The kids are grown. Retirement is on the horizon. Planning for this next life goal is important and real estate can play a role. Maybe you’re looking at a smaller, less labor intensive property to allow you time for other activities at this point of your life.
Some homeowners who sell a large home to downsize have equity in their home and get cash back when they sell. What to do with this cash becomes an important factor to consider. Your American Federal Banker can help you look at options.
Options to consider include:
- Placing the cash toward the purchase of a new smaller home, often a condo or retirement villa
- Making a small down payment on a new residence and investing the balance of the cash; or
- Dividing the cash, with half going toward a down payment on a new home and half into an investment account or emergency fund.
With a move to a condo or townhouse, home owners will want to consider association fees and what’s included in the fees, such as homeowner’s insurance coverage, property upkeep like snow removal and lawn mowing, and the use of recreation facilities.
If a second home is sold at a profit, there can be tax consequences. Discuss your individual situation with your American Federal Banker.
This information offers general advice and is not intended to be legal or tax advice. Consult your attorney, tax accountant or other professional.