When buying a retirement home—in other words, a property you want to retire to after you finish working—there are several questions you should ask yourself before making a final decision. Choosing the wrong home can be financially—and emotionally—disastrous. Avoid making a poor decision by beginning your research here.
When to Buy One
If you are financially able, it is a good idea to purchase the property before you retire. It will be easier to qualify for a mortgage if you are still working, and you’ll have more spending money to put into fixing up the property and taking care of surprise expenses, if necessary. In addition, knowing how much your retirement home will cost you will help you plan out your retirement finances. If you purchase your retirement home before selling your previous home, that can diversify your portfolio, and you can rent out one of the homes until you are ready to move in.
It is never too early to begin planning and saving for your retirement. The fact is that mortgage rates can change day by day and the interest can vary wildly depending on the kind of loan. It is a good idea to plan and save well in advance.
What Kind of Property
You want to find a home that will give enough value. Consider resale value and location before making a final decision. Don’t choose a location purely based off of its beautiful scenery or weather. If you live in a colder climate and wish to move somewhere warm, don’t purchase a home in Florida without learning more about the location. Are there airports and medical care nearby? What about family? What is most important to you? Consider renting a home in your desired location for a while before you commit yourself to living there long-term. If you regret your decision and try to sell your new home, you could end up doing so at a loss.
Consider Long-Term Costs
Will you be able to afford this home in the long-term? Do not exhaust your resources with a mortgage—and don’t forget to factor in taxes, HOA fees, and other costs. If you live into your 90s, will you still be able to afford the payment every month? Consider establishing an emergency fund for your home.
Living in your dream retirement home will be well worth the research, and going into a purchase with the proper understanding of the consequences of your choice will help you avoid regret and financial difficulties later on in life.
Do you need help knowing how to save money for retirement or anything else? Learn some great tips in our webinars!