In what follows below, a long-established professional in post-retirement accommodation issues will deal with a range of frequently asked questions relating to this area.
What are the main drivers behind people seeking specific retirement age accommodation?
Surprisingly, the issues that get people looking for retirement accommodation are not typically negative ones!
True, some people may be, for example, less mobile as they age and therefore not inclined to relish large staircases in their property (etc.). However, the majority of the reasons are positive and diverse, including:
- during their working years, many people have to compromise in terms of the location of their property, due to needing to think about convenience for accessing their workplace. That goes away once retired and you can live where you want to live, rather than where your boss wants you to live;
- typically, people want to spend less of their time on housework and property maintenance and more on recreation. So, smaller properties may be more practical, particularly if any children are now living their own lives in their own accommodation;
- local communities tend to start to become more important as a requirement. Many retirement-age people are looking to be part of an established social structure, rather than perhaps living in a suburban commuter-oriented landscape.
What are the advantages of leasing, as opposed to purchasing, a property outright?
Do please note that this is not qualified financial Investment advice.
However, broadly speaking, selling your existing property and then investing some of it in accommodation solutions that are designed to provide you with accommodation, whilst keeping the balance as disposable income, may offer you a more luxurious lifestyle than might be achievable should the bulk of your money continue to be tied up in the bricks and mortar of a property you have purchased outright.
Can I borrow money easily to purchase or renovate property?
One of the hardest things to grasp emotionally is that once we approach retirement age, we become typically a far less attractive lending proposition for many institutions than would have been the case at the age of say 30 or 40.
Of course, a lot will depend upon your individual financial position and things such as your existing relationships with banks and other potential lenders.
On the whole though, it’s probably fair to say that you may find it more difficult to borrow large sums of money for the purposes indicated above, unless you offer the lender some form of security (typically any existing property you might own).
Can I let out a property I own and use the income for accommodation?
Yes, subject to prevailing state and local authority laws and regulations.
Your letting income will also typically be liable to taxation.
An important point to ask yourself before heading down this route to funding your retirement accommodation, is whether or not you wish to face the sheer hassle of letting out an existing property? The administrative and logistical overheads here can be substantial and there are typically requirements for special forms of insurance etc. That’s to say nothing of the issues that can arise with “problem tenants”.
You might also wish to consider how you will continue to pay for your retirement accommodation if you suddenly lose your tenants and encounter delays in replacing them – thereby resulting in extended periods of zero income.
Do seek further specialist professional advice on this one if you are contemplating it but be warned, this is typically not for the faint hearted and should not be seen as a sort of ”retirement-hobby” form of income generation.
Can I use my property to fund new accommodation if I still have an outstanding mortgage on it?
Potentially, yes you can.
You could sell your property, pay off any outstanding mortgage and invest the balance or part of the balance in a solution that generates sufficient income for you to pay for your new retirement accommodation. Just as earlier on in life, if you were moving house or wanted to sell your existing property with an outstanding mortgage on it, you can do the same in retirement.
What role does health play in selecting retirement accommodation?
As stated when answering an earlier question, in the majority of cases people look for retirement accommodation for positive lifestyle reasons rather than those associated with health issues.
However it is a fact of life that as we age, our requirements of the accommodation around us also change. For example, we may no longer have the energy or indeed time for/interest in, maintaining very large gardens and in some cases we may no longer welcome multiple floors and staircases in a property etc.
So, yes, for some people, looking for suitable accommodation commensurate with their overall health and fitness levels is a significant factor.