Quote:
Originally Posted by NatureBoy
I'm about to hit the big 5-0 and my wife & I are starting to look at where we want to be when we become empty nesters in about 5 years. The easy answer is to roll the equity in our current home to a Villages home and keep on chugging. But not so fast.
According to this article the decision to rent vs buy is far from a slam dunk for 'buy'.
The prime factors I see are: - How long you intend to stay in the home.
On the buying side, the shorter time you plan to stay in a home, the more money is eaten up by closing costs, agent commissions, remodeling, etc. In our case, our child will go off to college and we MIGHT move to wherever she ends up to be near any grandchildren. So we could be in TV from four to eight years and then move away.
- The Price-to-Rent ratio.
TV is a vacation area and rents vary greatly seasonally. I poked around in Zillow a bit, but it was hard to get a feel for the P/R for longer term leases.
- Appreciation
If the article is to be believed, over the long run, home prices don't outpace inflation measurably. From what I've seen of TV, they are building new homes so fast with no end in sight, that it appears resales go for about the same as new. Maybe at some point FL will put a moratorium on new construction for environmental reasons and that will make the prices shoot up. But in the mid-term, I don't see a lost opportunity cost for holding out on buying.
One of the things that's impressed me about TV people is that many "do their homework" and did a lot of research before moving to TV. Anyone care to share any of the financial homework you've done or have seen others do on the rent vs buy in TV equation? |
Five years from now?
The information you are asking for simply does not exist and what is known you would not or should not share publicly.
UNKNOWN-what will your current home that you plan on,"cashing out," be worth. I think you implied that your current home is not paid off and you plan on having a mortgage on,if you purchase a place in the Villages. You do not know the mortgage rate in five years. That will effect not only the cost to buy but the ease to sell.
MY THOUGHTS-beware of panic and mistaken planing. It is a standard comment of people in the villages moving several times. The ones I know of, it was not due to financial changes, or death or health issues. I would not ask but, poor planing and or BOREDOM come to mind. It is true that homes in the villages are going up in price but, do not forget the home you now live in
is likely also going up in price. The increase in your current residence may be higher than the average in the villages. In any case it will offset part of the price increase in the villages.
YOU DID NOT MENTION- You stated your plan is for you to be 55. Be sure you have healthcare insurance. You cannot get on to medicare till age 65. Private healthcare insurance for two, will cost you about 20,000 a year.
FAR AS A FIVE YEAR PLAN-now is a great time to get rid of stuff.
I, a pack rat, sold stuff on ebay for like five years-very part time. We had a garage sale once or twice a year. I made a good amount of money. Money is far easier to move compared to STUFF.
OUR PLAN-we are ex-New Yorker's. We escaped the 6% state tax, a 3% city tax, oppressive real estate tax bill. ALL WENT AS PLANNED-EXCEPT FOR WHAT DIDN'T