As people become more and more savvy about their investment habits, people are also finding new ways to plan ahead. In our latest post, we will examine the trend of purchasing your retirement home years in advance, potentially saving your thousands down the road.
When purchasing an investment property, you should think about the long term. This doesn’t mean you have to hold on to it forever, but you should think about what you ultimately want the property to do for you. Something many homeowners are thinking about is their retirement. By purchasing a house now, that they will live in later, investors can spend time picking and choosing, waiting for a great deal to come along.
The Right Property, The Wrong Time
Let’s say a property comes along that you absolutely love, but it’s not right for your current situation. Maybe you need a 5 bedroom house now but could see yourself in a smaller space when you’re older. It can make sense to buy a house now that isn’t right if you can utilize it as an income producing asset in the meantime.
The House You Own Today, May Not Be Right For You As You Get Older
As you people get older, their priorities in a home might change. They might choose a smaller, single story home. Something that requires less effort to clean and maintain. If you have a high-maintenance yard or a large lawn to mow, it might not be how you want to spend your time when you’re older.
In The Meantime…
Let someone pay you to live there. Let’s say you find an amazing deal on the perfect home. You shouldn’t let it get away. In the meantime, look for a high-quality, long-term tenant. Let them know your intentions with the property. Hopefully, this will encourage them to keep up with the property, keeping it clean and without any damage.
The beauty of this is that you will be able to have someone else pay your mortgage on the home. Imagine… being able to retire, move into the perfect house, and have it completely paid off. Of course, you will have to meet requirements from the lender when purchasing the home. Getting a loan for an investment property can be a bit more difficult. It can be easier to qualify for a traditional loan by living onsite for the first couple years.
Renovating the house before you take occupancy. You can take the next few years to complete renovation projects, customizing the house to your liking. Do larger projects when you are between tenants. You might even be able to raise the rent solely based on the improvements you make.
Your interest in the property will be greater than with other investments. It can be a good idea to have a friend, family member or someone you really trust living in the house. Even if you offer them a discount on rent, the peace of mind you will receive will be worth it.
Remember, you are buying this home for a future version of yourself. Think about the things you might enjoy in your golden years. Consider the location and its accessibility to everyday conveniences. We would love to help you learn more about buying a house in Greater Toronto Area for retirement!
You will likely benefit either way. Things change. The beauty of real estate is that you can sell it. If you buy a property now, rent it out for a few years, then decide to retire in Italy instead, you can always sell the house and buy yourself a plane ticket.