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2015-09-09 19:41:55

Seniors...Stay put or Sell and Rent?

Seniors – Stay put or Sell and Rent?

Here’s a question that seniors everywhere are asking themselves... Should we sell and rent? Or stay in our home.  Most seniors enjoy their current home and have spent 30 plus years making it perfect for them. So why should they sell?  They have great transportation links, a lively urban scene, large backyards and nearby parks for their dogs to run around in but talk of a possible pullback in housing prices has some seniors thinking.. Is it time to sell? Invest the proceeds and rent their next home?

The Real Estate market could be the deciding factor.  You could benefit by making an orderly exit from the housing market sooner rather than later to protect yourself against a decline in home values. This option must be considered if you're sitting on huge gains in housing, you plan to use your home equity as part of your retirement plan, and you accept the high probability you'll end up in a condo - owning or renting.

It may come down to lifestyle more than finances that impacts the decision of whether to stay or sell.

Many seniors bought their homes for around $100,000 and are now watching their neighbors sell their homes for close to $1,000,000.  The problem is if you rent you could be paying from $3,000 – $5,000+ per month  to rent a similar size town home to what you are use to or even $2,500 –$ 4,000 for a new condo. That could easily eat up half the money from the sale of your home.  10 years of renting at $5000 per month is $600,000 leaving only $400,000 left of that hypothetical million your neighbors are getting? You could down size and purchase a smaller residence a little further out in the suburbs or the country for a little less than half, perhaps $300,000 - $400,000. Of course a 20% drop in the housing market could be a quick $200,000 loss or the equivalent of 4 years of future renting.

It all depends on how you view your lifestyle and how you manage your finances.  If your home is well maintained and you don’t have to dig into your equity, you might as well stay.  If it is a struggle to pay the up keep and you are barely balancing your income to your expenses it may be time to sell. If you would like more specific advice you can always book an initial consultation with your financial advisor, bankruptcy trustee or credit counsellor.