If you haven't saved as much as you wish you had, but you own your home, you have options when it comes to your retirement income. Consider these 5 ways to turn your home into a retirement income stream. Talk with a financial advisor and tax professional to get personalized advice before making any financial moves.
1. Downsize your Home and Invest the Proceeds.Once you stop working, sell your home, buy something smaller and less expensive, then take your gains from the sale and invest them to provide an income stream.
A smaller place can be less expensive to maintain, too. Property taxes may be lower on a less expensive home, since they are usually based on a percentage of the value of the property. Heating or cooling a smaller space can be cheaper, too.
Alternatively, you could rent! The downside of renting is having to write a check to your landlord every month. The upside is you invest the entire proceeds of your home sale to work for you.
2. Sell your house and move to an inexpensive place.
Whether you buy a smaller place or rent, your money can go further in less expensive areas. Check out a cost-of-living calculator to determine how a move would benefit you. For example, if you live in Los Angeles and currently make $100,000 per year, you’d only need $64,000 per year in Lincoln, Nebraska to afford the same lifestyle. Of course, you’d have to buy a few sweaters and some snow tires, but it may be worth it so you can retire.
3. Sell your house and move in with your kids.
Whether you live in a completed basement, mother-in-law quarters, or in the extra bedroom, living together as one big family can work. Young parents appreciate a second set of hands with the kids. Grandparents can be handy for picking up the kids at soccer or dance class. If you love to cook, you can promote regular family dinners that are often missing in today's busy world.
There may be other emotional benefits, such as bringing your family closer together, but it certainly works financially.
4. Rent out space.
If you love where you live and don’t want to downsize, stay in your house and rent out a room or your basement. You could rent to a graduate student or medical resident who is quiet and focused on their studies. Rent to a retiree who sold their home and now wants to rent!
Use technology to expand your reach. AirBnb and VRBO are great for short-term rentals. If you’re looking for a more long-term situation, try something like SilverNest, a site for seniors looking to share space.
5. Sell your home for cash.
Most people are surprised when they find out just how easy it is to get a fast, cash offer for their house. LaPlace Transforms, LLC, is a reputable home buying company in Eastern Pennsylvania that offers cash for homes in a simple, quick process. This allows for sellers to move onto the next chapter of their life without the stress of having to find extra money to fund the things they want and need. Their process is simple and transparent – you call to make an appointment, a Home Sale Specialist comes out to look at your house and makes you a cash offer in 30 minutes. No obligation and no strings attached. Selling your home for cash is a great alternative to a traditional home sale, saving you time and thousands of dollars in fees,commissions and repairs.
There are cons to any money move. Selling your home with a realtor and buying another involves spending thousands of dollars in realtor fees, commissions, transaction costs and needed repairs along with waiting months for the process to come to a close. Renting out a room to a student, a senior, or on AirBnb can be a hassle. Moving in with your children can sometimes feel cramped and inconvenient.
Contrary to the cons listed above, accepting a cash offer is a simple, quick and transparent way to turn your home into a retirement income stream for you. For more information contact, LaPlace Transforms, LLC today!
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