There are numerous lifestyle benefits to downsizing from a large, free standing, full title suburban property to a smaller home such as a sectional title unit in a secure complex or a retirement estate.
“Aside from the fact that a smaller property will enable you to lock-up-and-go any time of the year for any given period of time because you are no longer responsible for the upkeep and maintenance of a home with a large garden, pool and other features, you can look forward to significant monthly cost savings on rates and taxes, utility bills, insurance and security as well as maintenance and repair costs,” says Adrian Goslett, CEO of RE/MAX of Southern Africa.
However, downsizing a property for retirement is not simply a matter of selling a large property and buying a smaller one. “Your real estate investment strategy should form part of a comprehensive and well-considered retirement plan, in which the bond repayment and/or settlement, tax and financial implications of the various possible options are considered at all times,” says Goslett.
He advises prospective retirees to consider the following:
The number of years you intend to live in the existing property before downsizing to a smaller home
The lifestyle you would like to maintain once retired, as this will determine the type of property you should invest in
Are you going to sell or rent out the existing property?
“If you intend to rent out the property you currently live in, consider how you are going to go about securing and placing tenants. That said, a reputable rental agent that can screen, place and collect monthly rentals for example, may be well worth considering for retirees who intend to travel a lot,” says Goslett.Goslett advises sellers who have decided to start marketing their property, to first and foremost obtain relevant information about the market value of the property to gain insight into the current market situation as to ensure that a realistic asking price is set. When selecting a retirement property, Goslett advises retirees to take aspects such as security, maintenance and easy access to amenities such as shopping centres and social entertainment and medical facilities, among others, into consideration.