Chris Farrell on owning
Question: Cathleen is 63 years old and she’s a lifelong renter. Cathleen works as a clinical educator in Minnesota, helping children who need constant state of the art care live at home, instead of in a hospital She has no debt, and has one of the best apartment deals around: A two bedroom townhouse with a backyard for $675.
Cathleen has lived in her rental home for thirty years. The big drawback–besides not owning–is that it’s in a neighborhood populated by college kids. Think Animal House. A solid home is available for around $180,000. She could put down 20%. Is assuming such a large debt, especially at her age such a good idea? It would mean she would have to work full-time for at least 5 more years.
Chris: I think you just answered your own question. You would give up a lot of financial flexibility by buying a home. Even if you were aggressive in paying down the mortgage over the next 10 years you would still have a lot of money going into one asset.
You have what most people want at age 63, financial flexibility. Maybe you won’t want to work full-time when your 65 or 66. Right now, you don’t have to. But if you bought a home you would have a lot of stress because you would have to keep working.
This isn’t a knock against owning a home. It’s about being realistic about the cost and the time frame.
(Edited. You can listen to the entire conversation, including the home repairs Tess faced after buying, here.)
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.