Five things to do now if you think you’ll never own a home
Wisdom from "financial advisors" and "economists" for free
A growing number of New Zealanders are facing the prospect of renting in retirement.
Here at Fluff, we spoke to our resident
landlords financial advisors and capitalists economists and asked what retirees should do if they don't own a home.
The number of renting retirees is expected to increase to 600,000 by 2048. But what do you need to know if you think you might still be forking out to a landlord when you’re no longer working?
If you can’t buy a home you should think about buying a home
Economist Dick Richwhite said it's important that all New Zealanders buy a house in order to have a house.
“I mean the key thing is, if you think you'll be renting for life you should consider not renting for life.”
You should use the $200,000 you have to buy a house
“If you have $200,000 you should use that $200,000 to buy a house,” Richwhite says.
This comes as a blow to many New Zealanders who were holding onto $200,000 to buy a parrot that can sing sea shanties.
Richwhite said the key to not renting for life was just having many hundreds of thousands of dollars and using that to buy a house.
Instead of investing buy a house
Jim Jubbs, founder of KiwiSaver, said buying the most expensive house you could afford and paying it off as quickly as possible, was the best financial decision most people could make. “If you can do that that’s what you should do.”
Totally unrelated to this, a record number of people are making withdrawals from their KiwiSaver funds due to financial difficulties.
Of the 6400 withdrawals made throughout December, more than half of them were for hardship.
If you can’t afford a house live in a tiny house that is also a house
Financial advisor Bill Paement suggests that if life-time renters couldn’t afford their own house they should consider a tiny house.
“So if you have five children and you’re living hand-to-mouth just instead of buying a big house in the area where you work, you could give up your livelihood and just use a hundred thousand or whatever to buy a tiny house. Oh and buy some land. Or just ask if you can rent some land. Oh I guess that’s renting. But the house itself is yours.”
Paement said that the cost of land shouldn’t stand in the way of buying land.
“Tiny Houses are small. Most first time home buyers want to buy a 15 bedroom house. But the advice we give is, why not a small house? A three-bedroom flat?”
“It’s about lowering your expectations. Instead of a three-bedroom house try a studio which is only three bedrooms less than a three-bedroom house.”
Ok fine a bus then. Or a bus stop?
Renters needed to find somewhere to stay when they are old, Paement said.
“Perhaps an inheritance will come from a parent. Perhaps one of their children can put a minor dwelling on the property. Perhaps they can live in a bus….”
“Perhaps a cardboard box? Perhaps you could sleep in a papier-mâché effigy of your landlord? Perhaps you can just wear a large hat to protect you from the elements?”
Many of these quotes are real it’s up to you to figure out which ones lol.
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