k for a home
5)  dont have the time or energy beyond the job to fix up a house
6)  will look at $25k personal interest income at retirement in 5 to 10 years.

Does anyone have a model for NO HOUSE - NO HOME ownership early retirement plan?

rubybeth

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #1 on: February 06, 2014, 12:16:45 PM »
We don't own a house and don't plan on buying one anytime soon. I've used Michael Bluejay's Rent vs. Buy calculator and entered a bunch of different assumptions, and for us, it just doesn't make sense to buy when our rent is so low: http://michaelbluejay.com/house/rentvsbuy.html

We've talked about potentially buying a house closer to when we retire, but we've got about 10 years before retirement, so plenty of time to crunch more numbers and decide.

swimmer21

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #2 on: February 06, 2014, 12:41:33 PM »
Plenty of retirees rent. It may even make financial sense in your area to rent.

Typically, if you plan to stay in one place for a very long time, it's less expensive to buy than to rent. In your case, it might make sense to buy a duplex where one of halves is a good fit for you to live, and rent out the other half.

However, it wouldn't make sense to buy a house and have your entire down payment come from a 401k loan. How much are you currently saving? If you're saving enough that you'd have a  20% of down payment well before you plan on retiring, that's something you may want to look into.

offroad

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #3 on: February 06, 2014, 02:29:57 PM »
five yeasr of savings of $1000 a month will get you $48k which is 20% of a typical house cost in five years. 

Who is going to save $1000 a month?  or $12,000 a year?  suppose that should go into a 401k beyond the $17500 or $5000 catch up limit.

Already trying to put in the $22500 per year and thats a lot on my income.

offroad

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #4 on: February 06, 2014, 02:40:18 PM »
Rubybeth - good calculator. 

1)  But calculator does not include commuting costs for the distance.  Live less than one mile away now.  my costs are maybe $5000 a year fuel and car costs worst case if I found a place within 25 miles. 

2)  Also calculator does not include sales costs to sell the house.  which in a bad market can be 10% to 20% on the value after five years. 

these are not simple plans to be certain of.  Glad to know that your plans did not cause you to buy a house, and that you are an example of some who do not think you have to own a house.   

Johnny Aloha

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #5 on: February 06, 2014, 02:49:56 PM »
Have you looked at the 'small house' movement?  You can build yourself a fully functional place for under $15-20k, if you have the time/energy.  It doesn't have to be 100sf either, I've seen some at 700sf.

offroad

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #6 on: February 06, 2014, 02:58:30 PM »
Johnny - I like that idea a lot.  and will be one of my alternatives to consider.  Has to be liquidated in five years though so need to be careful.  Maybe renting is still right. 

1)  Small House without any restrictions.  maybe get one done for $50k
2)  Small RV house living area without restructions.  Usuyally have to find unincorporated land, which is not nice.
3)  Small RV on a rental space in a nice RV park.  That is usually $750 per month to $9000 a year.


rubybeth

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #7 on: February 07, 2014, 07:09:27 AM »
Rubybeth - good calculator. 

1)  But calculator does not include commuting costs for the distance.  Live less than one mile away now.  my costs are maybe $5000 a year fuel and car costs worst case if I found a place within 25 miles. 

2)  Also calculator does not include sales costs to sell the house.  which in a bad market can be 10% to 20% on the value after five years. 

I disagree, you can use this calculator to factor in both of the above. Calculate your own commuting costs, then add those costs into the calculator under "maintenance (annual)." For the cost of selling the home, add that info. under "Home Value" section, and select a negative number for 'Appreciation rate' if you are thinking you would sell at a loss. You could also add a high 'Commission/closing costs on retail' number to help simulate a loss.

rockstache

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #8 on: February 07, 2014, 09:50:32 AM »
We're married and in our 30s but we have absolutely no plans to buy a house. I like to travel, and love the idea of the slow travel, and would hate to be tied down to one location.

shadowmoss

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #9 on: February 08, 2014, 09:51:30 AM »
RV lot rent in the park where I live is $15/day and that includes utilities, basically $450/mo.  You can go lower in this area as well.

bikebum

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #10 on: February 08, 2014, 03:43:54 PM »
I don't see anything wrong with not owning a house. I do own a house (actually a mortgage, haha), but that's because it makes sense where I live. I think home ownership is over-rated in the US and not always better than renting.

soccerluvof4

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Re: plan for NO HOUSE - NO HOME OWNERSHIP and retirement
« Reply #11 on: February 12, 2014, 06:10:32 AM »
exspecially if the house isnt going to probably appreciate and you add in all the expenses to maintain. I know alot of people in my area are renting very nice homes for less than its costing me to pay taxes etc... If it were soley up to me I would be out of here but for now i chose my fights carefully! haha