Clint Eastwood: ‘A Man’s Gotta Know His Limitations’

Written by: David Wilkening

Excuse me, ladies, but this headline referencing Clint Eastwood applies to you as well. If you’re looking at real estate, that is.

A simple start to real estate investing at an elderly age is to buy a rental living unit, either apartment or home or condo. But wait a minute: might you be better off renting where you live and devoting all your time and energy to that investment property you own?

Doesn’t this sound kind of crazy? Rent yourself but buy for investment?

It’s no more crazy than the movie’s Dirty Harry telling you about knowing yourself or applying some of his crime-stopping ideas to real estate.

There are circumstances where there are reasons to rent.

For example, let’s say you live in an area with apartment overbuild. Prices are so low that it’s tempting to simply rent to avoid your own involvement in unexpected repairs such as a leaky roof or mundane but necessary maintenance such as cutting the grass. And you know exactly how much you are going to spend on where you live (no unexpected costs such as a midnight plumber). If nothing else, this gives you some peace of mind.

Why else might you want to consider this option?

Take into account your own lifestyle.

Let’s say you are somewhat handy, at least enough to change light bulbs, paint and maybe fix a leaky faucet. If you own your own home, it will take time and energy for you to care for it and also for your rental property. Renting will free you for having to worry about two emergency repair jobs (which can happen simultaneously, horror of horrors).

When you sign up to rent there’s no big down payment. Sure, there may be first and last month’s rent but all in all, the cost is relatively cheap compared to down payments and other costs of buying.

Let’s also speculate you live in a warm climate, typically a retirement area such as Arizona or Florida. No matter how much you like to work, consider that having two swimming pools to maintain is perhaps one too many. Again, a case where you might be better off compartmentalizing yourself by having to worry about only one home.

But to take this even further, renting often gives you access to other sometimes costly amenities as well. A fitness center found in most condos and apartments is invaluable if you not only want to at least maintain the pretense of staying in shape but also if your aging body requires any exercise to heal some muscle or other age-associated ailment.

Remember also that your rental living unit does not require you to pay more taxes.  This is a constantly nagging issue. So how much or what value do you place on your peace of mind?

In no way am I necessarily recommending renting your own home and buying a second investment property. But at least consider it. It might sound crazy if all you are thinking about is the bottom line or the money issue. But I am merely saying you should take into account Dirty Harry’s point of view.


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