This past weekend I had an interesting conversation with fellow “seniors” who are contemplating their next step in life.
They own a single-family detached home with lots of yard work to keep it looking beautiful. They love their home but feel the need to simplify their life as they age. (They’re in their 70s.)
Their options vary from downsizing to a patio home, moving to a 55+ rental (which Rita and I did last year), or moving out-of-state or out of the country. Our nation’s political turmoil is what’s behind the last option, and Portugal and Mexico have caught their attention.
This couple is also feeling an urgency to choose, because they know this is the time of year when the landscaping looks its best, and they don’t want to miss that window of opportunity.
Putting my “consultant” hat on, I had some insights of my own to share with them.
My first insight was that you don’t want to wait until you have to sell, such as from illness or death of a spouse. This couple is in excellent health, and that’s what you want when you undertake such a serious (and exerting) life change.
My second insight was that renting is actually a great way to procrastinate, taking the pressure off choosing those other options. As a renter, you get to decide a year from now when your one-year lease expires. At that time you can buy that patio home, move locally, out-of-state or to Portugal — or you can renew your lease and put off the decision for another year.
As a renter, especially in an apartment building or 55+ community, you are free to travel and check out all those options. And, since you will have sold your house already, you could be a non-contingent buyer if buying is what you decide to do.
Selling your current house and buying a replacement home at the same time can be really strenuous and stressful in terms of moving. If you rent, you can take your time to move out of your current home, and you can take your time again when you decide to buy next year or the year after.
A third insight is financial. This couple owns their house “free and clear.” When they sell, they’ll have nearly a million dollars that they can invest (as we did), adding another income stream. That equity isn’t earning them anything sitting in their home, and the income they earn from investing their proceeds will likely exceed the cost of renting.
Lastly, they’ll be able to enjoy worry-free vacations. As a renter, they’ll be in a “lock-and-leave” environment like Rita and I are — able to go on cruises or other trips without any concern about break-ins, snow-shoveling, lawn care or frozen pipes.
As a Realtor and homeowner, I never thought that I’d be a renter again, but I could tell that we were at the top of the market and that by “cashing out” on our single-family home in Golden, we’d have the freedom to make another decision at any time later on and not have to worry about anything. And because we had to downsize to sell our 4,000-sq.-ft. home and move into an 1,100-sq.-ft. apartment, that hard work was behind us. It was a great feeling when that downsizing was complete. Another benefit is that our heirs will have less to sort through and dispose of when we die, because we already did most of that work.
I’d like to hear your thoughts or questions about this topic. Email me at Jim@GoldenRealEstate.com.
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