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Their mobile home, built in 1974, probably doesn’t have much value, despite the renovations they made. Selling it might bring in less than Milt originally paid, and moving it to a mobile-home park with a more predictable rent is probably not an option — many of the better parks won’t accept a home that old.
The planner encouraged them to consider buying a house. Because their current home is older, it isn’t worth much and the couple’s insurance company will cover it for up to only $5,000. And because of the housing crisis, there are plenty of real estate bargains to be had.
For example, McIntosh showed them online listings for two- and three-bedroom homes in an area in which they were interested — Sun City in Riverside County. The price tags on those homes were as low as $75,000, mostly for fixeruppers. McIntosh said it would be more practical for them to spend about $180,000 for a nice home in good shape.
Ideally, he said, the Burdicks would put down 20% and finance the rest both because of the tax break and because interest rates were at an all-time low. Including taxes, their monthly payment would amount to about $900.
“Wow,” Jean said. He said that after buying the house, they should start putting $300 a month into an account for home repairs that could arise.
Another advantage to buying now is that as the economy gradually gets better, as expected, the house is likely to increase in value.
“At some point, one or both of you might find you want to go to an assisted-living center,” McIntosh told them. “This way you would have some value to use to do that. You don’t have that option today.”
The planner also had advice for how they should invest their savings. Right now 98% of the couple’s assets are in equities. “That’s much too aggressive for their situation,” McIntosh said. He advised them to put 60% of their savings into a mix of bond funds and the rest in equities.
He also said they should not fear taking vacations — he suggested that they annually budget $4,500 for getaways.
But primarily for peace of mind and to better secure their future, they should give up the mobile home and move to a place where costs are relatively stable.
“How will we exist if these rents keep going up the way they are?” Milt asked. “It’s the fear of not being able to live a decent life.”
