We all want to ensure that we’ll be able to retire at an ideal time in our lives, and most of us dream of retiring sooner rather than later. Many people take the route of purchasing real estate investment properties in order to make this dream a reality, and many are successful. Regardless of whether you are up for dabbling in real estate investment, if you own your home you also have an investment that will help you retire when the time is right. Here are just three ways your "non-investment" property can help you retire sooner.
Selling and Living: Trading Your Home for Retirement
If you've been paying off your home for the last twenty plus years, you likely have a large investment on your hands, one that you may not even realize has grown substantially in value over the time you’ve been paying a mortgage. If you are someone who's been banking on your own home to fund your retirement, you are like 24% of Canadians who plan to do the same. Since real estate is an appreciating asset, you have made an investment in your home whether you intended to or not, and once it comes time to sell it, you will likely profit. Many retirees opt to sell their home in order to be able to retire, and some opt to snatch up other investment opportunities for passive monthly income.
Market Watch: Downsizing at the Right Time
Aside from just selling your home and renting something new, you can also downsize in preparation for your retirement. This is best achieved when you are watching the market, or when your real estate agent is guiding you as to the timing of your move. If you can manage to sell your detached home and downsize to a condo at the right time, you can achieve significant financial gains that will help you prepare for your retirement, perhaps creating a two-step sell over a period of time to fund this life milestone.
Preparing for Retirement: Renting for Monthly Income
If you have a large home that once housed an entire family and is now completely paid off, you likely have little use for all the space and pay low monthly expenses to maintain the home. In this case, another option that can help you retire sooner is renting out either a portion of the house, or the home in its entirety, for secure monthly income. Renting out a room or basement suite in the house can help you build your retirement fund. If you move out and rent the home in its entirety, the difference between your new housing expenses and your rental income can do the same.
Whether you choose to sell outright, downsize over a period of time, or rent your house in order to achieve your retirement goals, you should always consider your options when it comes to the investment you've made in your own home. There's no need to worry about investing in Vancouver real estate for your retirement; the reality is, you already have!