When is the Best Time to Right Size Your Life?

One of the most common dilemmas faced by retirees is when should I downsize and move to a new place? It’s never easy to decide when to leave the family home you have lived in for decades. I have clients that have been in the family for over 60 years.

Here are 5 points to consider

– Housing needs to change over time. Your 4 bedroom 2 storey house with a large backyard was perfect to raise a family, but the kids have moved out years ago.

– Many clients I work with are currently only using 3 rooms (living room, kitchen & bedroom), for day-to-day living. The remaining rooms are unused. They are paying to heat, insure and maintain the entire house.

– Don’t try to time the market for a few thousand dollars more next Spring. Are you are going to spend the entire Winter stuck in the house paying someone to plow the snow? it might be easier to sell sooner so pick the time that is most convenient for you,

– Homes do require upgrades and multiple things may need to be replaced. Spending $10k, $20k, or more to enable you to stay another 1-2 years is very expensive and likely to bring a limited return on resale.

– Are you finding it financially difficult to live in the home? If it takes all of your income each month to live and you are dipping into savings each month to cover housing costs then a right sizing move may make sense.

Eliminating expensive housing costs while simultaneously freeing up equity to invest and produce income can change your financial situation.

Invest and produce an income

If you invest $300,000 (using RBC Managed Payout Solution or a similar product) it will pay approx. $1500 per month in income and you can eliminate $500 per month in housing expenses, giving you $2000 per month to live on.

Hopefully these points will give you some things to consider in making your decision of when is the right time for you to the right size.

Downsizing is a process but a rewarding one. It can be an opportunity to right-size your life and move onto the next chapter with more independence.

Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991, Roy specializes in helping retirees with their later in life real estate transactions. Call Roy at 902-497-3031 or contact Roy here

When you list your home for sale, don’t overlook the importance of your exterior landscaping as a tool for increasing the volume of potential buyers and selling your home more quickly. In real estate, while you can’t always “tell a book by its cover,” having a home with curb appeal is more likely to get people to request an appointment after seeing it on a website or from a drive-by. A home that looks neat and inviting from the outside is likely to be the same way inside.

Landscaping Upgrades That Add Resale Value

Just as with other upgrades you do to your home before sale, you should not go crazy with exterior landscaping or add features with questionable resale value, such as a pool, water feature, or a large garden. You want to present property that is well-maintained and attractive, while not seeming overly difficult to maintain. As a result, planting some colorful flowers, adding a hanging basket to the porch, upgrading the exterior doors, refurbishing an existing deck or adding a new one, and playing an attractive stone walkway may be well worth the money in resale value and speed of sale.

According to Carson Arthur, landscaping designer, often seen on TV home shows, great landscaping can increase a home’s value by 7%, which amounts to $42,000 on the $600,000 home. Patios may add a 12% return, while decks, especially low to no maintenance types, have a 10% to 15% rate of return. An awning, pergola, or even a tree that offer backyard shade might increase your home value by $2,000-$3,000 each. In general, adding trees, a bench in your front yard, a stone walkway or driveway, and attractive plantings are among the key upgrades that pay off.

“Preparing to Downsize” please click here

Managing Exterior Landscaping

If you are selling your home because you are no longer able to keep it up as you like, the whole concept of exterior landscaping may be overwhelming. Given the extra value that great landscaping can add to your home, hiring someone to do the work will be well worth your investment. If you are up to it, putting some effort into the outside of your home can be the perfect closure for transitioning to a new place.

Any home will benefit from neatly trimmed lawns, gardens, and shrubs, along with a patch of color. If you don’t have much to spend on updating a moderately priced home, hiring a neighborhood kid to clean up the area, cut your grass, and plant some flowers might offer the boost you need. If you have a higher-end home where you are hoping to extract maximum value, or if your landscaping is outdated and out of shape, you should go to the next level of hiring a landscape designer or landscape architect to plan out your improvements. A professional will be able to suggest the proper plantings and upgrades and even do them in an eco-friendly way that appeals to many modern buyers.

Ask Me About Curb Appeal

If you are ready to sell your home and wonder whether your property needs more curb appeal, give me a call for an honest assessment as to what you need to do before we list your home.

In our era of identity theft, title fraud costs Canadians $300 million annually. It’s a serious problem that often impacts older adults.

What is Title Fraud?

Title fraud occurs when someone other than the lawful owner transfers the property to themselves or obtains a new mortgage to pull cash out of the house. This leaves the true owner with a mortgage registered against the property. Scammers are attracted to higher-value properties that are already mortgage-free.

The scammers will place a fraudulent mortgage against a property and disappear with the money. No payments are ever made. Months down the road, the mortgage company begins to attempt to collect on the delinquent mortgage. This is often the first time the homeowner becomes aware they have been defrauded. While the homeowner is trying to prove they didn’t take out the mortgage, the mortgage company is starting to go thru the collection and foreclosure process.

Seniors can be popular targets for several reasons:

– Many seniors have their homes paid off making it easier for thieves to place a mortgage on the property.

– If you are a snowbird and winter down south, having your home vacant for months makes it a target.

Relatives or caregivers can take advantage of people suffering from a loss of mental capacity and forge a power of attorney to gain control of a property and then sell or mortgage the property.

With so much personal information available on the internet, it has become even easier to commit title fraud. People lose their homes to this crime.

Protecting Yourself from Title Fraud

There are a variety of legal actions a person can take to recover from fraud. What can be done to prevent title fraud in the first place? The first thing is to be vigilant.

Before signing real estate paperwork, it is good practice to consult your own lawyer. Be clear about what you are signing. Legal language is confusing to anyone.

Acquire title insurance

Title insurance is an insurance policy that protects your home from title fraud as well as other title problems. Buy title insurance at the time of purchase, but it can be added later. It is good for as long as you own the property and only needs to be purchased once.

The cost is as low as a few hundred dollars. I recommend all my clients invest in title insurance.

If you plan on living in your home for the next few years it is worthwhile protection. There are several different title insurance companies that offer policies. Don’t be a victim of title fraud! Your home is perhaps your largest personal asset.

At 65, will you still have a mortgage hanging over your head? Are you a Boomer over 50 who will still be making mortgage payments once you reach normal retirement age? If so, you’ll be like 35% of other senior homeowners, according to the Canadian Association Of Accredited Mortgage Professionals. As a senior, a mortgage obligation can take money away from the resources you need to carry you through the remainder of your life. Unless you are willing to cut expenses, you could be in trouble.

Why Seniors May Still Have Mortgages

With the 25-year mortgage common, you might be in that situation if you took out a mortgage past the age of 40. You may have become a homeowner later in life, but many seniors are still paying mortgages because they refinanced their homes at an earlier time to pay for a wedding or a loan to their kids for a down payment or some other purpose. Your thinking might have been that the kids would inherit the money anyway, so they might as well have it when they need it.

The Trade-off For Having A Mortgage In Retirement

This generosity makes some sense, but the great risk is that it will tap into monies that seniors need to live on. With people living longer, the average senior will need to keep working into retirement, cut expenses, and not take on a new debt areas to make it. In contrast, according to Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc., many seniors are not changing their spending habits to match their coming reality. Seniors are both adding new debt and taking on new mortgages which could put them in trouble if interest rates rise and the payments follow. “It could send them into a tailspin,” says Schwartz.

How Do Your Finances Line Up?

During your retirement years, what does your financial picture look like? If you are thinking of taking out a new mortgage or even if you find yourself holding a mortgage or considerable debt, you need to ask yourself some hard questions:

How far into your retirement does or will your mortgage extend?
How far into retirement are you planning to work?
How much debt do you have and how do you plan to extinguish it?
Are you making it every month or feeling squeezed?
Are you prepared to cut your spending so you can both pay off your debt and save for the future?
Do you have any other assets you could extinguish to reduce your debt or monthly living expenses?
Whether you are paying house or only it out right, can you still afford the extra expenses associated with homeownership, such as taxes, landscaping, repair, and maintenance?

The answers to these questions might influence your housing plans in your retirement years. Your concern should be to have the resources to hold you through the rest of your life.

Call Me For Expert Senior Housing Services

Looking to sell your home? Give me a call today. When you are buying or selling a home, don’t waste time. Give me a call for experience, market knowledge, correct pricing, and a sincere interest in helping you fulfill your real estate goals. If you are ready to sell your home for maximum value, the best place to start is by clicking here and scheduling an appointment.

Over time our housing needs change. The kids leave to get married and start their own families and your housing needs changes. My senior clients decide to sell and move to something smaller. This process Is called downsizing. Not just getting something smaller but finding a new place more suitable. More accurately called Rightsizing.

Common questions I am asked by my clients are “When do I downsize and sell my home?” These are really two questions rolled into one. The first question “what time of year is best to sell” and the second “based on our situation, when is the time for me/us to sell”.

The first question has a very simple answer. Whenever you want to sell can is the best time. There are certain times of the year that have unique advantages. January to March period are good because there are fewer homes listed for sale means you have less competition.

The selling market in the Spring / Summer market (April to July) usually the busiest market and when the most buyers are actively looking. Spring and Summer are also when most homes are for sale and you have the most competition. The Fall market (September to November) usually the second busiest market of the year.

The second question is difficult to answer because situations are different for everyone. To decide for yourself when you to make a move, ask yourself these questions.

How much longer can I realistically stay?

If you are in the mid-60s, in good health, still able to mow lawns & shovel snow, and enjoy gardening, staying for 5-10 years or longer possibly makes sense. But if you are in the ’80s, experiencing health issues, unable to maintain the property, and rarely able to leave your home, make the move.

What are the advantages of staying?

Emotionally it’s hard to leave your home, but look at it objectively and make a list of the advantages of staying. People stay to maintain their independence. However, selling your home and moving to accommodations more suitable to your current needs could increase your independence. You may end up closer to necessary amenities and family.

What are the financial benefits of rightsizing?

The vast majority of my clients and seniors, in general, prefer to move to a rented apartment to enjoy a maintenance-free lifestyle. This frees up the equity in the home for investing to produce an income. If you netted $300,000 from the sale and invested it at 3% it would produce $9,000 in annual income.

Eliminating expenses like property tax and maintenance you could free up another $5,000-10,000 (or more) per year. Let’s say an average of $7,500. Add that to the $9,000 and it gives you $16,500 to put towards the cost of the rent. And of course, the original principal stays intact and untouched.

Call Me For Expert Senior Housing Services

More Canadians are planning to use their home to fund their retirement and rightly so. Many people have the majority of their net worth in their homes. Being equity rich and cash poor is common. Over time our housing needs change and your 2 story, 4 bedroom house may simply be too much house for your current needs.

There are several different ways to access the equity in your home to produce income. If you want to stay in your home but need income, consider a reverse mortgage. Depending on your age, you can access between 10-50% of your home’s equity. The minimum age to qualify is 55 and the older you are, the more equity you can access. You can borrow a lump sum amount or set it up to pay a monthly income. You do not have to make any payments and the mortgage doesn’t have to be paid until you die or sell the home.

Request Your Complimentary Copy of My “Preparing to Downsize” Report

Another option would be a sale and leaseback arrangement. If you want to keep the home in the family but either can’t afford the property or need to access your equity you could sell it to one of your adult children and simply rent it back from them. This allows you to access all your equity while eliminating the costs of mortgage payments, property tax, and maintenance. You simply pay a set rent each month. You can then invest the equity to produce a monthly income.

If selling to a family member isn’t an option, then selling it to someone else is a third option. This would allow you to buy a smaller home, a condo or move to an apartment. Once the home is sold and you have received your equity you have many different options to invest the money to produce an income. While you should consult a trusted financial planner about investing the money, here are some options to generate income and lower taxes.

Top up your RRSP

If you or your spouse are under 71 and have an unused room in your RRSP you could contribute each year until you turn 71. This lowers your taxable income for each of those years.

Top up your Tax-Free Savings Account

You can immediately put as much as $52,000 per person into a TFSA and subsequently add an additional $5,500 per person per year going forward. TFSA won’t initially generate a tax deduction like an RRSP, but all interest earned is tax-free.

Purchase an Annuity

You can take a lump sum of money and purchase an annuity which will then pay you a monthly, quarterly, or annual income for either life or a set term (until age 90). This will give you a secure predictable income stream. There is also an option to have a beneficiary get a payout should you pass away before the end of the term. If you choose a life annuity you don’t have to worry about outliving your retirement income. If you purchase an annuity at age 71 when you are collapsing your RRSP, it defers income tax because you only pay tax as you receive the income.

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