When to Invest in a Retirement Home

by Chris Bohr 02/02/2020

Photo by Harli Marten on Unsplash

Although it may seem like putting the cart before the horse, a strong case can be made for purchasing your retirement home before your golden years. In fact, with some deft financial planning, it may be worthwhile to buy your retirement home decades in advance. That may seem counterintuitive, but maybe other folks have been doing it backward. Whether you are a Millennial, Gen Xer, or Baby Boomer, the best time to plan ahead is right now. Consider these strategies.

Why Buying Now Saves Retirement Dollars

The Gen X crowd was born between 1965-1979, making them 40- and 50-somethings. Those are generally prime financial years. In many cases, they’re nearing the end of a mortgage and are probably enjoying the fruits of many years of savings. This means having equity and resources at their disposal to make a move on a property now.

The argument for paying off an existing home loan or doubling-up if it’s reasonably low rests on data that the home values continue to rise. Consider these incremental increases in median home sales pricing.

  • 1970: $23,400
  • 1980: $64,60
  • 1990: $122,90
  • 2000: $169,000
  • 2010: $221,800
  • The median price routinely topped $300,000 in 2019, and the robust economy, coupled with an inventory shortfall, is expected to drive prices upward. If you were to have purchased your retirement home just 10 years ago, your savings would have amounted to nearly $100,000, plus lower interest payments. Those are real retirement dollars.

    Why Buying Your Retirement Home First Makes Sense

    One of the strategies savvy Millennials are employing is to purchase an “investment property” rather than a primary residence first. That may seem like thinking way outside the box, but the math and lifestyle considerations can make it a smart play.

    This demographic runs between 23 and 38 years old, and they have grown up in a vastly different culture than their predecessors. Some are straight out of college struggling with student loan debt, and even the top end of the age bracket has members still evolving their careers in many cases. These factors tend to position Millennials for ongoing relocation as they take advantage of emerging opportunities. Rather than be burdened with buying and selling a home, it’s easier to rent.

    Financially sharp Millennials, among others, have purchased properties in culturally rich areas that lend themselves to college students and tourism. The strategy is to enlist the help of a real estate professional who oversees renting, upkeep, and allow the asset to pay for itself. In many cases, it may even yield a profit. When retirement age arrives, there can be ample revenue to do a full remodel and just pay the taxes while you collect a pension or social security.

    Although buying a retirement home prior to punching out for the last time may seem odd at first, it’s in your best interest to run the numbers both ways. Consider all the moving parts and detailed costs to make an informed decision about your best time to but a retirement home.

    About the Author
    Author

    Chris Bohr

    Hello, My name is Chris Bohr, I’m a lifelong resident of the Tampa Bay Area, married to a wonderful woman, Michelle “Missy” Bohr and we have a two year old son who is the apple of my eye. I’m a graduate of Countryside High School in Clearwater, Florida, a Graduate of the University of Central Florida, and an active Realtor and Auctioneer. You are looking for someone to help you to either buy or sell a home, liquidate the contents of a home, or perhaps do it all. I can help! …and I want too. As a member of this great community I’ve seen quite a few changes around these parts and can help guide you through the mazes of the Real Estate World. In addition to the various licenses I’m also a proud member of the Upper Tampa Bay Chamber of Commerce, the Pinellas Realtor Organization, Florida Association of Realtors, National Association of Realtors, won several business awards and was even named the honorary Mayor of Palm Harbor many years ago. Our approach to helping you sell your home starts with a global reach to find those buyers who may be sitting in a cold basement somewhere just looking for a reason to come down to the beautiful sunshine state and stop shoveling snow. In addition to the global reach, I also include the local, “Hey look at me” method of marketing by making your home visible to more potential buyers than most properties on the market today. If you are looking to buy a home, I understand it can be very intimidating, I take the pains away and remind you that buying a home should be fun and if you put the right person on the job I can promise to do my best to walk you through the hurdles of home buying. My approach is founded on experience, of course the experience of buying and selling houses, but also going through the processes myself and recalling the times when it was the most nerve racking. I keep you informed, I answer my phone, and I actually check emails and respond in a professional and courteous manner…I guess you could call that the Golden Rule. What sets me apart from other Realtors is the ability to handle not only your purchase or sale, but also having the ability to liquidate the contents, or lighten your load in regards to contents through our licensed and reputable Estate Sale and Auction Company. I love it here in the Tampa Bay area, and you will too. Drop me a line or give me a call, and let’s get the ball rolling toward your next move! Remember, Bohr Sells Homes, in fact that’s my website. www.BohrSellsHomes.com Thank you, Chris