It needs to be corrected. It is not what she meant. She meant renting in the first sentence not owning.

"By the time most parents die their offspring are/should be well past the age when inheritance could be a huge help to them. If one inherits it's a GIFT--gifts are not to be anticipated/expected/demanded. When we had children we took on the financial burden of caring for them until adulthood, after that they were and continue to be 100% on their own."

You and your spouse are to be commended for this accomplishment, it's not a trivial thing to do nor is it as common as it should be.

Heirs don't typically wave amounts allocated to them. Everyone should keep that in mind when assessing living expense needs and investment tactics for their remaining years.

I once worked with a woman that said she'd NEVER made money owning a home. She planned on renting FOREVER! Maybe that's how others feel. ? It's a good question for a discussion.

In our previous college town neighborhood, the housing and property tax are higher than other towns. The seniors who bought their houses in the 50's-70's, they have been facing high property taxes and high med bills. Many of them did reversed mortgage in order to stay in their homes.

Yes, I corrected it; I was rushed this morning when I posted thanks.

Just my opinion, the question really should be where can you live the life you want? Only after answering that question should you worry about renting or owning. A former neighbor of mine sold his home to rent in a mixed-use development, then he moved his office into the same development. The development has like 20 nice restaurants, a grocery, tons of retail shops, entertainment stuff, etc., and it is all within a three block area. I suspect he would tell you that the rental enriches his life in ways his home never did.

I believe we invest too much in accumulating stuff and too little in accumulating experiences. It seems to me that owning a home is too often a measure of self-worth. My goal is to die completely broke, having done everything I ever thought to accomplish a few hundred years from now... (it is an aspirational goal).

Numerous factors come into play. Location plays a huge part in the decision. I bought my small 2 bdr garden home near downtown about 10 years ago with a large down payment. Mortgage is about $1200 per month (high property taxes here.) Same size home in the area is $2500-$3000 per month. Value more than doubled since purchasing. So for me it turned out to be the best decision. I would

"I believe we invest too much in accumulating stuff and too little in accumulating experiences."

I think this is an overly broad generalization that isn't widely the case. Some do and some don't, and it isn't a black and white matter and is sometimes a matter of degree or mix between the two. Some do neither and just try to get by from day to day, or do so because that's what they prefer.

Our goal for our retirement years was to be entirely debt free, including a mortgage. We achieved that goal and it gives us great peace of mind. We definitely prefer owning our home, rather than renting. No worries about rent increase, etc. We didn't want to have a monthly house payment or car payment. We are lucky to have a monthly income that allows us to cover all our necessities and most of the "wants" too--such as travel, a few small luxuries, etc. If we incur an unexpected expense, we cut back on our unnecessary spending for a couple of months rather than dip in to our nest egg or retirement funds.

When the time comes that we need assisted living type care we'll sell our home and rely on our nest egg and money from the home sale to pay for our necessary care.

We have enjoyed our "foot loose and fancy free" lifestyle for over 20 years, but we sure worked hard to get here!

Our lives have been enhanced by real estate purchases one of my great-grandfathers made 140 years ago. So, yes, I am a fan of owning vs. renting to my last breath.

Now in my 14th home since my first buy, with a few more to go. I hope!

Early in my career, I had a colleague (whose father had been a general contractor) who decided to buy fixer-uppers to renovate and turn over as a way to make extra money. Our area was a relatively expensive and hot market even back then. He spent evenings and weekends doing what work he could do himself and hired out what he didn't have time or ability to do. They moved into the houses they bought, it was the only way they could afford to do it.

After 5 years and 3 houses, his wife put her foot down. She was okay with living in houses where work was going on but she didn't want to have to pack up and move every year or two. She told him to find other hobbies. That was the end of this activity for him.

Why the story? Everyone chooses how they want to live. If you asked people if they wanted to change homes 14 times in their adult lives just to make more money, most would decline.

"I think this is an overly broad generalization that isn't widely the case."

Well, let me rephrase what I said... I believe the abundance of research that says we overvalue the accumulation of stuff in assessments of self-worth and happiness are correct.

Sheesh!

When figuring for investment success you need to figure in inflation, taxes, maintenance and interest on your original loan. Not many people do that.

No worries, stax, he often tries to make even real stuff up and pretend it's otherwise.

No worries, stax, he often tries to make even real stuff up and pretend it's otherwise.

LOL... how exactly does someone make up real stuff?

You got me though... I made up materialism just now! In fact, I also made up the Material Value Scale and the Google search for scholarly articles that turned up 17,000 results. I have a very powerful imagination...

It seems to me there are a lot of factors that go into deciding whether to own or rent, not least one's own financial situation, but also of course ones lifestyle preferences (and one's anticipated life expectancy). There is no one decision that is right for everyone.

I agree with Bry that the choice of where you want to live is critical: by the time we were ready for what we hope will be the last move, at least before the nursing home, we had had our fill of big city living so an apartment in downtown Megalopolis was never on the cards - but neither was life in the suburbs. Like Bry's friend, we found a community with all the amenities located within a 2km area - beaches, cafes, restaurants, shops, golf course, supermarkets, medical facilities.

There are plenty of rentals available here - houses, townhouse-type units, apartments, but we never really considered those. We like the (relative) privacy of having our own house, even if it is on a tiny lot, and, having been through issues with condo boards (not to mention unexpected levies to deal with unexpected structural issues), I was personally not keen on that concept either. We did make sure that the house we ended up in would be senior-friendly - no stairs, walk in shower, wide hallways, that sort of thing.

Of course there are costs to home ownership - property taxes, insurance, maintenance, etc - but ultimately a renter also pays for those things too through the rents the owner levies. And if you rent a house or unit, you're going to have a garden of sorts to maintain just like the homeowner next door.

For us it all boils down to the fact that we have pensions and superannuation investments that provide us with a comfortable lifestyle and most of our "wants" (the ones that Covid didn't steal, anyway) and the equity we have in the house may eventually cover that nursing home. My mother lived to 99 and spent the last few years of her life in a nursing home: by the time she passed away her savings from the sale of her house were gone, and my sister and I were helping pay for the nursing home costs. I'm mindful of that too.

It is difficult to discuss housing as an investment.

For most Americans housing is not a very good investment. It generally returns less than other investments that have lower risk and it requires constant cash outflows for maintenance, improvements, and taxes.

However, there are two things that turn the tables pretty well in housing. First, you have to live somewhere and thus the marginal investment in a modest home is often zero or even negative. In other words, once you deduct what you would be paying in rent, the additional cost of ownership is quite low, making homes a fabulous investment. Next, houses tend to be levered investments, so you are getting the growth on the full house price while only having a portion paid off, which adds to their value as a investment.

From a purely financial standpoint, it is generally a great idea to buy a modest home in an appreciating neighborhood and stay there. However, I generally don't think people are better off by considering their house from a purely financial standpoint. YMMV.

I don't want to be renting when I retire but I also don't want a mortgage. I expect our house to be paid for as we near retirement so we can sell the big city house & downsize to 2 condos - one up north for spring, summer & fall -- & one down south for the winter. At least that's the goal :-)

I never want to be beholden to a landlord, so I'll stay in my house. It's 44 yrs old and I'm making repairs on it but it's mine. No one can kick me out and I have a LOT of equity. I can't live anywhere for as little $$ as where I'm at.

Depends on your personal finances as well: we are retired and mortgage-free for almost 10 years. When the day comes that we can’t maintain our house/yard, we can afford to hire it done for us.

I’ll stop living in my own home when they drag me out kicking and screaming. This is the 7th home we have owned; we rented about 6 months throughout our entire 48 year marriage.

I agree that there is no “one size fits all” for this situation. I have three horses, and although I refinanced my farm when interest rates were 2.75% so I have many years left to pay, my mortgage payment is less than it would cost me to board my 3 horses. I don’t really care about having a mortgage- my little piece of heaven is worth every penny. And it’s not a lot of pennies.

I hope to setup my “forever” home to be just that. Bring in help, not go to a facility. Keep it small and manageable so that leaving it for travel can also work. Fantasy, maybe. I want as much control over it as I can get and that is ownership and careful consideration of location, location, location. (And aging in place strategy.) A detached villa would be nice but I haven’t found many of those in FL.

ETA: I've noticed that the older you get the more difficult it is to change and move on many levels.

I guess I am retirement age....I am 75, and I suppose that is an age that some people go into assisted living. I live alone and I have a very simple life. I have no one to take care of but myself...oh, and a bunch of old horses. I like living here...probably if I had it to do over, I would have bought a different place, but my husband had a terminal illness and he wanted me to have a place that would be easier to take care of the horses, so we bought a place that had been an Arabian horse farm. But, this place was built 40 years ago, so there in a lot of upkeep involved living here. Anyway, I am active for my age, and despite some arthritis, I can get around pretty good.

I have a horror and dread of nursing homes. I have seen some awful situations down some of those long halls where people seldom get visitors, and I know how important it is, if you have a loved one in a nursing home, to check on them very often, to be sure they are receiving good care.

I would be the most miserable person on earth if I had to be around a bunch of people all the time. I have almost nothing in common with almost all other old ladies. I want to stay here as long as I can, and when I can no longer take care of myself, I hope I have the fortitude to end it. It is something I have planned for years, and I don't feel sad about it. I just know it is a decision that must be made while I am able to make that decision.

"I believe we invest too much in accumulating stuff...."

I agree completely, and I suspect others would agree if they've had to clear out a long-time home of an elderly relative. Decades of accumulated stuff, all of it so critical to have at the time that becomes almost worthless at yard sales or ends up completely worthless in landfills. I have had to clear out too many homes of relatives and rue the day when it's my turn to clear out our own home.

"LOL... how exactly does someone make up real stuff?"

It isn't something I do but in prior discussions not that long ago, when you made a comment that I questioned the veracity of, you admitted you'd made it up but that "it could be".

"It is difficult to discuss housing as an investment.

For most Americans housing is not a very good investment. It generally returns less than other investments that have lower risk"

I agree that housing is not an investment in a classical sense, per se, because it can be illiquid and have a lot of baggage that can make selling difficult. At the same time, there are a whole lot of people for whom at retirement time their largest asset is the profit from the value of their home.

For most Americans, real estate has been a great investment.

It varies with the area. In areas with robust economic activity and limited housing inventory, phenomenal profits can be made, especially considering that it's a leveraged investment. Meaning, you put a small amount down but the appreciation hinges off the total value, perhaps 4 times greater than the actual cash invested. In my state, it's not uncommon for people to realize phenomenal gains on homes.

For those living in areas where job losses have been experienced in recent decades and there's been little growth, real estate may be ill-advised and offer poor or even no returns. In so many parts of the US that have been thriving in recent decades, vital urban and Sunbelt regions, real estate has done very well.

Housing is an investment and I don't find it particularly difficult to discuss. It's the purchase of a long-term asset. A plant that manufactures washing machines is also an investment. Neither of them may be particularly liquid and may be difficult to sell, but that does not mean they are not investments. It's just that housing provides a service from which the owners derive value while using the house that is apart from the financial value that it may yield upon sale.

Housing is not a classical investment. An investment is an asset purchased with the intent of the buyer receiving a profit or return and selling at an appropriate time. Housing for personal use is purchased as a place to live.

In that same way, a factory is not purchased as an investment. It's purchased as a place to do business. Both are purchased to provide a function. When a business decides whether to lease or buy a location it needs for operations, whether as office space or otherwise, usually the deciding factor for publicly owned businesses is which approach produces the least amount of operating expense that reduces earnings. Business not in the real estate sector make money and produce returns for shareholders by the services or products sold, not by buying and selling real estate.

Investments are purchased and held for sale when advantageous to do so for a profit or to reduce losses. Neither a home nor a commercial location are easily disposed of and for that reason are illiquid and not with the same attraction as more traditional investments.

It isn't something I do but in prior discussions not that long ago, when you made a comment that I questioned the veracity of, you admitted you'd made it up but that "it could be".

Please stop lying.

There is a reason that you don't have any specific details, it is because it didn't happen as you describe. If I remember correctly I used a sum of squares regression with a high R-squared to remove a few years from a data series (with many years of data points) so it could be compared to the time period in question.

It is a completely reasonable and viable method for slightly adjusting the time frame of data. So stop the nonsense.

ETA: Actually nevermind... you just keep on doing you.

Housing for personal use is purchased as a place to live.

But for many, likely even most in high growth areas, it's an asset class by itself. Ups and downs for sure. But unlike securities or that stack of gold in a warehouse, it also provides day-to-day benefits.

Home sales in the US top six million a year. Not as simple as cash in hand. But hardly an illiquid asset. Though, of course, there's no guarantee of profitabilty.

I can't wait to buy and move again. I understand that as long as you're on the move, you're one step ahead of the Reaper!

When my husband was diagnosed with cancer, we knew I wouldn’t want to remain in our four bedroom home and maintain it and the pool so we decided to sell and move nearer one of our sons. Our plan was to rent so the kids wouldn’t be burdened with having to sell after I died, plus to be able to leave and visit our other sons without worrying about the house. However, the rents for a nice two bedroom apartment were about $2500-$3000 per month so we bought a condo in a building with 24-hour concierge, valet parking, and a pool. We felt secure here, two miles from our son, and close to mass transit. Since his passing a year ago, I’ve been so grateful that we made the move when we did. I don’t worry about them having to sell it anymore. It’s paid for and they only have to pay the maintenance until they sell it. I told them they can sell it below market for a quick sale because it will be a net gain all the same for them.

"Please stop lying."

Nice try.

Housing is an investment and I don't find it particularly difficult to discuss.

I find housing as an investment fairly difficult to discuss in any meaningful way. It is always going to be difficult to discuss any investment that has significant non-investment utility.

Suppose I am considering two homes and want the best investment. Should the difference in utility bills be considered a cost? The utility bills are in the future, differ between the two alternatives, and avoidable by making the other choice. What about the difference in the miles on your daily drive? Those are considered relevant or differential costs.

In the end, your house is going to have financial implications on your life far beyond what you paid for it. Sure you can say I paid A and sold the house for B, but that ignores other direct costs like taxes and maintenance. You could then say I paid A, plus B in taxes, and C in maintenance and sold the house for D, but that ignores indirect costs that come from living in one home compared to a different home.

It is nearly impossible to quantify some of the differential costs between houses because people put differing values on various aspects.  For example, what is the financial value of living in a well designed, custom built house versus an oddly extended, poorly built house. How do you put a value on daylight or physical safety from natural risks? For me, not living in a flood plain is much more valuable than just the cost of flood insurance and the deductible. Then there is the issue of psychological costs and benefits that differ based on personal values. A house is much more than just a financial decision when housing directly impacts so many areas of our lives. It is cheaper to live with the heat set at 55 degrees than 75  but I am not going to be miserable. Treating housing as only a financial decision ignores the emotional effects of a satisfying life.

"Sure you can say I paid A and sold the house for B, but that ignores other direct costs like taxes and maintenance."

It also ignores the costs of buying and selling, like transfer fees/taxes/legal fees/realtor commission

When we sold our 'starter home' (of 30 years), we profited four percent after all the deductions for costs and inflation. We made much more on the funds we invested over the same period, but you can't *live* in a portfolio.

Twenty years ago we build the SFH we live in now -- one floor, near family and medical and other amenities Seniors require. We'll stay here until one of us can no longer physically manage or we can't find decent maintenance and health assistance.

Our twenty years of experience with our vacation condo on Maui taught us that we prefer to make our own choices and pay for them independently. We reached the same conclusion after looking at Senior Living complexes -- where residents resist moving from independent living. The costs were no savings over what we currently spend for our nicer space (and privacy). The 'no worries' sell for condos and Senior facilities just means someone else makes choices for you...with your money.

Most of our demographic requires only a few months of expensive skilled nursing care before death. We hope to experience the same and plan to use hospice care. We have no long term care insurance; we self-insure.

I agree with Lyndee Lee. Few people use investment criteria as priorities over personal preferences in choosing a home to live in. It's just how it is.

Toronto vet, are you concerned about having adequate resources to cover your living expenses when you retire?

"Toronto vet, are you concerned about having adequate resources to cover your living expenses when you retire?"

Fortunately not.

Toronto Vet - it may just boil down to how and where you want to live. I get the impression, possibly incorrectly, that you'd be happier in an apartment than a house, so that changes the equation a bit.

I know that I personally prefer the security and comparative permanence of owning my own home, whether it makes perfect financial sense or not. And also the privacy of a house over a condo. As far as maintenance goes, I already hire someone to do the yard work (not that there's much of it ) and one of these days, I'll probably find a cleaning service as well - but if the house were a rental I'd still be doing both things. Yes, I have to call an electrician or a plumber instead of a landlord if there's a problem, but at least I have some control over the situation. I wouldn't see that as a determining factor for myself. It could well be for you.

I guess, I'm leaning towards your friend's viewpoint - but for me, not for you. You have to do what feels right to you. As I said earlier, I really don't think there's a right or wrong answer.

"Few people use investment criteria as priorities over personal preferences in choosing a home to live in. It's just how it is."

My job had me moving every 3-4 years for over 24 years. Had to consider BOTH aspects, resale and what we would be living in.

Some things always rose to the surface. Good Schools was always a requirement, whether we had kids in school or not. When selling, good schools usually cause a selling premium. Even if working from home, location, location, location as a atraction for the next buyer.

Given insane housing market (not much to choose from, high price) it's wise to have a plan B when contemplating retirement. I plan to rent out my place and go rent somewhere else ... and/or do some really serious travelling. Not sure I can do the Nomadland thing full time, but some months here and there sound really appealing. Mine is a two-unit (been living in one of them) but people around here commonly rent out entire houses too. It is a high demand area - may not be an option if yours isnt. Even with the expense of hiring someone someone to manage and maintain the place, it still leaves me with a pretty good income that other types of investment dont come close to matching. My other thought is - life is short. The clock is ticking. 20 yrs = only 7,200 days. How do you want to spend those days? Does loss of some hypothetical future income (which may or may not materialize) matter to you?

"I get the impression, possibly incorrectly, that you'd be happier in an apartment than a house, so that changes the equation a bit."

My preference would be a small house, but they are difficult to find in reasonable condition (i.e. not a tear-down being sold solely for land value). In lieu of that - and not wanting to build a new house - my last 17 years have been in a condo apartment.

I'd never live full time in an apartment-like structure high- rise or low-rise, whether rented or owned, unless if it were something like a pied a terre purchased for my personal periodic, short term use in a major city. I've spent too many years living in roomy and detached single family houses to be able to tolerate others living in close proximity for an extended period. I have a second, detached house for part time use in another area . It's quiet and quite comfortable but it lacks enough separation space from neighbors for it to be suitable for our full time use.

We all have different preferences.

Many people downsize so they can turn the key and walk away for months at a time, traveling to beautiful places with better weather. Which is probably what we will do.

I prefer owning a home over renting and in the area where I live finding a place to rent is not easy. I like having my property to do with what I like. My senior cousin moved here from Toronto asking to stay with me for a month or two until she found an apartment. She put her name on the list for geared to income and I told her the waiting list was approximately 8 years for the area she wanted to live. Most other apartment rentals are beyond her reach. Two months staying with me has turned into 2 years and counting.

When DH and I purchased our current home 40 years ago, we considered two factors to be important: Is it located in an area that has many positive features; and, can we envision the property still being desirable and potentially selling for a reasonably increased amount in perhaps 50 years hence. It has been a very worthwhile investment for not only have we had a very comfortable living situation for many years, also the few real estate sales occurring in the area have been brisk and for generous amounts. On the other hand, at this time in our lives we feel it would make more financial sense to rent an apartment and not purchase a condo should we decide to move.

I agree with you. Our home did its job when raising our family and enjoying our family life. Now, that the kids are grown and living their lives we don't need nor want the up keep on a large home. We are now in the process of down sizing. The kids are taking what they want and we will keep, donate or trash the rest. We traveled quite a bit with the kids growing up. We plan to keep doing so. A house would tie us down now that we are retired. When we sell our house, we will be renting thereafter. Easiest and most financially correct thing for us to do. Don't want a smaller house or condo, it still ties you down. I think the only thing I will miss is the large yard. Love my flower and vegie gardens, Renting anywhere we choose is good for us.

In my area rentals (and homes for sale) are close to impossible to find. A friend was renting for the last year+ while looking for a house to buy. She finally found a house and the landlord was able to get a new tenant in less than 24 hours.

We rented single family homes twice in the last 12 years. First when we relocated due to work and were looking for a house to buy and recently when we retired to a new state and needed to rent while building. In both cases the houses were listed and sold while we were renting them and the new owners wanted to move into the properties as soon as the leases were up. The rentals were just temporary for us, but if you had planned on renting long term, being forced to move from a rental at the whim of the landlord would be a major hassle and the biggest negative for choosing to rent.