Retirement can be an amazing time, where you finally get to feel that peace and serenity you always wished for, alongside traveling, entertainment and new friendships. But as all of these seem to unfold, there’s another question that pops in the minds of many: where am I gonna live?
Am I still gonna be in this 2-floor house where I raised my kids? Or am I ready to move into a smaller place, and closer to my daily activity places? Whatever the question and the answer, there are many things to consider when deciding to buy a new home after 50. Let’s walk together through some ideas.
- The real estate footprint – Marc Hernandez, a global real estate advisor with Douglas Elliman of Beverly Hills, says that buyers over 50 or 60 years old aren’t so preoccupied with their real estate footprint when buying a home. At this particular stage of life, the kids have grown, the income potential has peaked, and larger living spaces aren’t a must anymore.
- Your living arrangement – Prepare, because there are many beliefs baby-boomers are about to surprise us. As some say, the type of properties buyers wanted at the beginning of their cycle won’t be very different from the ones we’re about to see at the end of it. This being said, alternative living arrangements might include moving back with family, or to a college campus, or even considering some roommates.
- Indoor vs. Outdoor space – The ratio of interior space is important for older home buyers. While younger buyers prefer a large home in a smaller lot, old buyers prefer to purchase a home that has a large garden: they take into consideration morning walks, gardening and other leisure activities.
- Condos vs. larger homes – As we said before, some might enjoy gardening and other outdoor activities in retirement, but others are likely fed up with those. Even more, they may prefer the transition to a place with less yard space, and more amenities that are taken care of for them.
- Walkability – Unlike other periods in life, retirees don’t want to consider living too far away from restaurants, retail, and other everyday destinations in the city. That’s why walkability gets prioritized when deciding to purchase a new home.
- One-story homes – Retirees are anticipating mobility issues as they get older, so for someone that wants to purchase a new home, the most important criteria is a one-story home. It’s another way of saying that people are taking steps in order to avoid…steps.
- The passive income effect – Many retirees are relying on a passive income, whether it’s a rental income or earnings from a business they’re not any longer involved. In any of these cases, when they apply for a loan, it is required a larger down payment if the funds are coming from a passive income. So just to be sure, you should put down 35%, instead of 20%.
- How much mortgage you afford – A good strategy is to make sure that your monthly payment is no more than 25% of your monthly budget. It’s better than to own a house and have no money left for any other expenses.
- Location is very important- Location is extremely important when you use it as an income property, or you want to leave it to your children or to use it as a vacation home and rent out part-time. It doesn’t have to be extravagant but focus on something where people can feel at home.
- Children staying or moving? – Many Millenials are forced to move back with their parents, because of poor wages, high housing costs or neverending student debts. That’s why some baby boomers might take into consideration the family dynamic before deciding on a new home.
- Best places to retire – Another question that’s worth asking is where you decide to retire? Seniors that are trying to lower their tax burden might consider Florida, Mississippi, South Dakota, Wyoming, or Alaska. There are many affordable places to retire all across America if you know what you’re looking for.
- Access to health care – The top five locations for senior health care are Hawaii, Minnesota, Massachusetts, Colorado, and South Dakota.
- An all-time investment – No matter the age, real estate is a good investment. And even so, more important than the age of acquisition is the condition, the price and the location.