# Investing for Fixed Income or Buy Condo?



## grapenutpudding (Oct 24, 2017)

Has anyone wrestled with this situation? I recently sold an apartment and have money sitting in bank account. I am renting and don't have much income (not on SS yet, am 61), although I am looking for part time work. I consulted with money guy at Schwab and he said it would be fairly easy to receive 1K/month if I invest fairly conservatively in stocks/bonds. Some risk but not too much he thought. 

So now I wonder if it's better to buy a small condo and pay cash and just be responsible for HOAs and taxes rather than use the fixed income to pay rent which might end up being almost 1K/mo.


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## Aunt Bea (Oct 24, 2017)

For me it would depend on the potential for appreciation of the condo.

Where I live condos are relatively flat and don't appreciate like single family homes.

If I could rent for less than the cost of the homeowners fees, taxes, and $1,000.00 per month income combined then I would not buy.


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## Knight (Oct 26, 2017)

A lot of unknowns that only you can think about. Like does where you live tax soc. sec. ? https://www.thebalance.com/states-that-exempt-social-security-3193304
Same goes for pensions.


Then there is the depletion of money at age 70 1/2 due to Mandatory Required Distribution. 


Health a major consideration, where you live can make a difference for access to health care. 


Retiring is a big step, living on a fixed income that due to inflation can deteriorate over time if not planned well happens.


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## Cap'nSacto (Oct 26, 2017)

I agree with Aunt Bea; only invest in a property that will appreciate or at least hold it's value. Those are fairly easy to find in my area, but almost impossible only 20 miles from here.


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## mathjak107 (Oct 27, 2017)

well as long as we are only investing in condos that go up , how about only buying stocks that don't go down !


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## Knight (Oct 27, 2017)

Investing in property in this case the op is considering a condo. Investing makes it sound like there is an expectation of value increasing. That seems to imply the intention to sell for a profit. The funny thing about property is when what you buy rises in value to the point you want to sell, so does other property that you may want to buy. Some research for how long it takes to make the kind of profit hoped for in any given area would be my 1st. consideration. That and if the plan was to buy & live forever where the purchase was made what factors affect the cost of living there? 




There was nothing in the original post about income other than [don't have much income (not on SS yet, am 61] Relying on SS as an income source is something that has people already doing that worried. With the cost of living,taxes and condo maintenance fees increasing as time goes by & the projection of a 25% reduction in SS payout sometime down the road. If it were me I'd be into some serious reserch if I were 61 years of age.


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## grapenutpudding (Oct 27, 2017)

Thanks for all the input. I have to say I'm more confused than ever. It probably is something I have to think long and hard about and do research on which I'm not too good at. I am looking for work but harder at this age. I have money in bank from previous real estate sale and I am just not sure whether to buy another place to live (pay cash on smallish place) and then only worry about dues/taxes. Otherwise if I use the money to get fixed income I have to pay rent which is high most everywhere and keeps going up (although so can dues/taxes).


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## Knight (Oct 27, 2017)

grapenutpudding said:


> Thanks for all the input. I have to say I'm more confused than ever. It probably is something I have to think long and hard about and do research on which I'm not too good at. I am looking for work but harder at this age. I have money in bank from previous real estate sale and I am just not sure whether to buy another place to live (pay cash on smallish place) and then only worry about dues/taxes. Otherwise if I use the money to get fixed income I have to pay rent which is high most everywhere and keeps going up (although so can dues/taxes).


Research isn't all that difficult. 1st question I would ask myself. Do I have to live where I live now or would relocating to a place that has a lower cost of living work out. Then use google to read about various places in America where seniors fare better. 

Next would be to look into investing for an additional income. What amount would be enough to supplement SS and still leave a nest egg. 

The closest I can relate to what you have posted is what a neighbor on mine did. He & his wife  both lost their jobs. Joe had applied for SS disability and luckily got it. His wife had some savings and was about 6 months away from regular soc. sec.  They sold their home for a modest profit and invested that money. Meanwhile they had applied for and got accepted for low income senior housing. 

Hint for searching 

https://www.seniorliving.org/lifestyles/hud-senior-housing-programs/

The trick of searching is to try to figure out what wording to use for what you want to search for.


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## mathjak107 (Oct 27, 2017)

there is nothing wrong with renting and investing elsewhere . heck over the years our investments made enough to buy 2 houses today even after subtracting out taxes and all the rent we paid since 1987 .

so renting and  investing is not a bad thing . in fact had we owned i never would have had the money to invest in the commercial real estate we bought in to . the money was only available to us because it was not tied up in a house .

we are looking in to buying a co-op here in queeens in nyc .

the issue is that it will cost us 6k less to buy than to rent , HOWEVER  we will be giving up 12k on the  income on the money we would use to buy .so buying would hurt cash flow by 6k


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## Knight (Oct 27, 2017)

From ops post

Quote
"have money sitting in bank account" .

The concept of money working for you instead of sitting in  bank has to change. Think about what mathjak107 posted about rent vs. own & money flow. It's not to late to spend time learning how to make money work for you.  Sure it takes time and effort but since you said you are looking for part time work there must be at least 1/2 hour a day you could devote to educating yourself about investing and what you would be comfortable with doing.


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## grapenutpudding (Oct 27, 2017)

Knight said:


> From ops post
> 
> Quote
> "have money sitting in bank account" .
> ...



The money has only been sitting there for about 8 months but I know it either has to be put to work for me or go towards buying another place to live. I do have some other money invested in stocks/mutual funds which I don't want to touch (and some of it is in IRA). I think I get anxious when I start to think about all this and then can't really think clearly and go round and round in my mind. This is helpful to hear about what others have done. Thank you.


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## grapenutpudding (Oct 27, 2017)

mathjak107 said:


> there is nothing wrong with renting and investing elsewhere . heck over the years our investments made enough to buy 2 houses today even after subtracting out taxes and all the rent we paid since 1987 .
> 
> so renting and  investing is not a bad thing . in fact had we owned i never would have had the money to invest in the commercial real estate we bought in to . the money was only available to us because it was not tied up in a house .
> 
> ...



Sounds like you've invested well! So what are you doing to do....buy the co-op or keep renting? I owned a co-op in Seattle and I liked that kind of ownership. It's hard to think about renting again and it's shocking how high rents are for something decent. But not sure I really want to buy a condo...but will look around and see. Are the co-ops in your area a good buy?


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## grapenutpudding (Oct 27, 2017)

Knight said:


> Research isn't all that difficult. 1st question I would ask myself. Do I have to live where I live now or would relocating to a place that has a lower cost of living work out. Then use google to read about various places in America where seniors fare better.
> 
> Next would be to look into investing for an additional income. What amount would be enough to supplement SS and still leave a nest egg.
> 
> ...



Thanks for the website reference. I do know how to search but sometimes end up in a muddle...too much info and decisions to be made and I just go round and round. I have also applied for low income senior housing but there's a 3-5 year wait at least in the area I targeted. I will check this site out too. Thank you.


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## Aunt Bea (Oct 27, 2017)

grapenutpudding said:


> Thanks for the website reference. I do know how to search but sometimes end up in a muddle...too much info and decisions to be made and I just go round and round. I have also applied for low income senior housing but there's a 3-5 year wait at least in the area I targeted. I will check this site out too. Thank you.



If the goal is to go into low income senior housing I would definitely rent until your name comes up.  The 3-5 year waiting lists touted for senior housing tend to move more quickly than people are led to believe.  Many people that sign up for senior housing make other arrangements and don't care to move, go into assisted living, skilled nursing facilities or die before they reach the top of the list.  When a vacancy in senior housing does come up and they actually start making calls names tend to drop quickly from the list.

Good luck!


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## grapenutpudding (Oct 27, 2017)

Aunt Bea said:


> If the goal is to go into low income senior housing I would definitely rent until your name comes up.  The 3-5 year waiting lists touted for senior housing tend to move more quickly than people are led to believe.  Many people that sign up for senior housing make other arrangements and don't care to move, go into assisted living or skilled nursing facilities or die before they reach the top of the list.  When a vacancy in senior housing does come up and they actually start making calls names tend to drop quickly from the list.
> 
> Good luck!



Thanks! I want to go back to my home state and have applied there but applying as a non resident means a longer wait time supposedly. But as you say, it may be sooner. : )


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## Aunt Bea (Oct 27, 2017)

grapenutpudding said:


> Thanks! I want to go back to my home state and have applied there but applying as a non resident means a longer wait time supposedly. But as you say, it may be sooner. : )



If you are not working and you want to return to your home state I would start looking for a market rate apartment in your preferred location and move now, none of us know what the future holds and we should all try to live the best life we can imagine.

Good luck!


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## grapenutpudding (Oct 28, 2017)

Aunt Bea said:


> If you are not working and you want to return to your home state I would start looking for a market rate apartment in your preferred location and move now, none of us know what the future holds and we should all try to live the best life we can imagine.
> 
> Good luck!



Market rate apartments are too expensive there - hence my wondering if I should try and buy a small condo. I also always thought about "ending up there" and was going to wait a few more years until I got into housing there but I also understand your point and we really don't know what the future holds. I recently moved here but don't like it too much and either want to go back to where I moved from (but a different area) or go to home state. Too many decisions without much clarity. Thank you! You sound very sensible!


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