Most retirees would rather live in their current residence instead of buying a new home. A recent report from the Center for Retirement Research at Boston College shows that 53% of retirees opt to stay in the home they lived in when they were in their early 50s until the rest of their lives.
Staying in a large home into retirement however, often becomes costly. Housing-related costs such as taxes, maintenance fees, utilities, and insurance make up a significant chunk of retired homeowner expenditures.
Indeed, downsizing offers several unique benefits, which includes tapping into your home equity. But in case you’re still apprehensive about the idea, here are some helpful tips on how to make the entire process easier and more manageable.
Figure out how much housing you’ll be able to afford
Relocating to a smaller home does not mean automatically reducing costs. If you move to a newer home or in an expensive neighborhood for example, your costs will likely increase by a sizable amount.
That said, one of the most important things to consider before selling your home to downsize is to make sure your new home will help you save more money, especially since transitioning into retirement means a shift in your cash flow.
Look for a home based on your lifestyle goals
Before selling your home, think about the lifestyle you’d like to enjoy during retirement, and how your next home fits into the picture.
If you plan to spend the bulk of your time traveling for example, a simple, low-maintenance condo minutes away from the airport or the freeways is an excellent option. But if you’re planning to host family gatherings or babysit your grandkids from time to time, downsizing to a smaller home might not be a good idea.
Gather information on the current real estate market
Buying a property is a large investment, so the condition of the real estate market in your area is something you’ll want to look into. When you decide to put your home on the market in the future, you’ll thank yourself for doing your research years before.
Important factors to research include:
- Home values in the neighborhood
- Local housing market trends
- Price increases over time
- Number of active listings
- Your state’s mortgage interest rates
Prepare for competition
Small, affordable homes are ideal not only for downsizers, but for first-time homebuyers as well. Here are two great ways to help you stay ahead of the competition:
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- Sell your current home before you place an offer.
- Offer to pay in all cash. Your previous home’s sale will give you some leverage to make compelling offers, which gives your offer an advantage over the rest.
Working with a top realtor will make downsizing a seamless and stress-free process. If you’re searching for the finest Warren real estate options that suits your lifestyle perfectly, get in touch with Pagnotta Homes today by calling 908.436.7947 or sending an email to info(at)pagnottahomes(dotted)com.