Downsizing? Retiring? Plan it right!

As the Baby Boomers retire and as some of the Gen Xers approach empty nesthood, the reality of downsizing is something more and more people are having to deal with. For some, the yard and house are simply too big to look after anymore, maybe they want to sell their home and get into something smaller so they can cash in their equity and use it for retirement funds. Maybe they just think it’s a good time for a lifestyle changeor maybe the idea of having to navigate stairs day in and day out as they get older is enough. There are a myriad of reasons that make people get a new home at this stage in life but it’s something many go through and are going through now.

Before we get into financial ideas and popular kinds of properties for those who are downsizing or retiring, let’s talk about the first barrier I typically see for people at this stage. Stuff. Lots of stuff.

If you’re retiring or downsizing, you’ve probably not moved in quite some time.  Your home, and nearly everything in it, is associated with some sort of memory, hobby, interest or value.  There is probably also an awful lot of junk that you have held on to for one reason or another.  Sorry to be the bearer of bad news, but you’re going to have to make some hard decisions on what you really need to take with you, what you should give to friends and family members, what you’re going to sell, what is worth paying to have put in storage, what ends up getting given to the thrift store and what gets thrown out.  Of course, what size and type of property will be the big determining factor on how much of what you end up getting rid of, but I think it’s good to be mentally prepared for this before you start looking at properties and not during or after. Doing it ahead prevents a lot of confusion and second guessing for you.

Next, we must consider what everyone who is buying must consider very early on. “What can I afford?” In order to figure this out, you will need the help of two people:

Talk to your Realtor (that’s me) and get an idea of what your place is worth.  You have grown quite attached to your home and like every other Seller you will want to get as much as you can for it. The price estimate I will give you will reflect that. It will also, more importantly, reflect the reality of the market we are currently in. Having an idea of what the place is worth will help you with your conversation with the Mortgage Broker much better than if you just talk to them assuming your assessed for taxes value is accurate.

Talk to your Mortgage Broker. Maybe you don’t need a mortgage as you have mostly or entirely paid off your home and have enough left to buy a property outright. That’s great news! If, however, like many people you could use a little bit more dough to get the place you want or if you think today’s very low interest rates makes it worth getting a mortgage and investing that money in something else, so be it. You’re probably used to dealing with banks directly, but I would suggest a Mortgage Broker for reasons I won’t go into here. Because there’s another point we need to get to…

Types of properties that are popular with those who are downsizing or retiring:

Condos and Townhouses are as a rule less expensive than a house. In most cases you don’t have to do any gardening, but some place you have the option. You don’t have to worry about getting out there and fixing the roof, gutters, maintaining the windows or things exterior as that’s a big part of what the monthly strata fees are for. The caveat here is to make sure the strata is run smoothly and that you take part in at very least the AGMs to make sure you have your say in how all these things are done.

Patio Homes, like condos, are a form of strata property. That is, it’s a place where you have your own space that’s just for you but there is common property which is shared and maintained via the expenses of the montly strata fee. Each strata has its own bylaws. (i.e. pets, age restrictions, rental restrictions and so on) Patio homes will have their own patio, outside doorway and are almost always built just on one floor so the stairs are not an issue. You will in most cases have a little green space in front and/or in back of the unit where again you may or may not have to maintain yourself depending on the strata. This listing of mine is an example of this.

Ranchers (aka bungalows) are a one floor house option for people who are willing to give up certain conveniences of having many things on the exterior of the propertry mostly taken care of for them so they can have more freedom to do what they want with the property and as a rule have more privacy. This option make for a more expensive purchase, but one way of looking at it is that the money is going into equity rather than strata fees. (But keep in mind that the owner has to pay for the exterior’s maintenance directly now.) You will certainly have more freedom to do what you like in and around your home should you buy a rancher. One example of such a property is this one which was listed with me fairly recently.

Mobiles are a very inexpensive purchase counterbalanced by a monthly fee for the lease of the land. As a general rule, they will be situated in a mobile park on a lot where you can do some gardening if you like, many of them have sun room additions or a patios on the outside like this one.

Retirement communities: There are condos, mobile home parks, townhomes and more that have an age restriction that encourages retirees. Most of them are 55+ (I have this mobile listed for example that is one of those.) but others might be 45+ like this condo I have listed.

….and whatever else fits your tastes and budget. Because after all, this post is not about what is definitely right for everyone who is downsizing or retiring in Nanaimo. It’s about what the most popular options are and what some of the thinking points are for people who are doing so.

So, as you mull over plans to retire or downsize, I would recommend taking these points into consideration before you make any firm decisions. Whatever you end up doing will of course have to be customized to you though, and that’s part of the services I offer.


Ryan Coffey