The market is strong now. Its a good time to sell. You should look into putting the tenants into a lease/purchase agreement were part of their rent goes towards the purchase down the road at an agreed upon time. Just because a house may appreciate in value doesnt mean yo wont get eaten by repairs, management fees, taxes, etc.
So if the job opportunities are so good there…and you own a house there…then why aren’t you looking for a job there…so you would have only the mortgage of the house to consider in your equation. You say your wife wants a house.
What is the reason for you to be in the Bay Area…if your house location has terrific job opportunities…and my guess is in a less expensive COL area.
You and your wife might want to revisit the housing situation for retirement. Lay out all the scenarios, like 2 alive, wife goes first, husband goes first. While she may not want to stay in an apartment, will she be ok without you. Take care of a big house is a lot of work for 2 people, let alone one.
Re: “So if the job opportunities are so good there…and you own a house there, then why aren’t you looking for a job there?”
During the great recession, I had tried and was not able to land one. I came to the realization that I had to be geographically flexible if I wanted to stretch my work life a little bit longer. This is a reality in the field I have been in: when you are over 40 (some even speculates it is 35!), you are definitely over the hill and “uncool”.
The opportunities may be still good for me if my age were cut in half.
I randomly cut and paste some related info from the Internet and you could tell what kind of uphill battle I may have if I am picky about the location.
"… Larry Page (Google’s founder and/or CEO), of course, has insulated himself from age discrimination by becoming wealthy. The average software engineer will not be so fortunate.
Recent statistics from PayScale Inc., a compensation information company, provide a reminder of how Silicon Valley’s tech workforce skews toward youth in a statistically improbable way*. A sample of median ages at Silicon Valley tech firms:
33 at Adobe Systems Inc.
31 at Apple Inc.
32 at eBay Inc.
28 at Facebook Inc.
30 at Google Inc.
29 at LinkedIn Corp.
32 at Nvidia Corp.
31 at Yahoo Inc."
This is only an issue if you have to work in one of these companies. You are currently living in the Bay Area. Your owned house is NOT in the Bay Area.
You already exceed those ages for the SV companies…so what does that matter in terms of where YOU look for a job?
Have you looked for jobs in your field recently where your house is located? Perhaps the opportunities are there.
I agree with Thumper. You don’t have to work at those companies. My neighbor was laid off in 2009 and ended up at a small company closer to home and she still works there. I even saw her husband working for the same company after got laid off from Cisco.
It is true that these “tiered one” companies should never be my targeted companies. Also, I noticed many 20s or 30s seem to have no problem in changing their jobs in the past year. So the job market today is likely different from the job market when it was 6 or 7 years ago.
My wife actually suggested me to not continue working after my current job. I think we could survive by relying on the modest pensions and retirement savings as long as we move to a lower COL area. But I think we should go back to the topic of this thread.
Thanks!
Right. Plus you don’t have a HS kid living with you anymore. Your overhead should be less now. You probably could actually afford a slight pay cut…especially if your housing costs will be less than the rent you are paying.
Yeah It is true that our living cost should be lower. This is also why we thought we may save a few hundreds dollars every month if we rent a smaller place at a rural area and rent our larger, closer to the city house to some tenants, for the next few years. In not many years, when we decide to collect SS, the situation will be improved again. We could not afford to start to collect at 66, my full SS retirement age. We are looking at, say, 64, to start to collect SS. We know there will be quite a bit reduction if we start to collect at 64 instead of 66. But we got to do what we have to do.
Re: the house, we do not need to sell it in order to extract the money in the equity now, even in the next 5 to 8 years. We could wait before we decide what to do about it.
Housing cost and retirement are related to each other, at least this is the case for me.
@mcat2, one thing to keep in mind about housing as you get older is that living in an area with good public transportation and health-care facilities will become increasingly important. Rural areas can be fine but not if it’s difficult to get to the doctor or the grocery store or wherever, especially as age-related driving difficulties set in, as they almost certainly will. Social ties become more important, too: as your friends and family become ill and die, will you have enough of a remaining support system in the area in which you live? Also consider the accessibility of your house. If it has two (or more) stories or even steps up to the front door, it might become hard for you to stay there.
Also…lesson learned by watching a family member make the wrong decisions. Make your retirement move when you are still young enough to make friends, become involved in the community, become involved in interesting things, become familiar with the area, etc…and establish a support network. Don’t wait until you are older, and these things are not as easily accessible to you.
Thanks for good advices.
This thread seems to become more and more like a thread about housing cost in retirement. LOL. It is likely because the housing cost is a big ticket item besides the health care cost, for someone at my age.
It’s hard to move when one is older. My kids had to help us and we had 6 months to get ready.
Try moving your entire household to a new country ever 3-4 years.
I still have bad dreams about moving and the last time I moved was 26 years ago.
I admire you @GMTplus7, I still have boxes from 2 previous moves that have not been opened.
me too!
My wife had a genius idea in our previous move.
For anything that we could not throw away for the next N years, she packed them, rented a storage unit and put them there. We would never need to deal with them for the next year (except this unpleasant part: We still need to pay the rental fees every month, which she claims is not that expensive.)
The “genius” part is that the rented storage unit (more like a very small air-conditioned room to me) is at our original city. It is a flight or two away before we can take anything from that storage unit.
This guarantees that they are really out of our way for the next N years (N could be 10), unseen, untouchable, and maybe eventually we forget what we have stored there.
Another side-benefit is that she could say that we need to move back to our original city (this is always what she wants) because there is still our important stuff there.
I really could not complain because I needed to join the new company half the country away within a few days (I guess the new employer treated me like a new college graduate who supposedly has only two airline checked-in baggages to take with me) and she did almost all the work. Actually, one of my coworkers who was in his early 30 told me that he essentially lived off two of the baggages, and a piece of mattress without a spring box for his first 6 months there. He camped at the company almost always except sleep time any way. The company loves this kind of devoted employee.)
One of our retired relatives wants to relocate from a high COL area. When I saw this house tour linked by the previous owner on a popular house forum, I shared it along with the info that it sold last year for $175K. Taxes are <$1K/yr. http://tours.tourfactory.com/tours/tour.asp?t=1109033 The relative was born about an hour’s drive from that house but hasn’t been back since about 1962; a lot has changed since then.
There are multiple possibilities for someone who wants a low COL area near tech jobs. One is the Research Triangle Park area of NC. http://www.zillow.com/homedetails/1916-Carthage-Cir-Raleigh-NC-27604/6504205_zpid/ or http://www.zillow.com/homedetails/1010-Rock-St-Durham-NC-27707/49976950_zpid/ That cute new construction bungalow is actually larger than our first house. An area with lower property taxes and (usually good) job prospects is Huntsville, AL and nearby towns. http://www.zillow.com/homedetails/221-Wolf-Creek-Trl-SW-Huntsville-AL-35824/109285762_zpid/ or http://www.zillow.com/homedetails/105-Haven-Ridge-Rd-Madison-AL-35758/92149378_zpid/
The only time housing was a financial burden for us was decades ago when mortgage rates were >17%. Some loans were set up with negative amortization for the first five years, using a lower rate to qualify buyers and to set the initial payments. We paid extra each month just to keep from increasing our debt load. That worked fine until our first child was born and we incurred heavy medical bills then were reduced to one income. We sold that house and moved to one that was significantly smaller.
We’ve moved quite a bit since then. I feel very fortunate to have owned, even when just for a short while, all of our homes. Our current home is much larger than we need, but we paid off the mortgage and I feel guilty complaining about its upkeep. I thought we’d be downsizing soon, but dh is leaning toward remaining here until it’s too difficult for us to maintain.
We put some of our stuff in storage in the US when we initially left for an overseas job assignment. Five years later when my company changed its policy for paying for the storage fees, we decided to remove the stuff.
Turns out the the reason we could live 5 years without any of this stuff was because we could live without the stuff. We ended up tossing or donating ALL of it.