Q: I am 77 years of age. I owe about $35,000 on my house. I get a monthly $1,500 Social Security check. I also have about $18,000 in savings. I could sell my house for about $225,000. If I do, would it be best to buy a condo or rent until I die?
–A Viewer, Asheville, NC
A: Whether you sell or not depends on whether you like where you live. It depends on whether the house is too much to handle, including the taxes and expenses for its upkeep.
If also depends on whether you have any other income besides the $1,500 to pay for your monthly expenses.
It depends on whether you can buy a smaller home or condo for the cash you reap from your current home. Based on various surveys, the median home price in Asheville is about what your home is worth now. Because you still owe $35,000 you will net (before real estate fees) just $190,000. Is that enough to buy another place outright?
With a condo you may pay less but then you have to contend with a monthly condo fee. Could you afford that fee?
Before you make a decision, talk to a local real estate agent. See what’s available in the area of Asheville where you want to live. I wouldn’t move unless I could pay off the next home with proceeds from your current house. Otherwise moving is a financial wash.
As for renting, you may lower your monthly expenses for housing but, long-term, you face the uncertainty of rent hikes. Again, talk to a real estate agent to investigate the rental situation in your area.
Find out the average yearly rent increase over the last several years. You might also look into a senior living complex. Lots of seniors have sold their homes and moved into apartment complexes open only to seniors, typically people 50 and older. The good thing about that is they often provide a lot of on-site services. My great aunt sold her home in New Jersey and moved closer to family and is living in one such complex. She has a lovely two-bedroom apartment and downstairs is a movie theatre and beauty shop. There are also regular programs and trips for the seniors.
Whichever you decide, be sure to do all your homework. You are so close to paying off your home it may not work out financially to move and rent if (and that’s a big “if”) you can handle the house. That includes maintaining it.