I am a 52 year old single female with high income looking for a more stable lifestyle. Am I too old to buy a house?

Like many people during COVID, I reassessed what I really want my quality of life to be. I have lived in big cities with a high salary, but I am single and have been intimidated by homeownership having only one source of income (my job).

I am 52 years old, I am a tenant, and I have approximately $ 230,000 in retirement, brokerage and savings accounts. I have reduced my lifestyle and now I am saving $ 5,000 per month to catch up a bit. I have been advised to consider real estate as part of my investment strategy. I have little debt beyond a car bill ($ 300 per month) and a credit score of 750. Should I buy a house or invest in a property like a condo near a resort ?

I aspire to a more stable lifestyle as I get older, and my family all owns homes, so they’re pressuring me to buy something near them in a cheaper market. With remote working, this is now a feasible option. I would consider a 15 or 20 year mortgage either way, given my age.


Too old to buy?

“The Big Move” is a MarketWatch column that examines the ins and outs of real estate, from finding a new home to applying for a mortgage.

Have a question about buying or selling a home? Do you want to know where your next move should be? Email Jacob Passy at [email protected]

Dear too old,

Ah, the great American dream of a single-family house with the white picket fence. This can serve as a valid goal for people to hang on as they dive into their careers and save pennies here and there. As you say, owning a home provides some stability – there is no annoying landlord to raise the rent – and it’s an asset we can pass on to our kids or loved ones, creating an important path towards generational wealth.

But too often, the dream of owning a home also becomes a club that punishes us for perceived apprehensions. Younger generations are being ridiculed for not pursuing homeownership earlier in life, putting aside the fact that house prices are now at record highs, making them less achievable for many. Inevitably, many of us get caught trying to keep up with the Joneses, and it can be a risky path for those who aren’t financially prepared.

A lot of us get caught trying to follow the Joneses, and it can be a risky path for those who aren’t financially prepared.

I read a hint of regret in your letter – and I hope you congratulate yourself on the choices you made. Despite all the benefits of homeownership, it is not something to be taken lightly. You were right in guessing if you had to take on such a heavy financial burden with just one income to rely on. And in most major cities across the country, being a tenant and investing your money in other asset classes is a better bet than buying a home, given the high price of real estate. You have a good credit rating and you are not in debt.

In short, you are doing well. So if you take any of my advice to heart, follow this one: Give yourself a break.

As to whether or not owning a home is important throughout your financial journey will depend on who you ask. How can I know? Well, I posed this same question to a group of certified financial planners and got a wide range of answers.

“I don’t think homeownership is an essential part of a financial journey, although the ability to cover housing costs is,” said Marco Rimassa, president and founder of the financial advisory firm. CFE Financial in Katy, Texas.

His colleague, certified financier Michael Metzger, founder of Lifepoint Financial Design in San Luis Obispo, Calif., Said almost exactly the opposite. “Homeownership is a vital part of the journey to freedom and financial opportunity,” Metzger said, adding that “not only does it help teach good financial habits and a forced long-term outlook, but it does exist. many financial benefits that come with homeownership “.

What should you do There is little sense, I would say, in buying a house just to say that you own a house in your case. Let’s say you buy a condo in Florida to have real estate in your arsenal. Of course, you can use it for a vacation or two every year, but the cost of ownership can add up to more than what you would pay for a unit on Airbnb ABNB,
Of course, you can rent it, but being a long distance owner isn’t easy. You may need to hire a company to manage the property for you, another expense.

Being a long distance landlord is not easy. You may need to hire a company to manage the property for you, which is another expense.

The money that you will end up spending on this condo is money that would undoubtedly serve you better by staying in your retirement savings. Of course, the condo could increase in value over time, but there is no guarantee that it will outperform the stock market within a decade or so until you reach normal retirement age. .

If you want to have a little more variety in your investment portfolio, fractional real estate investing or buying shares of a real estate investment trust might be a better way to get exposure to real estate without all the bells and whistles. burdens that actually flow from it. own a property yourself.

My answer is different, however, if you want to live near your family in a lower cost market. The down payment you would need to buy a home in a place like Kentucky or Tennessee is much less than a place like New York or Boston. These are the regions of the country where it is better to buy than to rent, according to regular studies.

So if you can afford the down payment, plus the cost of a monthly mortgage payment, taxes, insurance, and maintenance, then buying a home is probably the right financial choice. . Plus, living closer to family as a single person can come in handy as you get older and need help in your later years.

Whatever decision you make, I will take it with the same approach you have taken throughout your career so far. You haven’t strayed until this point, so just keep it up. I wish you good luck as we approach this exciting next chapter.

Comments are closed.