Rethinking Real Estate

Retirement is a good time to rethink your real estate requirements.  Not only may you no longer need a large house, but downsizing can also help add cash to your nest egg.  Below are issues to consider as you contemplate where to live in retirement.

1. Relocating.  If you plan on moving, it is important to do your research on towns and neighborhoods, including crime rates, access to public transportation and the taxes, insurance and other benefits of carrying your new home.  Also, be aware of health care options. 
2. Downsizing.  While you may be tired of the upkeep with your current home, it is important to understand what smaller square footage will bring.  Moreover, just because a place is smaller does not mean it is less expensive.
3. Renovation.  If you have the time and the money, now may be a great time to make upgrades to your home.  But rather than installing that pool, it may be a better use of funds to refinish wood flooring or install grab bars in the bathrooms.  These improvements may be more useful in retirement.
4. Mortgage.  Retirement is not the time to take on new debt, even if mortgage rates are low.  Living in a mortgage free home relieves you of a big chunk of your housing costs.
5. Real Estate Investments.  Although some retirees make extra income from rental real estate, the investment is fraught with pitfalls.  Dealing with tenants, finances, and the like can be a huge responsibility that requires time, energy, and real estate smarts. It is a gambit that can pay off, but think hard and long before you take the leap. 

See Tim Sightings, 7 Real Estate Questions for Retirement, U.S. News and World Report, Dec. 30, 2014.