Baby Boomers are increasingly making property investments in Florida's various cities. Is this a wise decision or a daunting one?
The answer largely hinges on your current life stage, financial situation, and physical health. Should you consider downsizing or investing? Relocating or aiming for a more substantial property?
As Baby Boomers approach their retirement years, these questions can become rather overwhelming. While you might have accumulated significant wealth over the past three decades, the recent dip in housing prices over the last eight years could have eroded a substantial portion of your assets. This leaves many wondering about the feasibility of real estate investments in Florida today.
Numerous Baby Boomers have postponed their retirement due to the simple fact that selling their homes and downsizing isn't a viable option. Some may find themselves in a situation where they owe more on their homes than the properties are currently worth.
Boca Raton Realtor Adrienne Klein says, "This predicament often compels them to hold onto their homes until the real estate market rebounds. It seems that time has come. Perhaps not with the explosive growth some might hope for, but certainly, the market is showing more strength than it has in the past four years."
The number of existing homes sold has risen by approximately 8% nationwide, according to the S&P, and prices have surged by over 12% compared to the same period last year. As a result, many Baby Boomers are now contemplating whether to sell, rent out their properties, or downsize. The question looms: which option is more financially sensible?
In general, we understand that owning a property is often more financially advantageous than renting, particularly if you plan to reside in the property for more than five years. Is this something Baby Boomers should consider at this juncture? The decision ultimately revolves around the ease of living, which carries various implications, including maintenance, financial commitments, and responsibilities.
If the traditional retirement age of 65 is no longer applicable, retaining a property or investing in new real estate may become viable options for Baby Boomers. Purchasing a new property can sometimes strain cash flow, not only due to the down payment but also because of monthly expenses such as taxes, insurance, fees, and mortgage payments. Even for those planning to pay in cash, the inevitable costs associated with property ownership must be considered. One prudent approach could be to invest in a rental property, reside in it for a while, and then rent it out when you're ready to move on. This strategy allows equity to accumulate while retirees enjoy their newfound freedom.
So, what course of action makes the most sense for you? The answer is highly dependent on the multitude of variables within your unique retirement plan. Talk to a local real estate agent and your financial advisor about your plans for the future and if moving and retiring in Florida is in your future.