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If you're buying a new house for retirement, it's important to consider certain factors. This purchase may call for even more careful consideration than your first home because your house for retirement will need to potentially meet your changing needs as you age.
If you're wondering what to look for when buying a retirement home, consider these three factors in your decision-making process.
1. Housing Costs Beyond Your Mortgage
It can be easy to forget that the cost of buying a home for retirement doesn't end with qualifying for a mortgage. In fact, even if you're able to pay cash for your retirement home, you're not done with housing costs.
You'll still have to pay property taxes and maintenance costs, which may be higher than you're used to if you are no longer able or willing to do your own maintenance in retirement, and possibly homeowners association dues or other fees. The average annual cost for homeownership is about $9,400, including property taxes and maintenance costs, but not mortgage payments, according to research from Zillow.
That's why it might help to crunch the numbers on the cost of a house for retirement before you commit. If you can just barely afford the mortgage on your retirement home, then you could find yourself overwhelmed by the ongoing costs of living there. Consider figuring out how much you can expect to spend annually before you commit to any particular house. You might consider drafting a retirement budget based on your expected income and other likely living expenses such as health care and travel.
2. The Lasting Livability of Your Home
Aging in place is an important goal for most retirees. In fact, 75% of Americans aged 50 or older intend to remain in their homes when they retire, as opposed to joining an assisted living facility, according to AARP.
However, not all homes will be equally friendly to your changing needs as a retiree. If your cottage only has second-floor bedrooms, several steps from the front door to the street, narrow doorways or showers that require you to climb into deep claw-foot tubs, then you may find it more difficult to navigate the house as your physical abilities and needs change.
Although one's own potential future frailty may be an uncomfortable topic to explore, purchasing a house for retirement can be a good opportunity to make a housing choice that you can easily age in. Looking at houses that take advantage of universal design, which helps ensure the home can be used by all people without the need for adaptation, may help you find a house that's a good fit for your retirement.
There's a reason why "location, location, location" is the classic mantra of real estate value. Your dream house may not be a paradise if it's in a location that's not a good fit. There are several factors to consider in terms of location when searching for your house for retirement.
People often dream of buying a house for retirement in their favorite vacation spot. But just because you love a place during its best season doesn't necessarily mean you're ready for its hurricane season or winter weather. Thinking about what climate you want throughout the whole year may help you select a desirable location.
You may not be concerned about the local school district or the access to public transportation, but a future buyer might be. Your home is an asset that you or your family may want to sell eventually. Getting a deal on a home that no one else wants may not be a good decision.
Local Amenities & Services
Your needs may change as you age, so you might choose to retire in a place that offers the kinds of amenities and services you might require. For instance, will you be able to easily see specialists in your area, or can you only rely on primary care if you need to go to the doctor? Asking local retirees about their experiences might help you determine if the home you're considering for retirement is in a location that will help meet your needs.
Finding Your Home Sweet Home
Knowing what to look for when buying a retirement home can feel a little overwhelming. But taking the time to think through your current and future needs, as well as the full financial implications of your housing choice, may help you find the right home to call your own while you enjoy your retirement.