Question:
I have an opportunity to buy my “dream home” now. My family and I are not 100% ready, but we never thought we’d see the house/land/mortgage rates at the levels they are at today. Do I bite the bullet now and buy our dream retirement home before we are retired?
Answer:
Purchasing now for the future can be risky, as you may change your mind. We think the decision on purchasing a retirement home is a question of how soon will you retire, and will you be able to use it before then. We do not recommend buying a retirement home unless you are four or five years from retirement. Children can change their plans for college, and your work situations may change, which can affect your ability to carry two home mortgages.
Additionally, you need to care for the second home, i.e., cutting the grass, the heating and cooling. This is in addition to general maintenance. That can be difficult to do if it is not a home you visit frequently, for example, if you were living in Atlanta and purchased a house in Florida. If the home were close, you should be able to visit on the weekends and summers, for example, if your dream home were in the North Georgia Mountains.
Even if you are considering a resort area—with depressed prices and incredibly low mortgage rates—we only recommend buying if you will retire within five years. Some of the many aspects to consider include being able to manage a rental property, if your plan is to rent the home until you are ready to move to that location. You have to consider the rental market, as well as how you will manage repairs and maintenance from a distance. If the dream home is a resort area, will you still have the same interests if your health changes? For example, if you wish to retire to a golf community, will you still want to live there if your health were to deteriorate and you were unable to play golf?
At Henssler Financial we believe you should Live Ready, which includes understanding how to plan for your future and the variables involved. If you need help making decisions that may affect your retirement years, our experts are here to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
