Q: I am almost 61 years old and single. I moved to Baltimore and would like to buy a small two-flat to live in for the rest of my days. I am able to pay cash, and I don’t need a mortgage.
I recently read online that I am considered too old to buy my first house. Should I rent or buy? I really want my own garden and to have my own space. I am tired of living by other people’s rules. What do you think?
A: How frustrating. After more than 25 years of advocating for everyone to have the right to buy a first home, we’re horrified to think that someone on the Internet thinks you’re too old — at any age.
We think you’re never too old to buy your own home and live on your own, so long as your health and finances permit it. You seem to have your finances in order, as you can pay cash for the home you’d like to buy. Moreover, you’re thinking about buying a two-flat, which will provide additional income in retirement, possibly in excess of what you’d earn on that cash in the bank. Smart move.
Although you may have never owned a home, you have lived in many properties over your life. Owning requires more responsibilities relating to the maintenance and upkeep. But you can make your own decisions and not have to worry about a landlord who doesn’t want to renew your lease.
You should be familiar with many of the expenses and costs of renting a home and have seen the many issues that can and do go wrong with homes, apartments and townhouses you’ve lived in. When you become an owner, it will be up to you to fix the roof, heating, cooling, plumbing and other parts and systems in the home.
If you are up for that and the other challenges of owning investment property, by all means go ahead. You might want to build a cadre of trusted professionals who can provide a variety of services: landscaping, snow removal, plumbing, electrical and general maintenance or contracting. Knowing who to call when something goes wrong is more than half the battle.
Many people have asked us the same question over the years. The issue to think through isn’t the age or stage in life where you are today. You need to understand how flexible and/or appropriate your home will be as you age, as your needs and the needs of your family change, and how you’ll know when the time is right to sell and move if the home you purchased is no longer suitable.
When you’re young, you might feel comfortable owning and living in an apartment on the fourth floor of a walk-up building. Later in life, walking up those stairs might not feel good anymore. Instead of looking at it as having extra steps in your day, every step might be painful or even impossible to manage. Some families are fine raising their children in northern climates but then retire to warmer locations.
At 60, you’re old enough that you should evaluate your health and physical considerations and think about how you’ll manage the property as you get older. You might find you’ll remain quite healthy into your 70s and even 80s. If you are, you should be able to handle most of the issues that come up and can tap into that trusted group of professionals to take care of repairs and other improvements that are needed over time.
One final thought: Being a landlord means you have to find tenants on a regular basis; and even with the best of luck, you might find a tenant who doesn’t pay you on time (or at all) or doesn’t like abiding by your rules or impedes the life you want to have in your own property.
Having tenants carries with it the risk that you might get a bad tenant and the benefit that you might have a great tenant. You’ll need to do your homework to make sure you end up with the right person and/or family to share your two-flat. Then, hire a good real estate attorney to draw up a contract you can use that clearly states the rules of the property. For example, will you allow the tenant to rent out the property by the night via Airbnb or VRBO? And what will happen should the tenant break those rules?
Happy house hunting!
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact them through her website, ThinkGlink.com.