I met a lovely couple at an open house last weekend. We had a very interesting chat about financing. This couple had retired and wanted to downsize or make some kind of lifestyle change but weren’t sure how they were going to put it all together.
The number one mistake older seniors are making is staying in their homes for longer than they should. We need to be making plans earlier for our “exit strategy”. I think we need to be thinking about the stages of old age in relation to our homes. When we first retire we have energy and zip and the garden and home are often a source of joy. As we age, that maintenance can become an excessive chore, but we are still young enough to enjoy an active lifestyle. Time to think about a smaller home. The older we get the more our physicality deteriorates. Too often we stay in homes that are not suited to our needs. It then becomes more expensive as well as physically and mentally draining in hanging onto homes that have outgrown us! A case in point is the clients who wanted to sell as their health was deteriorating more rapidly than they expected. Unfortunately, the one of the clients passed away before we could complete the transaction.
It is important to remember that our homes are often our greatest financial asset. What we purchase earlier in life and have the opportunity to pay off over time, now has the potential to take care of us in our old age. For example, the hypothetical senior could downsize by selling their $800,000 home, purchasing a more manageable $400,000 home, and then invest the rest. That money in turn will earn investment income to assist in adding to a fixed income. The benefit of lowered expenses on utilities and maintenance also takes the pressure off of a fixed income.For those who can’t face the hassle of downsizing, professionals like myself, put together teams to assist seniors through the process. We have developed a team of professionals who provide the necessary services to assist in project management and facilitate a smooth transition. We provide a full service for the client who is ready to make the decision to downsize.
If you have any questions about the process or know of someone who may require information, please drop me a note and let me know how I might be of service.
Check out this article from CREA (Canadian Real Estate Association). It’s a new year and new issues……..Canadian housing market: Looking back on 2019 and the challenges ahead in 2020 – CREA