Good idea or scary move?
It all depends on where you are in life, financially and physically. Should you downsize or invest? Move out or move up? These can be a lot of scary questions as baby boomers hit their retirement age. You may have made a lot of money over the past 30 years but with the drop in home prices over the last 8 years you may have lost a lot of it too. So where does that leave real estate investments today?
Many baby boomers have actually been delaying retirement for the basic fact that selling and downsizing just isn’t an option. They may owe more than the home is worth and this keeps them hanging onto it until it bounces back. Well, it has. Maybe not with the vengeance some would like but stronger certainly than we have seen in the past 4 years. The number of existing homes sold is up about 8% nationwide according to the S&P and prices have reached over 12% higher than they were this time last year. So now baby boomers are toying with the idea of selling or renting out and downsizing. Which is the best option and which makes the most sense financially?
Generally speaking, we know it’s better to own than rent but that’s usually if you are going to stay in your home more than 5 years. Is that something baby boomers want to consider at this time? It all comes down to ease of living which has many implications as far as maintenance, finances and responsibility. If age 65 is no longer the retirement age, keeping a home or investing in new real estate may be well within the realm of possibility for baby boomers. Buying a new home is sometimes a strain on the cash flow, not just in the down payment but in monthly taxes, insurance, fees and the mortgage payment. Even if buyers plan on paying cash, they must consider the inevitable costs associated with owning real estate. One smart plan may be to buy a good rental investment, live in it for a while, and then rent it out when you are ready to move on. The equity remains and collects while the retirees are off enjoying the freedom.
So what makes the most sense for you? It really comes down to all the many variables associated with your specific retirement plan. I would love to talk to you about the options that might work when it comes to real estate in Savannah GA. Call me today and let’s talk.