5 Real Estate Tips For Retirees
Many people decide to relocate when they retire. In fact, we recently wrote an article comparing the most popular retirement states with the most affordable states to retire to. Buying a home for retirement requires thinking a little differently than buying a home to start or raise a family. Here are five real estate tips for you to consider before making a final decision.
1) Don’t Assume Paying Cash Is The Best Option
Many retirees use the sale of their existing home to pay cash for the home they’ve chosen for retirement. This is only a wise decision if your retirement fund is not tied to the proceeds from the sale of your home.
In other words, if paying cash for your next home means your monthly living budget will be tight as a result, then it may not be the best choice for you.
2) Don’t Downsize Too Soon
A common mistake pre-retirees make is downsizing from a large home to a smaller one as soon as their children have moved out. The idea of avoiding the hassle of managing and maintaining a big home is a powerful motivator, but it can sometimes backfire.
Moving out of your current home to early can mean not having enough space for visiting friends and family later on, as well as possibly isolating yourself in a new area. To mitigate this risk, consider renting a home in the area you favor before making a permanent decision.
3) Take Future Costs Into Consideration
Another common trap retirees fall into is assuming that because the pay for a home upfront, their monthly expenses will be significantly lower. While this can be true in some cases, keep in mind that while your “housing” line item will be zero, other costs may actually rise.
Many pre-retirees don’t realize, because they’re still working, that expenses like dining, travel, and entertainment are likely to go up when they retire. Without a full-time job to fill up your days, it’s natural for other hobbies and interests to take their place.
4) Carefully Research The Area First
There are countless stories of couples who took an amazing vacation to a tropical paradise and decided to retire there when they were done working. Unfortunately, many of those stories end with disappointment and regret.
A place that is great for a vacation is not always a great place for retirement. Before splurging on that idyllic beach bungalow, have an answer to the following questions:
- Is there health care nearby?
- Are there grocery stores and other day-to-day amenities readily available?
- What’s the social scene like? Are there other retirees in the area?
- Will you need to drive everywhere? Is there public transportation?
- Is there an “off-season”? If so, what’s it like during that time?
You should know the answers to these questions and be comfortable with them before deciding to purchase real estate in the area.
5) Your Needs Will Likely Change Over Time
Because you are retiring, your next home needs to meet your needs right now, but also ten, twenty, and possibly even thirty years from now.
Things like large yards, stairs, attics, crawl spaces, and narrow doorways may not seem like a problem right now. But consider that you may eventually not have the same mobility as you get older. Will the house you’re looking at be easy to navigate if your health declines? What about if you or your spouse require a wheelchair at some point?
Keep in mind that your needs will change over time, and the home you buy should account for those changes.
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