Is it bad to be a perma-renter?
I’m an only child. (375k TC, 750k personal NW.) My parents live apart. Mom lives in Europe in a flat she owns. Neither of them feel comfortable to settle down and buy in the US even though they have the $ — for reference, their NW is ~4M. I feel uncomfortable that they don’t own any real estate in the US. Am worried they’ll be priced out. Say, if NW declines sharply. My dad feels like it’s a poor investment and prefers to be flexible as he’s not committed to retiring in the Bay Area. Our family is small so he definitely doesn’t want SFH and condos are not a great investment. Is it safe to be a perma-renter in this situation? What would you do? Dad TC: 450k Mom TC: 0 Parents NW: 4M
I wouldn’t worry about being priced out. The only reason why I’m considering buying a place is to not depend on idiotic landlord rules, like no pets, no customizations and uncertainty with renewal
The place they moved into in 2010 was a brand new luxury apartment and it has increased in price from $2400 to $4000 in 11 years.
TSLA grew more than 100x during that time. S&P500 more than tripled, so real estate isn’t really a better investment
Renting is fine if you are still investing
It’s fine as long as you can continue to pay rent for where you wish to live and as long as you don’t mind moving if you have to move. Consider that rents can go up and you don’t control when your place of residence may go off the market. When you’re young and can land jobs easier, then it isn’t as much of a problem. As you get older, moving quickly can be more difficult. Getting a new job can be more difficult. Keeping up with with rent can be more difficult. And yes, even if you have millions, moving is still a pain especially when it isn’t your choice. My mom retired in her 60s and had to leave her rental because the landlord decided to sell. She sold her house when my dad died, moved and rented since then. She has moved several times since then for various reasons including rental increases and previous owners deciding to sell. Rather than rent again and potentially have this happen again, I bought a house so she can live in it and not worry.
They live in a rental community so I don’t think the place getting sold is going to ever happen. The only risk is the price becoming too high.
It’s a very low likelihood which is good. The problem then is being priced out or the community not being kept up or both.
This thread is so confusing. Sounds like your parents don't want to retire in the bay area and for some reason you're pressuring them using bogus real estate reasons. Looks like they are grown up and can make their own decisions.
This is false. My dad wants to retire in the Bay Area if money were no object. He is also still working for 3-4 more years. My mom is currently taking care of her parents indefinitely in home country and has no opinion. I prefer for my parents to have a home and be settled here, also subject to affordability.
Dude, sounds like your parents are not poor nor dumb. They saved 4M. You're being a bit condescending
No op. Why they should move to SF? That’s a wrong move for retirement. Your mom is in Europe where the quality of life is much better. Their retirement will also be better off in a place where they can stretch their NW. Plus if you don’t have to go to the office, that beach/mountain house is definitely a plus. Additionally, healthcare is litterally better in Europe & lots of places around the world than the US. Your parents can come visit you in SF. Just check the best places to retire for them: https://internationalliving.com/the-best-places-to-retire/
The next recession will wipe out real estate prices by over 50%. I don't know when it will come but what is happening is not sustainable. And if you are in the camp that it will never come then watch out.
If that happens, we could buy the dip.
🤣 wipe out real estate ? Not happening, been hearing doomsday scenarios since 2010. And now over a decade later, it is crazier. Buy now else you’ll regret it when hyperinflation kicks in.