Maybe you're not ready to move into it but that doesn't mean that you
shouldn't take advantage of the present opportunities to acquire the home you
want to live in during retirement. The combination of the low interest rates,
reduced prices and lower competition may never be this good again in our
lifetimes.
The rental market is strong and a tenant could pay for your retirement home.
The cash flows are attractive and the yield is bound to be stronger than what
you're currently earning. Even if you don't retire to this home, it could be a
placeholder to control the costs of the home you do move into.
One thought would be to finance it with a 15 year loan that will have a lower
rate than that of a 30 year loan and it will obviously amortize in half the
time. Even if you don't have the home paid for by the time you retire, your
equity will be larger.
Ideally, if you sell your current home when your move into this retirement
home, you may be able to take up to $500,000 of tax-free gain for a married
couple. That profit could be used to fund your retirement.
With home prices and mortgage rates certain to rise, this may be one of the
best decisions you can make. We want to be your personal source of real estate
information and we're committed to helping from purchase to sale and all the
years in between.
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