We Black Americans seem to have been collectively brainwashed when it comes to the belief that home ownership is a cardinal virtue. For sure, owning your home can make a lot of sense. But the truth is, renting a home, particularly for the winter, is often a much better idea for many people’s situations. Let’s start off by comparing some of the advantages of buying a home vs. renting your place to retire.
Pros of Home Ownership:
– Tax deductions. Uncle Sam helps home buyers fund their purchases with generous deductions for property taxes and interest payments
– Pride of ownership. You can fix up and decorate your place however you want – at least on the inside
– Low cost borrowing. Home mortgage rates are still at historical lows, in spite of recent increases
– Appreciation. You have the possibility that the value of your home might appreciate
– Peace of mind: You know where you are going to live next season. No need to scramble to find a new rental every year, and then either move all your stuff into it, or find another spot
– Fewer restrictions. Many communities, particularly active adult communities, are very restrictive about renters with pets, and about which and when renters can use common facilities like golf courses, tennis courts, and other amenities
Pros of Renting
– Flexibility. If there is a natural disaster, your Home Owners Association gets crazy, the builder goes bankrupt, or it turns out you just don’t like your neighbors – you can just walk away
– Freedom. You are not locked into one community. If the grass looks greener, move on over
– Lower costs. Renting can be cheaper than owning in some communities
– Less worry. If you encounter health problems, renting means fewer commitments to unravel
– No capital required. Sometimes the only option if your savings are low, or you prefer not to tie them up in real estate.
During my transition looking at various tax structures I made a point to visit Las Vegas, NV; Phoenix, AZ; Dallas, TX and many cities in Florida. Since my roots are basically East Coast, I decided on Florida. I’ve done a vast amount of research on Florida including visiting a number of cities and towns to make sure I experienced most of the demographics and vulnerabilities unique to each area. This research included:
- Weather Changes
- Sink Holes
- Cultural Activities
Now after saying all of that, you can use and or share my research to make your decision. My focus and your focus may be different. For example, boating and fishing are high on my list and golf and tennis are low. That means I need to be near water. I enjoy concerts and other cultural activities. I need easy access to an airport because for me retirement is about traveling and entertainment.
I am in Florida now and interviewed a couple, Mr. and Mrs. Jacobs, who I’ve known for 30 years. They are really in retirement mode and loving it. Can you imagine a 30-day trip across the United States via train, they did it! Additionally, a cruise through the Panama Canal, they did that too. I spent the day with them and it was very fulfilling to see a black couple that made all of the right decisions for retirement with no regrets.
The publisher of Black Men In America.com stepped into the retirement lane with a fantastic article, “The 10 Worst Mistakes People Make After Retirement,” The item that got my attention was number 9, Being House-Rich but Cash Poor. If you read Part 1 of Straight Talk-No Chaser, I talked about the very emotional part of down-sizing. You spend hours and days getting rid of items given or left to you by a family member. Then you go your retirement location and a real estate developer talks you into ending up with a fantastic new house with a mortgage that is going to be higher than the mortgage you just left. How much sense does that make? Your income has or will decrease but your mortgage will increase. The savings you will have via taxes will vanish. Additionally, some of the items you sold or gave away could now be used.
This is a very interesting area. Finding a moving company can be hard or easy, interview many companies. Below are things you need to be concerned with:
- Don’t agree to share a truck with others
- Don’t provide numbers of items to be moved on line and get the estimate
- Don’t move between June and September
- If you give the company a credit card number, this could be a problem
- Don’t let a company talk you into moving to a new city and putting your furniture into a storage there
- If they are wrapping and packing your crystal(s) take some time to watch the person doing to make sure he/she is competent
- Catalog the boxes you have already packed and number the boxes
- Keep out enough clothes with you to last just in case
- Use your camera or phone to take plenty of pictures of your items
- Ask for a clause in your contract “Not to Exceed” a price above the dollar figure quoted
The New Area
Watch what you agree to, real estate agents and developers are in business to make money they want you to spend money so they can make commissions. Do your homework and do it well. If you know someone in the new area that will help and if you don’t know someone in the area, we all know someone that knows some to help you. Black Men In America.com is a wealth of information, the various columnist on the site are very well connected and they are willing to help. If you ask they will respond, our Publisher Gary Johnson, is a wealth of information and can connect you with the right person to accomplish any task.
I have a meeting with a real estate agent that I met through the publisher. To know somebody or ask who knows who will help.
Stay Tuned: Part 3 will be the final part of this series. I have been asked to expound on the vacation series, so it is coming!!