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Going to relocate and downsize considerably come retirement time, at least 4 years down the road. We're thinking about buying something now because it makes sense to me to put money into something at today's prices and interest rates.
We're looking at places that would qualify as 'the last house', and also at smaller houses we can use when we visit several times a year and then rent out if we feel like we need more room once we move for good. Pricing in the 'last house' market seems to be stable... smaller house prices are going up (in a market where smaller, older houses are being flipped).
We can afford to go either way, but are leaning toward the smaller house now. Unless the local market goes completely to hell, we should have a pocketful of equity in our current place when we're ready to sell.
Not necessarily wanting to get into the rental business, but it seems like the smaller place might be the right move now.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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Look now until you find the place you want. Took wife more than 1 year to find the perfect retirement place. Our previous home of 36 years took +6months, IIRC.
We rented out the retirement home for 8 months until we were able to sell our house and other properties.
what's the difference in size between a "considerable downsize" home and a "smaller house" that likely (by your comment) wouldn't be large enough when it's a full-time move?
Presumably, when you actually move, you'd be paying off any mortgage you took out "now" for this 2nd home. So, what's the market look like, appreciation-wise, in your current market and where you're going to move (and this where seems nebulous right now)? And any difference in appreciation, how does that factor in with how much your money is earning now?
If you buy once, move once, and pay cash ... then the interest rate really doesn't matter.
Just keep in mind that buying a second home or investment property today and making it a primary down the road can have different tax implications now.
If at some point you decide to sell that new primary after 2 years , the 250k exclusion if single or 500k if married is now prorated over the total ownership period .
It may not be an issue if you never sell or don’t go higher in gains then you are allowed .
But you should be aware that there is a potential penalty for buying early
Just keep in mind that buying a second home or investment property today and making it a primary down the road can have different tax implications now.
If at some point you decide to sell that new primary after 2 years , the 250k exclusion if single or 500k if married is now prorated over the total ownership period .
It may not be an issue if you never sell or don’t go higher in gains then you are allowed .
But you should be aware that there is a potential penalty for buying early
Capital gains aren't going to be an issue with what we're looking at.
I'd wait the 4 years to buy there. Chances are, especially if you're looking in Florida you'll get a better deal then than now. Especially with the economy heading into head winds. Florida tends to not fair well real estate wise in down turns. There have been tons of booms and busts in the state over the decades and this latest bubble is no different. I don't know the exact location, just some general advice.
If you are planning on selling your current home to fund retirement you should be prepared in the event the markets turn. What does that mean? Well if a recession does come and is very likely, you'll be competing with a bunch of other boomers that want to get out and fund their own retirements. Since most people have most of their assets locked up in their home and are screwed without selling it this will create problems as the markets become seller saturated. Depends on where you are located, some areas will do ok, some will be quite challenged.
So keep that in mind if the economy does turn, that could create issues with your plan. I wouldn't want to be relying on selling my home in 4 or 5 years to fund much of anything.
Capital gains aren't going to be an issue with what we're looking at.
Thanks to everyone who responded.
We got back yesterday from checking out the villages in Florida . It is 40 square miles of planned community . Most villagers had no intention of selling .
But the average is a villager moves about 3x as they go to different model homes in different areas with different amenities .
Homes sell very fast there so people tend to trade a lot
We got back yesterday from checking out the villages in Florida . It is 40 square miles of planned community . Most villagers had no intention of selling .
But the average is a villager moves about 3x as they go to different model homes in different areas with different amenities .
Homes sell very fast there so people tend to trade a lot
I know this is a bit off topic, but DH and I visited there years ago. It reminded me of the Truman Show with Jim Carrey. If you've seen it, you'll know what I'm talking about, lol.
Going to relocate and downsize considerably come retirement time, at least 4 years down the road. We're thinking about buying something now because it makes sense to me to put money into something at today's prices and interest rates.
We're looking at places that would qualify as 'the last house', and also at smaller houses we can use when we visit several times a year and then rent out if we feel like we need more room once we move for good. Pricing in the 'last house' market seems to be stable... smaller house prices are going up (in a market where smaller, older houses are being flipped).
We can afford to go either way, but are leaning toward the smaller house now. Unless the local market goes completely to hell, we should have a pocketful of equity in our current place when we're ready to sell.
Not necessarily wanting to get into the rental business, but it seems like the smaller place might be the right move now.
What say the group?
There are 2 different factors at play with one being you and your spouse housing preference versus the house as an investment. Depending on your financial position, the investment part may be a small or huge factor. For us it was probably a 50-50 consideration so we got what we wanted but within the real of the community so it has kept and increased its value.
Wife and I bought a house in Arizona when prices were low in 2013 for our retirement or possibly snowbird abode. We've rented it out since 2013 and it's appreciated I would guess about 40-50% since we bought it. Now we can move in in a lower cost house that is paid off.
Thing is; plans change. We always thought we’d retire in the San Diego area. Nope, our retirement home is in the Las Vegas valley.
We have 2 couple friends who bought retirement property several years ahead. One bought a “retirement house” in downtown Santa Fe about 8 years before retirement. The other bought a building lot in the 4 corners area about 10 years before retirement to have their last house built there.
The couple with the Santa Fe place finally retired; they bought a house on land in North Texas about 30 miles from their old house in DFW. The couple with the plot in the Four Corners just purchased an existing house to retire to (in March 2019) in Las Cruces, NM. the Santa Fe place was sold at a loss. The plot in the Four Corners is for sale with great hopes to sell at break even (not likely).
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