Factors to Consider Before Buying a Home in Retirement
Posted by Alex Narodny on Wednesday, December 30th, 2020 at 12:54pm
By, Lisa Roberts
Leaving the workforce behind for good is an exciting time in the life of any person. However, it also means that you'll have to make some decisions regarding your lifestyle and finances. One of the biggest questions that future or current retirees have to answer at this point is where to live in their golden years. So, we decided to help out and list all the factors to consider before buying a home in retirement.
This is a big decision, and you can't afford to make it lightly. Even things like resale value factors are still important. So, it doesn't matter if you're thinking about downsizing or if you want to make the stakes higher and relocate to another state; here are the things to which you need to pay attention.
There are more costs to buying a house than just a mortgage
It's not unusual that some of the most desirable areas for retirees come with higher associated costs. Additional things like property taxes, maintenance fees, or homeowners association dues are the things you have to consider. In short, if you want to use amenities like tennis or golf courts, expect to pay a premium.
Downsizing to a condo doesn't necessarily mean lower costs either. Hefty fees for the grounds and common spaces are often present. Although this might be an issue for any homeowner, it can be a lot riskier for a retiree on a fixed income.
There are, however, things you can do to avoid these problems. Before you call mod-movers.com to help you relocate, find out about the taxes in the area you're planning on moving to. Also, inform yourself about the fees associated with your property.
Keeping up with the costs of buying a house is a bit more than just paying a mortgage.
Your favorite vacation spot might not be the best idea
People seem to forget that what they love about a certain destination can be that they're on vacation each time they visit it. And when you're in that state of mind, you don't care that the traffic is bad, that service is slow, or that restaurants are expensive.
However, these minor inconveniences and annoyances can become massive disruptors when you start living in a place full of tourists. There's also another scenario. You might find yourself stranded if the place you choose virtually shuts down in the off-season. The entertainment and dining options are often important to retirees, and living without them can be tedious.
The best thing you can do here is to visit the place for an extended time. If you can, stay in a long-term rental. This way, you'll see what it's like to live like a local. While you're there, research if buying a foreclosure is a good idea in the area. It might save you a bit of money.
You might want different amenities in the future
Right now, you probably visit the doctor once a year, drive to the store to get everything you need, and have a social life with your friends from work. However, all of this can change as your needs change. You might find yourself relying on public transport because you can't drive anymore or needing to see a healthcare specialist more often.
The fix here is simple. Talk to current retirees you know and ask them about services they started using since their retirement. After that, make sure that the place you're planning to relocate to has them also.
Determine what's crucial to you. Do you want to have a top-notch health system, or do you want lots of fun activities and nice weather? All of these are essential factors to consider before buying a home in retirement.
Additionally, it's smart to check your options when it comes to the relocation itself. Booking reputable movers well in advance can save you a lot of money most of the time. So, why wouldn't you buy that jetski that you always wanted while your residential movers help you find an easy way to settle in your new home.
High-quality healthcare might not be important to you right now, but it certainly is one of the factors to consider before buying a home in retirement.
Your ability to navigate through a house might also change
Research has shown that more than 90% of people wish to age in place. This means that most retirees want to live in their own homes and areas during retirement. Unfortunately, the ability to do this can vary depending on the conditions of your home.
The first things you want to consider are the inclines. If you have a steep driveway or an upstairs bedroom, it can get more challenging to navigate them as you get older. Even things like gardening can become more difficult. Trimming those rose bushes is a lot harder when you have less energy to devote to it.
Therefore, if you find your home unsuitable, it can be smart to implement some home staging tips from the experts, sell it, and buy something more adequate. Seek the principles of universal design and concentrate on finding houses with main floor masters, wider doorways, and step-free entrances when looking for a new home.
Purchasing the home outright isn't always better
Pretty much all retirees assume that they want to avoid a mortgage. So, many of them pay cash for a house. However, as it turns out, this is rarely a smart decision. What takes your liquid assets and makes them non-liquid, as they're tied up in the house.
Therefore, it's often a better idea to get a small mortgage with a low-interest rate. This way, you have the rest of your assets available to invest for a potentially higher return. Talk with a financial planner and a mortgage advisor about your options and see what you can do.
Paying cash for your home might not pay off in the end.
And those are pretty much all the factors to consider before buying a home in retirement. Remember that you're not just buying for today, but for a long string of tomorrows. Make sure that the house will be there to support you in the inevitable changes in the future.
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