Ah, the retirement lifestyle – worry-free, toes in the sand, and visits with the grandkids. It sounds too good to be true, and for some, it is. But if you’re prepared to borrow and spend money and sacrifice some privacy, your home can be a source of retirement income. Not just your castle.
When the real estate market experiences a significant boom, like Canada’s housing market has in recent years, your home becomes a money-maker. And even (and maybe especially) house-poor homeowners can take advantage.
Anyone who has ever watched HGTV Canada’s Income Property knows the premise: You invest in a property, renovate all or part of it, and become a landlord. You’ll lower your mortgage costs and be able to save for retirement – or to invest in another income property.
If you own a high-maintenance home in a good neighbourhood and want to downsize, take advantage of low inventory levels in centres such as Toronto and Vancouver, and benefit from the appreciation in your home over the past few years. Particularly for owners of scarce detached or semi-detached properties in urban areas, your home may be worth more than you’d imagine.
The equity in your home can also provide a back-up plan if your savings account runs low. You may be able to borrow against the equity you’ve built up with a reverse mortgage or home equity line of credit.
These also provide a way to finance a grandchild’s education, renovate your home, or enjoy that retirement lifestyle…and fulfill those dreams.