When Downsizing, Renting Often Beats Buying

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I must concur with the prior commenters. I am a CPA and must say that I am somewhat surprised at how savvy these commenters are especially sense the author seems to be lacking the expertise to be giving such advice. 6% earnings on investments, hardly a safe investment these days...I could make a fortune if I were able to guarantee that percentage. Also your assumptions seems to be a little misguided, 1. inflation will not effect renters and homeowners the same, on there income sure, but not on the annual increase in rent, it happens like clockwork...I think it always has but a especially with the increase in renters these days. Also I would love to live in this world where you pulled the 2011 equivalent rent per $250,000 home!! Just doesn't make sense. I grew an hour north of San Diego I. The inland empire and currently reside in Missoula Montana and the figures are laughable. I do find it quite hard to believe that Missoula Montana is more expensive to live then the other metro areas you described. I hate to bash your article as it appears you spent a considerable amount of time on it but it appears that there are too many errors for me to do an appropriate critique. At this point I guess I should be glad you're not pushing reverse mortgages on the elderly so they can spend their children's inheritance in Las Vegas or the local Indian casino! Maybe next time you can back some of those statements up with credible facts.

Ryan Bolton of MT 5:21AM May 06, 2013

Ah, just where does $250,000 earn 6%? If Vanguaud can pay me that percentage today without huge a huge risk factor, please contact me. Also, it would neeed to benefit me during my lifetime. I am already old.
And maybe rent has gone up up 25 to 50% national wide since june 2011 but no way are the rental figures near correct. Greenville SC rents $140,000 condos for $1150 up. Yet you claim a $250k house in Seattle can be rented for $819.00. Really? And in what condition. And how does renting a house get rid of yard work.
That is another consideration. Rent will continue to rise, a real problem for a fixed income budget. At least a mortgage at under 4% will stay the same.
Now let's look at your tax numbers. You realize folks age 65+ get a huge tax break on home ownership. Oops! You used the wrong tax info.

Nathan of SC 5:32PM November 29, 2012

IMPORTANT NOTE: If your $250,000 is growing by 6% a year, and you take the proceeds to pay for your rent, then your nest egg is losing value due to inflation... let's say 3% a year. So although the author writes that you get to "keep your nest egg", $250,000 amount depreciates to $190,000 after only 10 years. This your renting power is reduced little by little every year.

Max of MD 12:34AM October 14, 2012

who the heck is getting 6% on 250,000 these days?

Bill of MD 10:47AM June 22, 2011

My grandparents bought their home in the early 70's and sold it in the early 90's. They placed the income n the bank at 11 per cent interest and the interest paid off their rented condo expenses for about 13 years. The term of the investment ran out and the remaining interest was below 6 per cent, less than half of what was made before. Now their rent was eating away at the principle, although they were getting two different pensions. But consider this, my grandparents were almost 90 years old when they passed on. And one word of advice given to me was that because of their senior age, they weren't able to do the things they enjoyed in their earlier retirement years and this caused them to spend less money over the years. Their lifestyle changed because of their age. When they sold their home in the early 90's, they were thrilled because they didn't want the upkeep of the gardens, maintenance etc. All they wanted to do was to go away now and then and have nothing to worry about. And, that they did. God bless them for making great life changine life styles.

joanne 10:31AM June 22, 2011

Are you looking to refinance your mortgage? Best way is to contact at least three to five lenders for input on mortgage programs and rates. Also search online for "123 Refinance" since refinanced my loan to 3.29% with my OK credit history.

kevinandrew99 of CA 4:58AM June 21, 2011