From the Builder’s Desk; April 16, 2020
Dear Les,
My husband and I are wanting to look at options for retirement living. We have a large home to sell and are not sure how to proceed with current market conditions and the Covid-19 situation. As a follow up, we are considering building a new home for ourselves and are not sure if we should wait or act fast.
Answer:
Woa. You’re considering a lot of options, each with its own series of considerations at the same time.
There are financial as well as functional and lifestyle considerations. Each of theses requires its own detailed analysis. But let me just lay out some items to consider.
1) Nest egg. Most people have an enormous “nest egg” in the home they’ve lived in for years. In the form of a big, largely unused home today, the money you have in the home is not producing anything for you, and as you age and your income becomes an issue, you’ll want to redeploy that capital.
2) Current vs. Future home functions. As you age, will that large home still satisfy your needs? If there are stairs, and you have concerns about mobility, will the home continue to make sense? The yardwork you’ve enjoyed with a large lot may no longer bring joy.
3) Remodel may create new opportunities. How easy would it be to convert your current home into a multi-family situation? Perhaps you could live on the main floor and rent the upstairs or the basement to another. We had people convert living areas over the garage for rentals. So, staying in place may give you a means to generate retirement cash flow.
4) A better time to sell my home. I’ve been building and selling homes in Tri-Cities for 18 years and found this market to be amazingly resilient. Despite the stay-at-home orders, I see plenty of homes on the market and deals closing- we just sold a highly customized home atop Olympia Street in Kennewick. Significant demographic conditions and mortgage financing rates are contributing to strong housing demand.
5) Sell and buy/build vs rent for awhile. Some find that the time may have come to sell their
big house and pocket the equity. They find that this may be the time to consider if maybe you don’t want to live where you do. Maybe renting or buying a condo in Portland would better meet your interests and lifestyle requirements. Maybe family members have moved away for a job or to attend school as you’d like to live someplace else for the time being.
6) Home of your dreams. This may be the time to “step out” and acquire and existing or build a new home that fits your interests. I’ve found many home buyers over the years who’ve said, “I’ve lived my life scrimping and saving, and now, by golly, I’m going to treat myself to my ideal retirement home.”
7) Move in with relatives. Seriously. Particularly if you get along well, and if they can provide separate living quarters, this can be a very enviable living situation. Sell that big home, move in with relatives, share the rent or mortgage payments, and travel the world while benefiting from low overhead. Benefit from increased freedom of movement, privacy and security.
These are only a few of the broad range of options available. But as you narrow down your personal considerations, hopefully you’ll find that owning that big house may springboard some lifestyle ideas you’d never considered.
If you have real estate-related issues you’d like to discuss with our resident retired builder of 30 years, please email him directly. There’s no cost to you. Your question may even be featured in the next installment.
Contributing Editor, Leslie Savitch
Former home builder, Coach for people in transition
Les@createanoasis.com
The information on this blog are based on personal opinion and experience. It should not be considered professional financial, real estate or legal advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial or real estate professional.