Real Estate Stumbles Retirees Make

Most people heading into retirement inevitably make some sort of real estate decision—whether they downsize, relocate to a different community or make renovations to an existing home that makes the place more accessible to live in as they get older.
So, not surprisingly, there are numerous real estate stumbles people in this group may realize. “Real estate is usually one of the biggest assets retirees have, but it’s the area with the most emotional attachment—and a place where it’s very easy to mess up,” said Larry Luxenberg, managing partner with Lexington Avenue Capital Management, a financial advisory firm in New City, N.Y.
Below are five common retiree real estate stumbles.

1. Not downsizing soon enough. Big homes come with big energy bills and large lawns to mow—not to mention sizable real estate taxes and homeowner-insurance premiums. The longer you delay a move to a place that better fits your current needs, the more savings you’re missing out on.

2. Not investing the downsizing proceeds. When downsizing, not everyone walks away with cash at closing—some people buy a smaller home, but it doesn’t come with a less expensive price tag. If, however, you are able to purchase a home and bank some cash at the same time, it’s crucial to invest that windfall, Luxenberg said.

3. Not researching an area before relocating. Those with dreams of relocating to a tropical or snow-laden locale need to research the place before moving. Know how your taxes will be affected, the cost of the living in the new area, and generally how you’ll fill your days there. Be mindful about your health-care options, Research doctors and make sure the ones you’d choose are accepting new patients—and that they’d be in your insurance network. Those with specific health concerns should make sure there are specialists in areas they need.

4. Maintaining two homes. Maybe you’re interested in becoming snowbird, who likes living part-time in two locations. Maybe you’ve purchased a second home with the intent to retire there someday, thinking that you’d save money by buying at today’s prices. Either way, maintaining two homes is expensive.

5. Having a mortgage in retirement. Yes, mortgage rates are favorable, and owners can deduct mortgage interest when filing their income taxes. But most retirees live on limited incomes.

Let the Stovall Team help with your Real Estate goals. Call us today at 714.343.9294 or 714.393.5377 stovallteam.com
Sources: YahooFinance.com, Market Watch, Stovall Team