[USER]

Would you rent or buy? I’m in my early 50s, widowed, house is under contract to sell as it’s too much for me. I’ll get $300k from proceeds and have $1.6 mil in brokerage/401k.

I’m not currently working, have an autoimmune disease.

If I buy, I’d buy a low maintenance townhouse for $450, use the $300k and pay about $1600/month.

If I rent, it’s about $2500/month but I’m liquid and my $300k does generate some income to offset that. What would you do?

[Quintero]

I’d personally buy a duplex, live in one side and rent out the other. The other side pays the small mortgage to where you live mortgage free (in a way).

I’d set it up and time it to where by the age you’re eligible to receive social security (or your late spouses) the duplex is paid off, so that rent now goes towards the household expenses (electric, water, property tax, insurance, etc) and now you’re really living for free.

If you are deemed disabled now due to your autoimmune disease, I think you can get your spouse’s social security survivor’s benefits now, but don’t quote me.

I’d definitely look into that as well

[Lauren]

I would look for something all one level and easy to maintain. Probably rent until you have a chance to see how your life evolves in a new setting and to see if interest rates come back down.

If you are in an area with high property appreciation and want to stay in the new place for at least 4 years then buying might make more financial sense.

The $300k if invested should be able to generate enough income to cover about $1500 a month of rent so you wouldn’t need to pull a bunch from your assets to cover the difference.

[Lee]

In my area rents are decreasing, depending on your market..you could invest the money and live off the interest until house prices go down too then buy.

[Valerie]

I would have stayed in the original place and paid people to help with the upkeep and cleaning.

I am in this situation (48 and widowed) and financially it doesn’t make sense to sell and downsize to something that costs so much more than we paid.

My mortgage is too small and my interest rate is too low.

[Kenneth]

You’ll have enough money to generate 80k a year if you can access the 401K.

Can you work at all? Maybe just to pay some living expenses until you have the money available?

[Sue]

It’s very difficult to downsize in this economy of crazy real estate in Canada prices. Doesnt pay off to do it unless you going into a condo maybe.

[Tracey]

We just downsized to liquidate some cash and to remove all the costly homeowner headaches. We started renting a 2 bedroom apartment and fell in love with the life it offered us.

We have now purchased a very similar condo near by.

We also split our time between the states and Mexico. Down sizing and purging is a process, but it’s has been well worth it!

[Steve]

I’d buy to lock in your housing expenses. Rents will keep going up and up and up. You’re basically financing someone else’s FIRE.

[Mani]

If you are in California, prop 19 may help in buying another home and keeping your property tax basis from the old home (once you are 55 or above).

[Bryon]

If it were me, I would buy a house/townhouse for $400k with cash and make a budget that will work with you withdrawing 4% from investments per year.

That would equate to $60k withdraw per year with no mortgage payment.

If you have any additional disability payments or other income coming in, that would lower your 4% withdraw rate and provide some additional margin for error.

[John]

Buy something smaller with the $300k cash. One bedroom condo?

[Author]

Posts