better to buy home with cash or rent ?

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Milo953
Posts: 18
Joined: Thu Jul 06, 2017 1:30 pm

better to buy home with cash or rent ?

Post by Milo953 » Fri Jan 05, 2018 9:28 pm

I have paid off my home but now will be relocating. I always assumed I would buy a replacement home with the cash from the sale of my first home. Now I am thinking if it would be better to invest the proceeds and rent?

About me-
52 y.o. Retired
AA preference 40% bonds/60% stocks
Own home $525,000
Live in Washington State, no state tax, property tax about 1%
New home would cost about $600,000
Renting would be $2,500/month.

Ron Scott
Posts: 1090
Joined: Tue Apr 05, 2016 5:38 am

Re: better to buy home with cash or rent ?

Post by Ron Scott » Fri Jan 05, 2018 10:02 pm

Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

denovo
Posts: 4384
Joined: Sun Oct 13, 2013 1:04 pm

Re: better to buy home with cash or rent ?

Post by denovo » Fri Jan 05, 2018 10:05 pm

How long do you plan on living in this area?
"Don't trust everything you read on the Internet"- Abraham Lincoln

stan1
Posts: 6079
Joined: Mon Oct 08, 2007 4:35 pm

Re: better to buy home with cash or rent ?

Post by stan1 » Fri Jan 05, 2018 10:15 pm

It is mostly a personal preference since you have to live somewhere. Do you want to furnish, decorate, and equip your home to your tastes and be able to do what you want without asking for permission (noisy hobbies, pets)? Or, would you prefer zero maintenance and ability to easily leave for a few weeks or months but with the possibility of rent increases, perhaps more crowded and noisier, and inconvenient moves at the end of a lease?

Some friends of ours sold their home a few years back in their late 60s upon deciding they wanted to live around young people not other "old" people. They rented a nice apartment within walking distance of a 35,000 student university campus and couldn't be happier. Like I said, a personal preference.

Milo953
Posts: 18
Joined: Thu Jul 06, 2017 1:30 pm

Re: better to buy home with cash or rent ?

Post by Milo953 » Fri Jan 05, 2018 10:48 pm

More info-
I plan on living in the home for at least 5 years.
Thank you Ron Scott, the NYT interactive article is very helpful.

knick17
Posts: 81
Joined: Sun Jul 02, 2017 9:39 am

Re: better to buy home with cash or rent ?

Post by knick17 » Fri Jan 05, 2018 10:58 pm

It is a tricky question...owning a home is always an asset and it is hard to shift to renting...however...u can use the cash and invest that money while u rent for a while then plan to buy a house later on..

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Watty
Posts: 14588
Joined: Wed Oct 10, 2007 3:55 pm

Re: better to buy home with cash or rent ?

Post by Watty » Fri Jan 05, 2018 11:25 pm

Milo953 wrote:
Fri Jan 05, 2018 9:28 pm
but now will be relocating.
When you are relocating there are a lot of advantages to renting for a year to find out if you really want to stay in the area and to learn the local housing market.

If you don't have a compelling reason to buy right away then rent for a year and then decide what to do.

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