How to Compete with “Billboard Agents” in Your Area (on a Budget)
There’s probably an agent in your area whose face seems to be plastered everywhere you look. You’re driving down the road and, boom, you see
4 Signs You Should Sell Your Home if You’re a Baby Boomer, Rather Than Age in Place
While they’re not entirely to blame for the lack of houses for sale, Baby Boomers are being painted as a reason for the lack of inventory, because so many of them are staying in their homes for longer than anticipated. For instance, this recent Yahoo Finance article literally says that the Boomers are in a “showdown” with Millennials, due to the fact that they’re choosing to renovate their homes and age in place.
But who can blame them when more than half of them don’t have a mortgage, and those who still do likely have a much lower rate than the current rates? Besides, it isn’t like there are a ton of homes on the market for them to buy.
According to the article, the Boomer generation makes up over one third of homeowners, and over half of them have no plans to move. Instead, many of them are choosing to spend anywhere from tens of thousands of dollars, to hundreds of thousands of dollars, renovating and updating their homes to make them more safe and comfortable as they grow older.
If you’re living in a home that’s paid off (or at least affordable), it’s comfortable, and you’re able to maintain it without struggling financially or depleting your savings, then by all means you have every right to continue living in your home! It’s not your responsibility to solve the current housing crisis caused by a lack of homes for sale.
However, you might want to consider selling if staying in your home is causing you financial strain…
Aging in Place Isn’t the Right Move for Every Boomer
Unfortunately, staying put in their current home might not be the best decision for every Baby Boomer. According to another recent Yahoo Finance article, many of them are “house poor,” and can barely afford what it costs to stay in their home, let alone other expenses.
When you’re in that position, any additional or unexpected expenses can easily make it difficult to pay your mortgage, taxes, utility bills, or general maintenance, let alone any home improvements to make your house more livable as you get older.
The article cited four main reasons Baby Boomers become “house poor,” including:
- Choosing not to downsize. Selling and moving to a smaller house or apartment may not be desirable if you love your home, or don’t want the stress and hassle. But buying or renting a smaller home could reduce the upkeep and costs significantly. It might even be possible to buy a smaller house outright, rather than take on a monthly mortgage at today’s mortgage rates, and avoid paying monthly rent to someone.
- Refinancing their mortgage and taking cash out. Whether it was to simply benefit from a lower mortgage rate, or to also tap into some of the equity of their home, many homeowners refinanced their mortgage in recent years. While this can be a good decision, it prolongs having a monthly mortgage payment, which can become problematic if you no longer have a steady income stream. So if you’re considering refinancing your mortgage in order to turn some equity into cash you can use for renovations or living expenses, think through whether you’ll be able to maintain those monthly payments in the coming years.
- Not using their house as an income-producing property. While the article suggests renting out a portion of your home (like a spare bedroom) can be a good solution if money is tight, this is certainly not for everyone. Is living with a tenant something you want to do in order to stay in your home? If so, and you’re comfortable with that living situation, then it could be a helpful solution. But just be careful about vetting the tenant before letting them move in; it can be very difficult to get them to move once they’re a tenant.
- Dipping into savings to keep home. The whole point of investing and saving money over the years is so you can afford to live the life you want to live when you’re no longer bringing in a regular income. So, on one level, using your savings as a means to afford the home you want to live in is absolutely fine. But if it’s draining your savings at an alarming rate, and the money you have saved will run out too quickly, it makes more sense to sell your home before you get to the point where you’ve spent all of your savings.
If any of those sound like your personal situation, you may want to consider selling your home soon. Not only would it help you avoid further financial strain, but it’s still a good time to capitalize on a strong real estate market — home values are still at all-time highs in many areas and price ranges.
So, if you’re already feeling financial strain, or are concerned that you’ll be in that position in the near future, here are some things you might want to consider doing:
- Speak with a local real estate agent and find out how much you can sell your house for in the current market.
- Make a list of alternative living arrangements. Should you buy a smaller house? Or would renting a place make more sense? Is living with family an option? Perhaps a retirement community or assisted living facility makes sense. Consider all options, and the costs so you can plan for a long term move, rather than a short term remedy.
- Involve your loved ones in the decision. Moving isn’t easy, nor is it an easy decision, so enlist the help and support of your family and friends.
The Takeaway:
Many Baby Boomers are planning on renovating their homes and aging in place, rather than sell their house and move to something smaller. Unfortunately, it’s not something everyone in that generation can afford to do, and trying to do so is making many of them “house poor.” Boomers who are feeling financial strain, or fear that it may become an issue in the future if they don’t sell their house, should consider selling their house now while the market is still favorable for sellers.
