November 9th, 2007 9:26 AM by
Some questions many soon-to-be retirees are asking right now is: When is a good time to sell my home? And, is selling my home a good way to make money for retirement? This article may give you some ideas about the wisdom of selling your home.
For many people, their home identifies them as a person. Community status is linked to a home. Sweat and hard work went into improving the home. So, even if it is financially smart to sell, people want to stay in their homes as long as possible. But, when the decision is made to sell, first find a place where you would love to live. Leaving a home is much easier if you are going to a place you love.
Next, as retirement approaches, crunch some numbers to find out if you can afford to live without selling your home. Then, it won't become a necessity to sell. Try to figure out a viable budget that will work for your life style before you retire. So, when your home does sell, you will have extra money to perhaps do something you have always wanted to do.
Homes that are worth a lot of money can be used as a retirement investment, especially if the retiree doesn't mind downsizing. Even before retirement, sell your home and move to that smaller dwelling and the profits from the sale of the house can be used for your early retirement, leaving investment accounts untouched until they are needed at a later time.
Investors will advise a retiree to diversify by putting their money into a number of different investments. If one doesn't pay off, then financial ruin will not result. That also means to not put all of your investment money into a real estate project, namely a home. Besides diversification reasons, real estate can never be moved quickly, so it is not considered a liquid asset. And real estate is not a great long-term investment. Often prices of real estate stay stagnant for long periods of time.
Many retirees will purchase a second home in the place they think they would like to live out their lives, such as the beach or the mountains. Maintaining a second home can put a huge strain on the budget and because real estate doesn't sell quickly, if the retiree decides they don't like their second location; they may not be able to sell at a profit. A better suggestion is to take vacations where you think you may want to retire, to try out the area. Then, if you decide it is a perfect place for you, sell your old home before buying a new one.
Some people try to tap into their gold mine by getting a home equity loan and using that money for other investments such as the stock market. This is a good strategy if done carefully because the stock market is not a sure thing.
If you decide that selling is your best option, many real estate investors advise to cut your price early for a quicker sell rather than leaving a property on the market for a long period of time. Selling your home while home prices are down is not necessarily a bad thing, because you can buy another home for less money, too.
Manny Couto is a Real Estate Broker-Associate in Kearny, New Jersey and will be happy to answer any questions you many have about your Real Estate. Whether selling or buying contact Manny at the Rosa Agency
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