At age 68, prospective landlord must consider renter problems

October 12, 2003|By Liz Pulliam Weston | Liz Pulliam Weston,SPECIAL TO THE L.A. TIMES

My wife and I are both 68 and retired. We live in a three-bedroom house with no mortgage. We both agree that shoveling the snow in the winter and taking care of the yard the rest of the year might soon become too much for us to handle. We believe we would be better off in an apartment.

My wife thinks we should sell the house, but I think we should rent it out. My thinking is that if we sell it and use the money we get from the sale to pay our rent, we will eventually run out of money. If we keep the house and rent it out, we will always have the rent we receive to pay the rent for our apartment.

Which, in your opinion, is the better way?

If you think shoveling snow will be tough on your aging bones, how are you going to handle middle-of-the-night phone calls from tenants when their furnace dies? Or the stress and hassles of evicting someone who fails to pay the rent?

You could turn to a property management company to handle these issues for you, but you'll have to give up a good chunk of the rent. There's also no guarantee your place will stay rented year-round.

Of course, many people have built comfortable retirement incomes from rentals. But you should be prepared for the realities of being a landlord. If your goal is an easy, hassle-free retirement, you might be better off selling the house and consulting a financial planner.

You could, for example, invest the proceeds of your home sale in an immediate annuity, which would guarantee you a stream of income for life. Or you could pay cash for a condo instead of renting an apartment, insulating yourself from rising rents.

A consultation with an independent, objective financial adviser can help you review your options and decide on a course of action.

I have $67,000 in credit card debt. I'm current on my payments but not making much headway in paying down the balance.

I have been contacted by a business that says it will negotiate with the credit card companies. They advised me not to pay anything for six months, and then they'll settle with the credit card companies for $42,000. They say they can do all this without affecting my credit.

What do you think?

As you suspect, this outfit is a scam. Any company that says ignoring your bills for six months won't trash your credit is lying. Many of these outfits will take your $42,000 and disappear into the night. Steer clear.

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