BA50 Talkers
When you have worked a lifetime to retire in peace, you want value for your money when you buy the home that you finally settle down in. Retirement property purchases, though, require just as much care and diligence (and a good set of tax estimators and calculators) as any other kind of property, and mistakes are just as easy to come by. It’s important to exercise diligence.
First, trust in yourself, and not others
There is no substitute for self-reliance. Not only does it help to be able to tell a good deal apart from a poor one, knowing the basics of the market yourself can help you push back when well-meaning but poorly trained family members or real estate agents attempt to influence you. It can be an incredible confidence booster going into a property deal with the ability to understand what you see.
If you’re buying in a retirement community, you need to be extra careful
In contrast with the luxury that American and Australian retirement communities promise their residents, British ones tend to be modest and utilitarian setups. According to WatsonBullPorter.co.uk, the well-known real estate business, the depressing ways in which retirement communities are run might explain why no more than 1% of British retirees make the choice to live there, compared to close to 20% in the US and close to 15% in Australia.
While promoters of retirement communities do realize that there is huge demand for quality offerings and plan to bring projects online sometime in the future, most available choices now at this point do tend to disappoint.
There’s the investment angle to think about, too
If you do find something that seems good enough to consider seriously, it’s important to think about the investment value in such a purchase. You cannot expect a unit in a retirement home to appreciate in value the way a regular house would. In fact, in most cases, they quickly lose value, a tendency that has attracted inquiries by the Office of Fair Trading, parliamentary debates and litigation. With only a small number of people interested in buying retirement homes, it can be hard to find buyers, as well.
It’s a much better idea to simply invest in a regular home
Retirement communities attempt to sell themselves on their ability to offer all the services that you could need in retirement, together with the company of fellow residents. It’s important to understand, though, that most of the services that they may provide could be available in regular homes, as well. There are hundreds of businesses that cater to the needs of the elderly, and it’s easy to engage them. If your needs aren’t that great, you might even spend less money on them than at a retirement home, where yearly maintenance charges were nonnegotiable, and tends to be as high as £10,000 a year.
Find a real estate agency that deserves your trust
If you have knowledge and personal experience of the real estate market and understand its complexities, you can certainly take up the search yourself, by finding a mortgage lender willing to offer a reasonable interest rate, looking for listings, making visits during open house events, hiring a home inspector to look for construction or other quality-related problems, investigating the neighborhood for agreeableness, negotiating for a fair price and scrutinizing the contract for effective buyer protection.
In most cases, though, people tend to not have experience in the variety of skills needed. In these cases turning to a professional buying agent at a reputed real estate agency for guidance and advice through the process makes a great deal of sense.
It can take much research to find an agent capable of competence and integrity, though, and it’s important to go through friends and family.
Make sure that you select the home that you can afford size
It’s important to understand that the mortgage and down payment that you agree to do not cover the entire purchase price. You need to come up with closing costs, stamp duty and other expenses before the title passes to your name. It’s important to be prepared for these. The mortgage itself isn’t free of complications, either.
Whatever the size of the mortgage you take up to repay now may appear, it is possible that it will begin to become a burden somewhere down the line, when inflation eats into your income and savings. On a fixed income, coping tends to not come easily.
Even if the mortgage does give you no trouble at all, it’s never a good idea to forget that there are certain fixed expenses that go with ownership. Even if you are able to afford buying a large home, property taxes, insurance, repair, heating bills and other upkeep can add up. It’s important to not forget to take the whole picture into account before you decide to sign.
Dylan Swift is involved with financial and retirement planning and is always keen to provide some tips and ideas to try and help retirement plans work out. He is a regular online contributor and writes for several different websites.