HOW DOWNSIZING CAN SAVE YOUR RETIREMENT IN TAMPA
Whether you have grown tired of the landlord title or need to sell your rental property for other reasons, make sure you are aware of the tax implications with selling your rental property. It is important to be aware of what awaits for you after selling a rental property. We will break down some of the things you need to know, and hopefully help you find a solution.
Retirement is looming and with retirement comes a major decision. Do you stay in your current home or do you downsize? If you’re like most homeowners nearing retirement, you are most likely sick of mowing the lawn, paying absurd amounts of money for heating and cooling a nearly empty house, not to mention all the capitol you continue to put into a house that’s potentially too big for your current situation. Why not downsize?
With downsizing comes hard decisions you need to make. Should you stay here or move there? Should you move to a condo or single-family home? To buy or to rent?
Here or There?
A common thought is to sell your bigger house and move and into a smaller house. Then you’ll have extra money to pad your retirement fund. Before jumping to such a simple conclusion, you’ll want to think of the following before you decide whether staying in your current city or moving to another is right for you.
- Moving costs
- Realtor fees when selling/buying
- Tax bill
- Insurance premiums
- New furniture (for new climate)
- HOA fees
You may be living in an area that has a lower tax bill and higher insurance premiums, yet the opposite could be true there. These are all costs and expenses that you must calculate out to determine whether or not downsizing in your current city or another one is right for you.
Condo or Single-Family Home?
On average, condos are cheaper than the single-family home option. You also will be rid of the responsibility to make the fixes you’ve had to take care of living at your current home. But with cheaper and convenience may come restrictions. Before making the choice to move to a condo make sure you check the HOA fees, rules and restrictions. If these fees and rules aren’t in alignment with your retirement goals, then a condo will change from a blessing to a curse.
If you are okay with the fees and HOA rules and restrictions, then ask yourself if you are ready to live in shared spaces. This can be a big change for you if you’ve lived in a single-family home for years.
Buy or Rent?
Now if you’ve owned a home most of our life, you may be more inclined to buy rather than rent. But keep some of these things in mind, renting might be a great option for you when downsizing.
But how long do you plan on staying in the new home? If you plan on staying less than five years, then buying isn’t worth it when you calculate in the closing costs and home maintenance compared to the equity growth in the home. But if you plan on spending longer than five years, buying is a great option.
Another thing to keep in mind is that rent rises each year, yet a mortgage payment wouldn’t. Having fixed expenses can lead to a more enjoyable retirement especially when your income is usually fixed as well.
Some Other Benefits of Downsizing for Retirement…
Freedom to Travel:
Many people work their entire lives in hopes to retire with dignity and enjoy life. Often times a large mortgage payment can get in the way of this reality. Downsizing and selling your current home can give you the freedom and capital to realize your dreams of travel and enjoy your retirement.
Move Closer to Family:
Not only are you saving money by downsizing, but you now have the opportunity to move closer to family and purchase a home that fits your retirement budget. Moving closer to family will surely add to the joy of retirement.
Frankly, you won’t have nearly as much upkeep when moving to a smaller house. It won’t only cost less monetarily, but it will also take less time to manage your residence, giving you more time to do what you love and maybe even pick up a few new hobbies.
Bottom line is that when looking to retire, downsizing is a piece of the puzzle. If you are still unsure whether or not you want to downsize, keep analyzing the pros and cons until you come to a conclusion. If you want to downsize for retirement, we offer a fast and easy home selling solution. We buy homes in any condition so you do not need fo fix up your current house or clean it. Take what you want and we’ll take care of the rest. We make the downsizing choice as easy as possible for you. Fill out the form below or give us a call today 813-296-6200 to find out how we can help!
Retirement is YOUR TIME! Your time to really enjoy life and do the things you want. You deserve to have a great retirement and downsizing may just help you achieve that.