Many homeowners have experienced some form of shock when the global financial crisis hit our markets, and are wondering how to best secure their financial future, especially in terms of their retirement.
Owning a house is one of the most essential methods in wealth accumulation, but many people who are beginning to look at retirement, question whether they should still own their houses, or sell and rent. It’s a fact that one of your biggest expenses in retirement will be centred around housing, and this can become troublesome when faced with the fact that you aren’t earning an income.
We’ve put together a couple of reasons why you should consider owning your home, especially when you are about to, or are thinking of retiring.
Your investment increases
Yes, buying a house does come with hidden costs that you have to consider, but as an investment, it typically increases in value, which means your equity increases, and when the time comes to sell and move on, you will have actually contributed to your investment. Renting a home, on the other hand, is a flat out expense.
Owning a house you are comfortable living in provides you with a space that features stable and predictable costs. Yes, you will have to ensure you keep up with maintenance, and pay for issues yourself, but when you contrast those short term costs with the long term gain you get from your equity increase, it makes a lot of sense. Again, renting might be cheaper on a month-to-month basis, but it will cost you more each year as your rent instalments go up.
It offers stability
Our Australian housing market can seem somewhat heated, but if you have made the decision to buy a home for your retirement, you will definitely find a property opportunity that will be worth your while. If you’re not looking to retire close to a city, you should be able to find a two-bedroom or villa for around $500 000, which will offer you incredible stability.
How you choose to enter your retirement is up to you, and ideally you want it to be a time of joy and celebration of a life well lived. Owning your own property during this time can give you the financial freedom to make the most out of your remaining years.