“Dear Steve,
I wrote to you about two months ago stating that my wife and I have a combined income of $150K, live in Long Island, New York and have two college aid kids.
Our home was too small for a family of four six years ago and renovated it, spending $228K on construction.
We have only been paying the taxes on the HELOC which is 2.75% and have a refinanced mortgage of $110K. Combined, my wife and I who are 55 and 52 have $200K in IRAs…that is it and it is scary.
You advised selling the house and renting since my attempts to relocate my job to a state with a lower cost of living was not going to be possible.
We sold the house in four days and got $688K. Great!
Now we have to find somewhere to live. Our eldest is going into his junior year at college and is on his way to becoming independent. Our youngest is starting college in the fall and still needs to feel stability at home.
My wife is not open to renting long term and we are finding it a challenge in Long Island, NY to find something that can keep our mortgage and costs down so we can save more but doesn’t need a lot of work (and money to fix it). Everything here in a decent school district which is good for resale is ridiculously expensive.
Our end goal is to relocate to Florida within ten years. My question is do we buy something in Florida now and rent here or is that not a good choice. Please advise. Thanks for your help.
Rob”
Dear Rob,
When you wrote in last time, here, your plan was you were actively trying to relocate out of the area. You had an active job hunt in progress and were planning to move as soon as you found the job in the area you wanted to move to.
Now it seems you are looking to remain in the area. That’s a big change of plans.
I’m confused why the school district matters, you previously said your kids were in college and since you were moving out of the area why would it matter what school district you rented in?
My suggestion last time was that you rent short-term and relocate. “Considering the fact you are planning to move from the area then working to sell the house now and renting short-term seems to make logical sense.”
“The logical path at this point seems to be for you to prepare yourself for an upcoming move by selling the house and renting. This would give you some flexibility of taking one of those jobs in a different area to change your surroundings and going to experience new things.” – Source
It seems your plans may have changed between your last question and this one. At least that’s how I read it, and that concerns me.
When you now say you want, “…to find something that can keep our mortgage and costs down so we can save more but doesn’t need a lot of work.” That seems to read as if you are trying to buy another house in your area. But that’s not renting?
Let’s not lose sight of the primary concern you had was to build retirement funds and to get the heck out of Dodge and relocate.
If you want to hang around where you are while you continue your job hunt, what about renting an apartment in a nice place on a six month lease?
As far as the purchase in Florida, I remain hesitant about planning for something that far out time wise, for two reasons.
First, I’m just not that much of a betting guy that I’d gamble on what the value and community would be like in ten years if you buy now in Florida. Imagine the folks that did that ten years ago in lovely neighborhoods that became empty foreclosure havens.
Second, if the worry was your retirement funds were low, as you expressed, now is the time to pump those up as much as you can. Feeding those funds now and letting them grow over time will pay off so much more than obligating yourself for a Florida residence you are not going to live in for a decade.
The risks of being a vacant absentee landlord for a Florida property seem like a big gamble, to me.
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Sorry Steve…I can understand your questioning this. I tried relocating to FLA with my company and there are no positions. I tried to get positions in my industry in FLA but recruiters and hiring managers prefer those who live there already. My company knows that I want to go down there but since there are no positions, they offered me something really great where I am. We sold our house because we don’t want to stay here long term and have a mortgage and HELOC totaling to approximately $340K. We can get a nice home and take out a smaller mortgage saving our total debt anywhere from 50K to 150K. Taxes seem to matter here in NY because of the resale and a better school district usually means higher taxes. Rob
The taxes are based on school district…
But if you are renting, you are not paying the taxes, the landlord is. So taxes might impact the rent in a particular area but the individual real estate tax liability would be zero.