To Buy or Not?

Kristine Hayes

FOR MORE THAN 20 years, I was a homeowner. Like most people, I had a love-hate relationship with the houses I owned. I loved building home equity in the two fixer-uppers I lived in. I loved knowing my mortgage payment would stay relatively constant from year to year. But I never enjoyed yardwork and I hated dealing with unexpected repairs, including replacing an aging sewer line in one house—to the tune of $10,000.

After I got divorced, I opted to rent an apartment instead of buying another home. My decision was due, in part, to Portland’s frenzied real estate market. Housing prices in Portland have been rising at a rapid rate over the past few years and I’d be hard-pressed to find a home—even another fixer-upper—within my price range.

These days, I find myself wondering whether I’ll become a homeowner again, once I retire, or if I’ll remain a renter. I can see benefits and downsides to both.

Down payment: I have about $50,000 set aside to serve as a down payment if I choose to buy another home. If I decide to continue renting, that money would provide me with an additional pool of funds to draw from in retirement.

Staying put: Most rent versus buy calculators suggest buying a home is only financially beneficial—compared to renting—if the buyer remains in the house for at least five to seven years. As a renter, I’d be able to move without having to worry about paying realtor fees and other selling-related costs.

Mortgage payments: Every year, I’m subject to rent increases. While these increases have been modest—at least by Portland standards—they still eat up the annual cost-of-living increases I receive each year in my job. Having a fixed-rate mortgage would help keep my monthly housing costs fairly stable.

Freedom of choice: If I was a homeowner, I wouldn’t have to contend with lease restrictions. As a dog lover, it can be difficult to find a rental unit that allows pets, and units that accept dogs often come with restrictions on size and breed.

Yardwork and maintenance: Living in a rental unit means I don’t have to worry about chores like lawn mowing and general home maintenance. I’m also protected from unexpected, costly repairs that inevitably come with homeownership.

There are other considerations I’ll need to think through as I get closer to retirement. It may be difficult to get approved for a mortgage once I’ve stopped working fulltime. On the other hand, I might relocate to an area where housing is substantially less expensive and be able to pay cash for a small home. Which way am I leaning? Ask me in 10 years.

Kristine Hayes is a departmental manager at a small, liberal arts college in Portland, Ore. Her previous articles include Quitting EarlySocial Insecurity and Site Seeing (Part II).

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