RETIRE LATER, BUY THE HOUSE NOW

With prices in many areas at a low ebb, baby boomers should consider buying their retirement home now, even if they’re still years away from actually moving, allowing renters to pay the bills for now। Here’s some advice for people considering this strategy:• Shop carefully. Buy a home that can be rented for a rate that, after tax considerations, covers the mortgage, real estate taxes and insurance. • Study housing trends. Ask the local or state planning department for demographic and economic data. The information can reveal facts that will influence whether or not to buy. For example, big companies going out of business or military base closings can be bad news. • Don’t forget maintenance. Property managers usually charge a percentage of the monthly rent. Family members may do the job for free but could be ill equipped to make repairs. • Consider financing. Boomers with sufficient equity in their current home can tap it to either buy their retirement home outright or secure a much lower mortgage rate compared to the loan rate usually charged to buyers of investment property.Source: The Washington Post, Belly L. Kass, Esq. (08/11/2007)© Copyright 2007 INFORMATION, INC. Bethesda, MD (301) 215-4688