According to a Transamerica survey, three of every five retirees choose to move during their golden years, generally to cut costs or downsize while others decide to purchase a larger dream home as they kick off a new phase of their lives.
Buying a home after your retirement can bring up numerous challenging questions: Should I stay put in my current city, or move to my favorite vacation spot? Will living in a Condominium be an enjoyable and fun experience? But most importantly, how will I manage all the expenses including purchasing a place and other related expenses? After all the hard work, you finally get ready to turn your dream into reality and move into your new place. But some common yet costly mistakes can doom your plan and turn your project into an epic fail. Let’s take a look at the five blunders that you need to avoid at any cost.
Mistake #1: Location isn’t vital
First thing first, before you drive off to look into retirement communities for your new home-sweet-home, ensure whether a retirement home is the right choice for both you and your partner. If you have made up your mind, then start doing the research. Remember, as people grow older they need easy access to the diversity of services and amenities. Try to talk to those who already live there and find out what types of facilities, activities, and security services are included in the community. Here are some important questions you need to ask your agent before finalizing your dwelling:
- Can your family members come to meet you anytime?
- For how long your grandchildren or relatives can stay with you?
- Do they conduct your favorite leisure activities?
- How far is your home from medical centers, market, shopping malls, or other basic amenities?
Mistake #2: Selling their deep-rooted house
Many people consider selling their old house better than keeping it empty and locked; even if they don’t want to trade. If you are in favor of keeping the home in which your kids grew up, then you can extract extra cash out of your property via an equity release scheme. It offers a scope of options which enable you to draw capital or raise earnings using your home as a cash machine (without moving somewhere else). Make sure the property is resalable.
Mistake #3: Neglecting taxes, maintenance, and repair costs
One of the most important things you need to know is that many purpose-built retirement communities or properties levy weekly service fees. If you are thinking of buying a leasehold flat, condo in a building, or sheltered accommodation, then take into account ground rent and other charges such as maintenance, service, or repair. Confirm with the owner whether those expenses are fixed or will upsurge with time (and if yes, by what amount).
Last but not least, if the total payable amount is substantially sufficient to leave the property liable for council or inheritance tax, then discuss the terms and tax options with your adviser.
Mistake #4: Not consulting a professional buyer agent
There are different types of retirement accommodation available in the market that fit both your lifestyle and budget. Many people think about downsizing as it releases a lump sum, whereas others prefer upsizing to make their life more comfortable. In any case, it's vital to take professional advice on where and how to invest the money. It may not be a smart idea for retired people to put all their home capital into a retirement property.
Mistake #5: Factor in your savings
Be aware that your lifetime savings may rule you out from claiming council tax reduction and many other retirement benefits. Also, if you or your partner need long-term care in the future, you’ll be entitled to manage all the care-home fees (not your local Primary Care Trust (PCT)) involved. Picking the wrong abode can put your nest egg in trouble, so instead of making a major investment, try renting a condo or home in the community for at least three or four weeks.
Bargain hunting for an estate while keeping your retirement dream in mind can be quiet challenging and exciting at the same time. But with the help of a professional buyer agent in Rancho Cucamonga, you can score your retirement prize easily and commence your new and happy life!