So, I bought a house about 8 months ago and I don't really regret this decision, but I do have a lingering question. When I was deciding if I wanted to buy, I remember a lot of people arguing that buying houses is generally a terrible investment and posting elaborate calculators for whether or not it made more financial sense to rent or to buy (almost always seemingly coming out in favor of renting). None of these calculators that I saw ever seemed to factor in the benefit of having a paid for place to live in retirement. Why is that? This is one of the main reasons I want a house. (The other is that I just want a place to live that's mine.)
My mother as an example would be much better off if she hadn't sold her paid-for house to move back to the city. Taxes+insurance on her 3 bedroom house are less than she pays on rent for her 2 bedroom apartment. And this checks out for my house in the city as well. The taxes+insurance part of my payment is currently about $8000 a year (heck throw in $2000 a year for hypothetical surprise repairs). So if I owned my 3 bedroom house outright it would cost me about 8-10K to live in it a year. Meanwhile a 1 bedroom apartment in my area is $800+ a month, which is breaking even at best for a much smaller space. If I moved back out to the country (which I plan to do in retirement) I think prices would be considerably less than that. Plus, my state (Texas and I assume others) has a tax exemption for senior homeowners that brings the tax rate down even lower than what I currently pay.
Why is this particular angle not talked about so much? I see a lot of people talking about selling their house to finance their retirement, but it doesn't seem like having a paid for house is a retirement goal unto itself. Should it be? Unless you live in a very hot market, it seems like the price of insurance and taxes are going to stay much more stable than rents which is much friendlier to a fixed income.
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