Milestone Purchases, Part 3: Purchasing your family’s retirement property
Once you’ve lived for long enough, you’ve certainly come across a few financial milestones in your life. Starting a family and buying a home is one obvious one that jumps to mind; another is the act of starting a new investment portfolio and building up wealth for the future.
Later on in life, another key milestone you’ll come across is the moment you decide to purchase a retirement property for your family. For many people, the post-retirement home is a very different place from the house where they spend many of their earlier adult lives. Once you hit retirement age, you’re usually without children in the house and you want a place that’s smaller, easier to manage and just generally more relaxing.
This means finding a new home that’s perfect for your changing life situation. You don’t have to wait until you’re actually retired to make that big purchase – if you’ve got the money to spend now and you’re willing to shop around, there are all sorts of options on the market. Invest early if you so desire.
Many retirement housing options abound
When looking for a spot to live comfortably after your retirement, you’ll find a few different directions you can take your search. According to the Australian Competition and Consumer Commission, there are several different types of retirement homes available including self-contained villas, semi-detached units and high-rise apartments. All of these can provide a nice, safe space to live, even in your later years.
They’re not necessarily great investments, however. It’s quite possible that, if you care about having a valuable home that will provide a real asset for the family you leave behind, you’re better off getting a home loan and purchasing a house. Real estate is one of the most stable investments you can make, and by putting a payment down now on a house, you’ll be purchasing something that can appreciate in value significantly over the course of your ownership cycle.
Understanding the financial difficulties
Some will eschew purchasing a house, thinking that a simple retirement village arrangement is easier than buying an entirely new property as all it requires is a simple monthly payment routine. However, the trouble with this is that there are often hidden costs included with this lifestyle.
The Sydney Morning Herald recently reported that various fees and limits on capital gains can make it next to impossible to come out ahead when you spend on space in a retirement village
“You certainly don’t buy into a retirement village to make money,” said Richard Andrews, CEO of the Find My Retirement Home service. “It’s a lifestyle choice, and retirees need to keep that in mind.”
But what if you want more than a lifestyle choice? What if you’re in the market for a serious investment? If that’s the case, your likely best bet is to speak with mortgage brokers about how they can finance your next big milestone purchase.
Talk to the experts in property investment
Spending the money to buy a new property can be daunting, even if you’ve done it before and have a relatively good handle on what you’re doing. No matter how experienced you are, it always helps to have expert brokers on your side who have navigated the loan approval process many times before over and know all the angles.
At Mortgage Choice, we have a team of professionals who can help, and we also offer valuable assistance such as property investment loans. Whatever challenges you’re facing with the next milestone purchase in your life, we can help you move past them.
