News About Properties

The benefits of a mortgage-free retirement

Retirement is often likened to “financial independence.” However, as pointed out in a USA Today story last week, many retirees are finding themselves very dependent, very despondent, and, well, screwed. These are retirees with mortgages they can no longer afford. Pretty sad stuff.

Of course, this wouldn’t be a problem if these folks owned their homes outright before they retired, but that’s not the case for many (if not most) retirees. For years, the standard advice has been to keep a mortgage so you could have more money to invest. After all, if you’re paying 6% on your tax-advantaged mortgage and earning 10% in your tax-advantaged 401(k), why pay off the debt?

Well, now that we no longer take that 10% average annual return in stocks as a G-given right (insert the “G” of your choice — God, Greenspan, Geithner, GM, GE, Gumby) it’s time to question the wisdom of maintaining a mortgage and investing the extra cash.

For someone like me — who is almost 40, won’t retire until age 70 if ever, and can personally stand a lot of volatility and market uncertainty — I think it still makes sense to invest rather than make extra mortgage payments. But for more conservative investors or those closer to retirement, paying off the mortgage might be the better bet. This is especially true if their surplus funds are going into “safe” investments, such as CDs or Treasuries, which are just paying 1% to 4% these days.

Palm Beach Projects in Distress [South Florida]

In further evidence that the wave of foreclosures against large residential projects in South Florida is far from over, lenders have moved to foreclose on two prominent projects in Palm Beach County. Country Lake at Palm Beach, a local rental complex, has been hit with a $19.5-million suit, while a condo and marina development in Delray Beach is facing a $17.8 million action.

The 192-unit Country Lake property is owned by a fund managed by Atherton-Newport, an Irvine, Calif.-based real estate investment company that bet big on South Florida’s apartment market in 2006 and lost. Atherton, which manages funds backed by investors that include several professional sports figures, acquired a number of multifamily properties across the country before filing last year in California for Chapter 11 bankruptcy protection from creditors.

Atherton is in talks with an equity investor interested in acquiring the company, according to Atherton’s bankruptcy attorney, Joseph A. Eisenberg in Los Angeles. He would not disclose the name of the possible investor.

Keep up with your homeowner’s insurance [North Florida]

The Big One won’t hit this year.

Will it?

Northeast Florida has been spared from a direct hurricane hit since Hurricane Dora in 1964, but there’s always a possibility the region’s luck will run out in a new hurricane season.

Given the threat, an annual checkup of your insurance coverage is always a good idea, and potentially an opportunity to save money on your premiums.

Twice-flooded Orlando-area homeowner gives up, sells house through FEMA program [Central Florida]

I just watched my house get destroyed for the third time in five years.

This time for good, devoured one crunching bite at a time by a big yellow track hoe until nothing was left but crumbs of stucco and concrete.

I guess I should have been happy to see it demolished, after all it has put me through. But it was a bit more like watching Old Yeller get put down — you know it had to be done, but it still puts a lump in your throat.

This house I once loved had a fatal flaw. It sat 9 inches lower than any other house in one of the lowest neighborhoods in flood-prone DeBary. It’s easy to conclude now that it never should have been built. Hurricane Jeanne and Tropical Storm Fay made that clear.