By Stewart Koesten
Are you thinking about downsizing, buying a smaller house, as you transition into retirement? You would be wise to consider your financial planning goals, and your lifestyle, before taking that step.
Do you entertain? If you like to entertain or host business gatherings, a smaller house may not do. If you receive visitors from out-of-town, would you be comfortable asking them to stay at a hotel?
Location. As they say in real estate, it’s all about location, location, location. Many villa communities may not be centrally located or not be near where you live now. How much does your neighborhood matter to you? Are these villas in areas you would feel comfortable in? Will moving to a new home separate you from your friends, places of worship and social circles?
Unforeseen Expenses. Downsizing is supposed to save utility expenses, property taxes, interest and home insurance premiums. In some cases you might actually increase some, if not all of these unless you are willing to sacrifice size and quality of construction and design. If you are considering moving from a high-quality large house you should be prepared to decrease square footage and step down in quality or pay much more.
Sticker Shock. If you own a home in an older development, it is possible that your home could not be rebuilt now for less than twice its fair market value. New homes, in your square footage range, in new high-quality developments are sometimes twice as expensive to build now than your home is worth in this real estate market. So, as you begin to look for a smaller house in a new high-quality, maintenance-provided community, you may have to pay more than your existing house is worth.
For now, at least, you may be better off staying where you are!
For help with housing decisions, schedule a meeting by clicking below, contact Stewart Koesten –skoesten@makinglifecount.com, or call (913) 345-1881.