Taking out retirement funds to buy a second house for rental
My husband is retiring in Jan. We both have ss and a pension. He only has 150,000 in thrift savings. He was going to take a monthly draw to pay our mortgage . We need a bigger home. We owe 60,000 on a home worth 180,000. We are thinking about taking out 40,000 of savings to put on a second home worth 200000 and renting out our first. Does that make sense? Or adding on to make or mortgage 160,000? We would rent it out for about 1250-1300. Everything is new so we don’t anticipate any major repairs
Terry Says
No. That plan doesn’t make ANY sense at all to me. You need to make a retirement spending budget. Why do you need a larger home in retirement?? If you really want to buy a new home, sell your current home and buy the new one — BEFORE he retires. Once he is retired he will not qualify for a mortgage!! So do this in the proper order. Rental real estate is not a proper investment to start at this stage of your life, especially since you have so little saved for the other expenses (like healthcare, for sure).
