Did you know that the average length of time that someone keeps their house is 7 years? This simple fact is incredibly important. You may ask, ‘Well, why does that matter to me?’. It matters because there is a lot more to buying your new home than the emotional aspect of the purchase. You may think that your new home is your retirement home, but statistically it won’t be. Life changes. Perhaps you will need to downsize, upsize for new family members, relocate for your job, etc. Because the average timeframe in a home is 7 years, there are many more aspects to purchasing your new home that you need to think about and take into consideration.
A few examples are
1) Will my home be part of my financial retirement/wealth plan?
2) Does the area I am buying in maintain a strong real estate value?
3) How will my home value in seven years?
4) Do I plan to make improvements on the home?
All of the above are crucial for home buyers, but often get overlooked or given a low priority. In the past, someone’s home used to be a foundation to their retirement plan. The idea was that the house would appreciate every year, be paid off by retirement, or be worth more than what you invested when you sell. Today that isn’t as much of the case and usually a homeowner is lucky if they break even on what they paid for it. This situation is not from smart investing, and can be easily avoided. This is where smart buying truly comes into play. The market is incredibly ripe for smart buyers to invest wisely in their next home and be part of their retirement plan. Even if you are one of the many that only stay in this new home for 7 years, you can make a smart purchase and make money when you sell or rent it.
How, you ask? Easy. Take the items listed above and factor them into your purchase. Items two and three are quite similar, but will reflect different points in time based on your financial strategy. Item four will offset your final financial gain either positively or negatively. Sometimes a home is a great initial ‘deal’, but after you add up all of your improvements you may find that you come out losing.
With all of the items listed, and a proper Real Estate Agent that knows how to buy – the Smart Way – you can be well on your way to reaching your future financial and retirement goals.