patrick.net

MrsW says

and rent a huge house by the ocean for a fraction of the cost it would take to buy a place like this.

yes, but what will your rent be in 2030?

And while I'm attracted to the long-term RV option too, two people living in an RV is no picnic, lemme tell you.

If you're not tied to the US you two can certainly look at living overseas for a while.

Thailand, Costa Rica, heck, even France, Sweden . . .

But you can also buy a cheap place away from job centers and rich retirees, like my favorite, Bellingham:

http://www.redfin.com/WA/Bellingham/1324-Portal-Dr-98229/home/15808731

is just a random place I picked out

$230,000 with 20% down is $180,000 principal, carried for 15 years at 2.5% (!)

This has an interest payment of $400/mo starting out, and a total cost of ownership of $700/mo.

In 2028, or earlier if you pay off the loan, the monthly cost of ownership would be just the insurance, maintenance, repair set-aside, and taxes.

Beats renting IMO since who knows if & when the PTB here try to inflate everything like Japan is now trying.

Rents have more than tripled since 1980:

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA

they're probably going to triple again in the next 30 years.

I'd rather have a known, and low, housing expense than be at the mercy of 2030's landlords when I'm old.

Hey Bill, thanks for the info about Bellingham. I am interested in exploring WA state. They don't tax military retirement income and it is one place I have never lived before. I like living in a small town and it would be great if there was a lake, good fishing and winters that are not too brutal. If we are going to buy something, we like the idea of a cabin and a rural setting.

It would be nice to have a small garden, and some lawn chairs so we could have cocktail hour while watching our grass grow. :)

Yes Apocalypse**** but his only expertise is with a nuclear sub and I think the Navy would notice if one went missing ;)

robertoaribas says

what I said, LOL

A house is security against rising rents to a point; even if you own outright, taxes always go up.

The question is what serves your needs now, and what will serve your needs 5, 10, 15 or even 20 years from now?

Make a list of needs. Make a list of wants. See if you can find a place that meets all of your needs, and most of your wants.

Given that you two are presumably at or near 50. Even if you buy a place on a 15 year note, that puts you a 65 by the time you have it paid off. (Assuming you just don't pay all cash). As you get into your golden years do you want a smaller, low maintenance place (such as a condo or townhome)? Or do you prefer a single family house with a spare bedroom (or two) for guests. Based on the RV comment, I'd assume the former.

If it were me, I wouldn't want all 200k tied up in a single asset. I'd try to put $100k down (or less if possible) set aside some of the remaining 100k for an emergency fund, then put the rest in an investment you feel comfortable with (stocks, bonds, mutual funds, gold etc.). But easy for me to give advice from afar. I don't know the specifics of your situation beyond what you've posted.

The good thing is that, being used to moving around, it sounds that your not tied to any specific location which gives you flexibility. As long as you buy within (or preferably below) your means and find a place that suits your needs both now and down the road, you'll (most likely) be fine.

A frigate is a good idea but it MUST have artillery cannon capable of blowing up at least 500 cannibal anarchists at a pop. Scraping off the barnacles will be a real chore.

If you buy a house for retirement sakes, buy in a place where you can pay off the mortgage in 10 years without having to be a doctor, banker, or big law attorney. Thus, we're taking about being away from the metro areas of Boston, NYC, SF, etc. In upstate NY, $100K gets you into a home, however, the closest cities will be Albany or Plattsburgh, usually an hour's drive.

Rv's depreciate instantly and the maintenance always costs a lot. I'd buy a 2 bedroom townhouse in Oregon or Washington and take trips in a van. Less gas and maintenance. If one of you gets sick chances are you'll need some place stationary. Space rent in most RV parks are expensive. You need a home base to call your own.

I've thought about buying a small used motor yacht (100k cost) to live on since I am single and this has plenty of room for one person. Cheaper than rent and cheaper than a home in the bay area. Thoughts?

postbubblesucess says

Rv's depreciate instantly and the maintenance always costs a lot.

Same goes for houses.

The Professor says

Good advice and not a single expletive or personal attack

He has some good advice. I like it best when his ideas are free from the personal stuff, too.

@APOCALYPSEFUCK is Shostakovich: I think your picture is funny, but it make it difficult to read P.net with my son in the room. I will be delighted when you have moved on to the next funny picture.

I was going to tell you how funny you were above when my son walked in and asked what that lady was doing. I slammed the computer shut and handled things over here. That picture is a little troublesome for those of us who occasionally read with kids in the room.

BG

Ceffer says

A frigate is a good idea but it MUST have artillery cannon capable of blowing up at least 500 cannibal anarchists at a pop. Scraping off the barnacles will be a real chore.

I like how you specified "cannibal anarchists" as opposed to the Green Party and liberal democrat cannibals. Obviously the most rabid cannibals will be the anarchist type and not the democratic socialists.

SJ says

I've thought about buying a small used motor yacht (100k cost) to live on since I am single and this has plenty of room for one person. Cheaper than rent and cheaper than a home in the bay area. Thoughts?

I know people who lived on boats and loved it, but apparently it has a limited charm because they all eventually wound up in homes. One guy, who was an experienced sailor and sailed all over the world and lived on boats for years, wound up retiring in Sierra Vista, AZ, pretty far from the ocean.

As a student or ten year or so horizon, it would probably be fun.

A frigate nuking cannibal anarchists would probably be even more fun.

@Ceffer, agree 100%. For me, I'd want an airpark home on an airstrip with my own plane and hangar along with a sailboat for weekend fun. Unfortunately, these homes don't exist anyplace in the RBA. So once I have a job where I am not stuck in the bay area, then I can buy an airpark home.

MrsW

Brave and excellent questions. I'll add my piece.

The togetherness issue is definitely going to take some adjusting to; desire ebbs and flows in any long term commitment, and those trough periods have probably been mitigated by all of MrW's away games. Just remember that you are two different bags full of different chemical mixtures firing at different rates at different times and susceptible to different triggers. It is NOT always going to be a placid lake, especially with an ex-military man. There will be hurt feelings and feelings of rejection now and then; but loyalty to one another is, in my book, one of the finest and most challenging and, ultimately, one of the most rewarding traits that a human being can aspire to possess. Happiness takes a hell of a lot of work, and, strange as it sounds, it isn't always about having fun.

Now, that leads me to your next quandary; to buy a house or not to buy a house. I don't see why a nice trailer wouldn't fit the bill. I know, I know -- American's are brainwashed snobs when it comes to trailer courts, but the fact is, there are some really plush ones out there, outfitted as nicely as any stupid condo. I lived in an RV for a few years after my first divorce. I remember thinking how it marked the lowest point for ol' JC when I first signed the lease, but -- and I say this in all honesty -- those were some of the happiest, most carefree days of my life. I kept a tight ship, and had mostly ex-military and senior citizens around me who did the same. (Here's a tip: shop for a trailer court where there are the most American flags waving.) I spent many a night on the weekends wrenching on my bike out in the carport, listening to KMET and drinking good suds with some of my neighbors who are still close friends to this day. I kinda miss it. Simpler times...

I think if I were you, I would buy two trailers. One for living in and one for your getaway/work/hobbies. They could even be in two different parts of town. You two will need your space, trust me. A lady needs some good quality ME time, and so does Mr. W. I also recommend planting things.

MrsW says

My husband and I are approaching retirement in the next 5 years--him from a 30
year career in the Navy and me from 28 years as a freelance marketing writer.
Due to life in the military and constant moves we have never bought a house. We
have a house fund that we add to every month that will be around $200,000 by the
time he retires (he will retire about two years before I do). We are now
thinking of getting an RV and trying that full time as the kids will be gone and
hey, they can't move back in if we live full time in an RV. The thing is, we are
wondering if we need to buy a property for security in our old age. We have
tried to buy homes in the past, but could never justify the risk as we never
stay put long enough. We will soon have the option of staying in one place, but
that seems a bit scary--putting all of your house savings into one location--how
do you possibly choose the best one?

There's numerous things in that paragraph that you wrote but needs some consideration. If your hubby is retired military, to utilize and maximize health and other benefits you'll need to be somewhat close to a military base, and that gets more important and the need for being closer gets higher as you age.
Have you ever known what the fuel consumption is for an RV, and the costs for licensing, insurance, and maint? it's not cheap by any means, and hopefully you don't break down on the interstate late at night with a big RV, because the large size dictates the size of the tow truck, and it's not cheap at all. Plus, you'll need a car to tow behind it to be able to commute to buy food and sight-see.
You'll also need a home of record for mail and legal documents and bank accounts. A lot of munincipalities have ordinances against parking RVs, and some require an enclosed building for it. Oversized shed or storage, neither are cheap and must be factored into the cost equation.
And living in multiple places comes with upkeep unless it's a condo or an apartment.

Of course all the above is irrelevant if you have children that can store your RV for free and do the maint on it, while also providing you a free place to stay and you can use their mailing address, but they may tire of that REAL quick.

The Professor says

upisdown
says

Of course all the above is irrelevant if you have children that can store
your RV for free and do the maint on it, while also providing you a free place
to stay and you can use their mailing address ...

Awesome Idea! Free parking and you can spoil the grandkids!

Those big and gaudy RVs are called rock star motorhomes for a reason, because they are the only people dumb and rich enough to afford them.

if you never buy a house, maybe you'll better off financially, than if you had bought.

research has shown renting over a very long period of time (several decades) and investing the difference in stocks had a much larger return than putting it towards a mortgage. the problem, as RE bulls are wont to point out, is that most people do not have the discipline to invest the difference well.

SJ says

I've thought about buying a small used motor yacht (100k cost) to live on since I am single and this has plenty of room for one person. Cheaper than rent and cheaper than a home in the bay area. Thoughts?

I'm not sure these things are very healthy - http://www.nbcnews.com/id/14011193/#.UWN6cxysiSo

Ain't nuttin' to it, but to do it.

Tim Aurora says

mell says

postbubblesucess says

Rv's depreciate instantly and the maintenance always costs a lot.

Same goes for houses.

House is not a depreciating asset.

Sure it is. Without repairs and property taxes it will either turn to shit or taken away from you. The land it is built on might not depreciate, but the house surely does and you have to hope that it will be offset by the gains on the appreciation of the land.

Buy where you don't have to make payments and property taxes are low so you can feel comfortable at old age. Making payments and risking it all is not good at any age, especially in retirement on fixed income.

Don't rush into it also, take your time, research a place you both like and feel comfortable with. Maybe rent in the area for several month just to see if you like the community and the lifestyle. A nice suburb with conveniences nearby is a good choice provided it pencils out financially.

You just don't want to end up in middle of nowhere, in places like that healthcare tends to be very expensive due to non existent competition, and boredom kicks in fast when there is nothing to do.

I just happened to think of some other important issues regarding retired military pay. There are 23 states that don't tax retired military income, and many states have numerous veteran/retired military exemptions and discounts for things like drivers license, fishing license, tax on auto purchases, etc.

Here's an example:

http://journalstar.com/news/state-and-regional/statehouse/senator-eyes-tax-exemption-for-military-retirement-social-security/article_44f0c5fb-abac-520a-be44-66f300a1e618.html

Couple of thoughts....
First of all, ever bought an RV? Some can be as much as a house. A house with an engine and transmission to maintain and what's more, you're probably looking at anywhere from 5-10MPH Max. These are not cheap to own. My parents owned ordinary campers and even they were not the cheap to care for.

Secondly, being retired military I'm going to guess you all are not actually that old and nowhere near actual retirement age. So in that case, how viable is it to travel around for decades in a gas-guzzling bus sized, depreciating mobile home?

Lastly, As someone from the Southeast, 200k basically will buy you a decent house on some land outright with probably some money leftover. If the house you bought was totally paid off, then you would then be in the same shape as most other people who are either approaching retirement or retired and thus you would be in decent shape. But California? Aint gunna' happen unless you move wayyy out in the sticks.

JodyChunder's post really make me reflect over my coffee. I think it might be wise to get a cabin and an RV. I understand that they both need maintenance and upkeep costs and we the types to buy fixer-uppers for both--we are both quite handy DIY people. I have seen the RVs that cost as much as a house and want no part of that. I was thinking more a classic canned-ham type trailer pulled by a pick-up truck.

And this is where we get to wise JodyChunder and the fact that Mr.W is a big guy and we have never even shared a bathroom or seen each other's dirty laundry. I was thinking we were just going to have to learn to adapt and get used to all of this togetherness, but what if I am in charge of the home base and he is in charge of the camper? There are cheap military camp sites all over the country. He might want to set out by himself a bit and I can fly to meet him places. It's a thought.

Also, someone else pointed out the fact that we are not really retirement age--we will be 50ish when this all goes down. And Mr. W was saying something the other day about how we should each earn $5K a year to take advantage of some retirement account thing. So I can see me waitressing for a few months a year and he could give guitar lessons or something like that. Remember we are the kind of people who fish and make our own bread. Our favorite entertainment is drinking beer around a fire, so we don't need too much money.

I agree with the idea someone said about living in a more rural setting to save money--is the south cheaper than rural WA state? We are both originally from MN and have accents and a strong preference for bland food. I like the idea of southern hospitality, but not sure if we would fit in.

CA is a lovely place, but it is not in the cards for a military retirement. I am thankful we have gotten to live here for six years as it is.

And FortWayne, I am taking your idea of not rushing into anything seriously. I think we need to rent an RV/camper and have Mr. W take a shower in it before we commit to anything.

I think before you get too much further into the idea of an RV or camper/ motorhome you both need to do some research about the realistic costs, maintenance, and various types of hidden fees and expenses within. First of all, you mentioned a sort of classic "canned ham" type of camper or RV. Might want to check to see how much these things cost first. They are wildly popular these days and some go for as much or more than a new camper. Additionally, whether its a RV or camper, both will require either the large gas-guzzling engine installed in the RC or a large truck to haul it- which will also guzzle gas. I'm just saying this because me and my family grew up going camping in campers and there was always something to fix or replace on them. Remember that campers are usually simply plywood boxes with a think metal sheet covering. They're relatively fragile things.

The mention of the bathroom bears repeating too. I recall one time my Dad had to fly back to the office while we were on vacation camping for a brief meeting. I stayed behind with my Mom and Brother. It was a 30 foot camper and had a smallish Bathroom. Let me just say that after a week in that thing we were REALLY ready to leave. Perhaps consider renting a camper for a week or two on the road and see how it works out. There are places you can rent these and so it wouldn't be an expensive commitment just to try.

Lastly, if you're in your early 50's then you are nowhere close to retirement age. You're looking at potentially another 40+ years of having to financially support yourselves. Now- as someone who has retired military in the family, I know that the pensions and healthcare can be very good. So perhaps with your situation it would be different. But I am overly cautious with finances. My usual reaction to any plan is to think of the worse case scenario: What if one or both of you didn't have a job?

But anyway, these are just my opinions as I don't know all of your financial details. In the end do what makes you feel comfortable but do the research and put together a plan.

Hi future retiree,

Well, you sound close to my husband and I. We are currently doing something similar. We rented all our lives. We have around $220K in savings/cash. As well as over $500K in Retirement funds. We also have 2 pensions. Needless to say, we still will be on a "fixed" income too. So we have decided to buy is the only way for a fixed income.

We have been through the whole financial calculations many times. Rent is a variable in cost. If you plan to live at least 20 more years, which I hope you do, then just look at rent 20 years ago and you will see what I mean.

We are looking out of the cities, more to the 'country/mountain' areas. Finding a community with good senior assistance, hospitals and transportation. Stay away from a RV that has land to "rent" underneath as you will find the same problem with rent increases.

We are putting 20% down and a 30 year loan. With us looking for no more than a $230,000 home (and that is a nice size for the area we are looking), our mortgage plus interest is only about $850/month. Even for 30 years, that is a very low "rent" and then it ends. If we come into some money, we may pay it off. but then again, we will have $170,000 left (after down/closing, etc) to use for moving expenses and a "cash/liquid" account.

Believe me, we stay up nights as most do, stressing if we are making the right decision. But we just found out our Landlord is selling our building, so there you go, we may have to move (and we are OK as we can get the house); but it gave us more support that buying is the best.

Just keep to your budget and do not stray from that; and do leave yourself some liquid assets for the unexpected repair, etc.

Good luck and I wish you the very best!

JodyChunder says

Now, that leads me to your next quandary; to buy a house or not to buy a house. I don't see why a nice trailer wouldn't fit the bill. I know, I know -- American's are brainwashed snobs when it comes to trailer courts, but the fact is, there are some really plush ones out there, outfitted as nicely as any stupid condo. I lived in an RV for a few years after my first divorce. I remember thinking how it marked the lowest point for ol' JC when I first signed the lease, but -- and I say this in all honesty -- those were some of the happiest, most carefree days of my life. I kept a tight ship, and had mostly ex-military and senior citizens around me who did the same. (Here's a tip: shop for a trailer court where there are the most American flags waving.) I spent many a night on the weekends wrenching on my bike out in the carport, listening to KMET and drinking good suds with some of my neighbors who are still close friends to this day. I kinda miss it. Simpler times...

JC I agree with you completely. I have been thinking how I am going to convince the boss to do this, but the economics of it are really unassailable.

mell says

Tim Aurora says

mell says

postbubblesucess says

Rv's depreciate instantly and the maintenance always costs a lot.

Same goes for houses.

House is not a depreciating asset.

Sure it is. Without repairs and property taxes it will either turn to shit or taken away from you. The land it is built on might not depreciate, but the house surely does and you have to hope that it will be offset by the gains on the appreciation of the land.

Amusing sidenote. Records on my house go back approximately 200 years. First sales records were for commodities (e.g. an unspecified amount of "tobacco and cask"), but the earliest record in USD indicate the purchase price was $43.16.

About 6 years ago, I converted a closet to a bathroom, tearing up some of the original heart pine floorboards. I ended up selling these to a reclaimed wood company for $130.

Judging by the amount of original flooring I have left, I estimate the floor alone has 10X the value of the original purchase price for the whole house & land. Ironically, the floorboards would have been worth more if they had not been resurfaced, and instead been left, neglected to rot over the centuries. This also says nothing about the value of the original bricks, ax hewn beams & other original components, most of which have been basically left to rot on their own accord.

Now granted, on a practical timescale, I agree with your point 100% and yes, materials used for building today are nothing like they were hundreds of years ago. Still, whose to say the 1960s pink, asbestos tiles in your grandmas bathroom wont be worth more than the whole house in the year 2139?

We are renting and saving the difference too and no way near retirement. I work for a structural engineer and an architect so I get lots of emails about alternative homes.

This idea kind of caught my eye over the years. The tiny house blog shows design options. My impression is that people primarily use these tiny houses to stay in one place for the most part but they can be moved if you want to move them, or you can park them permanently on your land assuming local ordinances allow it. I think they are just cool ways to live minimally. If your hubby is handy you can build your own. You could use this as a primary of secondary home. They do seem small but if you keep in mind that people in New York City live in 300 square feet this is no big deal if it is organized properly. IMHO this is a way to have your house and your money at the same time. http://tinyhouseblog.com/

Oh i forgot to mention that you can build some of these tiny houses yourself for $20,000.

Some of those "tiny houses" look basically like the tool sheds you can buy at big box stores for a coupla' thousand bucks.