When Cass and I completed the sale of our advertising business in 1997, we moved from Rochester, New York to Williamsburg, Virginia to live closer to our younger daughter and her family. 16-years later we moved again, this time to Richmond, to be even closer. How close? Around the corner! We would have relocated sooner, but the unprecedented financial collapse of 2008 required a five-year wait to sell our house in Historic Colonial Williamsburg. Not fun. But once the deal was done, we decided the time of life had come to eschew real estate taxes, escrow accounts, and the never ending expense of maintaining a home. After weeks of searching, we found a “Luxury Apartment” (new marketing strategy) in Richmond and signed an apartment lease for the first time in forty years! Renting also allowed us to get the lay of the land before deciding if Richmond might end up being our permanent residence. But there was another advantage renting had to offer. Our older daughter and family live in Tucson, Arizona. As much as Cass and I wished we could split our bodies in half, that didn’t seem a feasible option! Without the never-ending expense of owning a house, we decided to rent a small apartment in Tucson, around the corner from the Arizona clan. We spent time in each location as able, thereby enjoying both our daughters and three grandkids.
Three years later, we bought a “Luxury Condo” (same marketing strategy) in Richmond and gave up on apartment life . . . again! Don’t get me wrong, apartment living is okay if you’re twenty-years-old, but in life’s fourth quarter, not so much. It bothered us to no end that so many of our apartment neighbors took no pride in where they lived! You don’t have to own it to take care of it, after all. We love dogs as much as the next person, maybe even more. But to think it’s acceptable for renters not to pick up their pets’ . . . uhm . . . poop . . . is totally unacceptable. And leaving mounds of garbage strewn about because you’re too lazy to carry yours to the dumpster is also unacceptable. Oh, there were many more reasons, but you get the idea. So we became homeowners once again, despite having promised each other that we’d never purchase another home. Despite our Senior-hood, the time seemed right. Living in Williamsburg, we could never comprehend why retirees in their 80’s and 90’s were buying 10,000+ square-foot homes with five or six bedrooms . . . for one or two people. I assure you, 1,700 square-feet of space proved more than adequate for our needs.
There are positives and negatives for both living options. The apartment lifestyle allows you to live free of any maintenance costs. The grounds are well maintained. Broken appliances are replaced or repaired as needed. Painting and power-washing are done by a crew. And let’s not forget the pool, exercise room, and clubhouse, all well maintained. On the downside, though, the rent automatically increases at least 10% every year, like it or not. The worst experience for us was when the apartment was sold to an out-of-state buyer in the third year of our lease. What had been a lovely place to live for two years deteriorated rapidly into a drug haven, not to mention all-night party town, with the kinds of problems you don’t care to experience in the fourth quarter of life. So, we left. And just in time.
On the positive side of condo life, we are once again owners. We’re free to paint our walls whatever colors we wish; free to purchase appliances, flooring, and accessories that meet our own needs and wants; and, free to decorate to our tastes. We quickly learned that owners treat the community we live in much differently than renters would. One important question confused us, though. “In-the-know” financial columnists warn against obtaining a mortgage during retirement. Thankfully, we did our own due diligence and learned that Uncle Sam requires retirees at age 70-and-a-half to begin withdrawing preset amounts of money from their IRAs! All those years of tax-free investing are now over! Time to pay the piper! If you’re in this position, suddenly a mortgage makes a lot of financial sense. Our rediscovered ability to recoup a percentage of mortgage interest from Uncle Sam becomes a smart choice based, of course, on the value of your property and the extent of your investments. When you’re retired, smart choices are not only important, but necessary. In the end, by owning instead of renting, we were able to cut our monthly living expenses by 50%. The ultimate Half-Price Sale! The only negative, I’m afraid, is the HOA (Home Owners Association) that rules our community with an iron fist. Cass and I are reminded daily that rules and regulations, while well intentioned, can quickly become a real pain-in-the-you-know-what. On the other hand, we value the well-maintained grounds, the pool, the lack of outdoor maintenance expenses, and the company of like-minded neighbor-owners. The most important advantage, however, has been building equity in our home once again, should the time come to sell and move again for any variety of reasons.
Our advice to you? To Buy or Rent is a personal decision based on your situation and goals. But it’s nice to know that our changing life circumstances allow us the freedom to make such choices about our living environment even after retirement. Give it serious thought. We’re glad we made the choice we did. Having said that, the legal disclaimer below is to remind you that we are NOT financial advisors! Do your own research and make your personal decisions carefully.
Consult a reputable financial advisor before making any financial decisions!
© Jeff Resnick 2018
All Rights Reserved
© Jeff Resnick 2018
All Rights Reserved