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Finding the Right Housing Solutions as a Senior: What You Need to Know

Buy a home in Minnesota means something different to everyone. It can be the house we’ve lived our whole lives or where we are surrounded by friends and loved ones. If you’re considering what to do now that you’re a senior, here are some different ways you can age in the community of your choice.

Village-to-Village Living

If you are looking for something different, you could consider village-to-village living. There are various types of village living available. One form of such living allows you to age in place with the benefit of community help. You join the village, and in return, you have a group of people to rely on. You may have specific services provided, like transportation and lawn services, for a yearly fee. With this sort of community, you have the benefit of remaining in the home you’ve built while receiving the help you need. Then there are the retirement villages, or specific housing dedicated to retirees. The homes are easier to maintain, and you have a group of people in similar situations to support each other nearby. There are social engagements available, so you don’t need to worry about not having something planned for your weekends. Often, medical care is readily provided and close at hand should it be necessary.

Consider Shared Living

One growing form of housing among seniors is shared living spaces. There are many benefits to sharing a living space; for example, not only will you have companionship and extra security, but you will save financially by having someone else move in, or by moving into a shared home. According to HomeAdvisor, “As a matter of fact, a growing number of baby boomers are turning to shared living as an aging-in-place housing option. A 2014 AARP analysis of census data found approximately 132,000 households and 490,000 women over the age of 50 living with non-romantic peers.” This may allow you to age in place while simultaneously providing the security of communal living. There are websites (such as those listed by Senior Advisor) you can use to find reputable roommates, whether they’re fellow seniors or even young people, like students, looking for affordable accommodation.

Subsidize Your Home

If you are looking for a more manageable solution, you can apply for government assistance in several ways. Section 8 Housing is a form of low-income housing that offers everything from apartments to single-family homes. As a senior, you will be given priority if you qualify. You can even search your area for low-income housing if you are interested in seeing what properties would be available to you locally. This way, you could stay close to family and friends while having some of the financial burden alleviated through government assistance. Your local housing agency can give you more information about what you need to qualify in your area.

Age in Place

Whether you join a village, bring in a roommate, or simply choose to live alone in your home, there are ways you can modify your property to make it more practical as you age. To make doors easier to use, you might have swing away hinges installed. These can help to widen a door without paying to remodel of your home. Grab bars will be invaluable in bathrooms, both by toilets and in showers or tubs. If your threshold has a slight step to it, you may want to level it to prevent trips and make it easier for wheelchair users to enter the home.

There are plenty of options available to baby boomers as retirement draws closer. There are more traditional choices and unique takes on communal living that more and more are trying. After all, one of the greatest things in life is the company we keep, and knowing that you will always have someone there to listen, to chat, and to help when needed.



Why Buying A Home Makes Sense

Buying a home can feel overwhelming and stressful. After all, it’s a much larger investment than purchasing a new flat screen TV or an automobile. It is absolutely normal to have reservations and second thoughts when buying a home, especially if you are a first-time homebuyer. It can get even more overwhelming if you have friends and family offering you piece of advice left and right. Buying a home is a huge step in your life and a pretty serious commitment. The more you understand about the benefits of being a homeowner, the less you’ll have to feel intimidated about it. It is important you have a trusted real estate agent to help you buy a home. An experienced Realtor will guide you through home buying process and will offer a sound piece of advice.

Pride Of Homeownership When Buying A Home

One of the biggest reasons people want to buy a home is the feeling of accomplishment and pride that homeownership can bring. Buying a home means that you can decorate it how you’ve always wanted and bring all of your interior design ideas to life. You can literary do anything as long as local building codes permit…choose your own colors, build additions, and remodel a home entirely at your discretion. In your own home, you can enjoy things that you can’t when you rent an apartment. Owning a home also offers a feeling of permanence, stability, and the sense that you’re investing in your family’s future.

Build Long-Term Wealth

When buying a home, you will find yourself reading a lot more about real estate market than you normally would. The Office of Federal Housing Finance Agency monitors home values. Using its House Price Index, it keeps track of the changes not only on a national level but also by state and metro areas. Everyone knows that the housing market can be a roller coaster ride, especially looking at what we’ve experienced in the past 10 years. It is easy to get side tracked by all the media attention that house market gets but it is important to keep in mind that real estate is cyclical and even if market is down now, it will eventually go up again. Take a look at US House Price Index Report prepared by FHFA.

A lot of the home owners lost up to 40% of equity in some areas of the country when we went through the recent housing market crash in 2008 but in 2012 values started to slowly rise and by 2014 values have bounced to almost the same levels as prior to market crash. Homeowners that panicked and decided to sell their homes when market was down, lost their equity and took a financial hit. But homeowners that waited and ignored temporary market conditions gained their equity back. If you look at real estate prices history over a long period of time, the data suggests that real estate has maintained an upward climb. And with the prospect of inflation, people who buy a home have less of a chance of being affected as much as those that rent. Take a look at this graph showing price index change between 1991 and 2014

Enjoy Tax Benefits

Tax Deductible Interest

Buying a home might mean more tax benefits for you. Interest portion of your mortgage payments is tax deductible. You will get a Form 1098 IRS from your lender at the end of the year with a total amount of interest that you paid throughout the year. Just like any other loan payment, your mortgage payment consists of interest and principal. At the beginning of your loan interest portion is significantly higher than principal, especially if you took out a 30 year loan with minimal down payment so getting some of that money back can be a great relief when tax season comes around.

Tax Deductible Property Taxes

Also, your property taxes paid are also tax deductible which increase your tax return even more. You can look at Publication 530 from the Internal Revenue Service to check out more valuable information for first-time homebuyers.

Avoid Paying Capital Gains Tax

For those people who’ve lived in their homes for three of the previous five years, they can be exempted from up to $250,000 for an individual (or $500,000 for married couples) of profitable income from capital gains (check with IRS as numbers might have changed). No age restrictions apply, nor are there any guidelines stating that you have to be over a certain age. Also, buying a replacement home is not necessary. These exclusions are available to individuals (or couples) every three years. That means that you could sell a home every three years and enjoy capital gains (which can be subject to certain limitations) without having to pay taxes on it. Buy a home again, improve it and sell in a few years if you gained additional equity. There are tons of people doing it and you could be one of them.

Build Equity

As we discussed earlier, when buying a home you make your mortgage payment each month, part of that amount is put towards the principal balance of your loan. This reduces your loan obligation and builds equity. When your payments are amortized, part of those payments are increased each month so that the earliest payments are smallest and then the later payments are larger, increasing bit by bit each month (Check out amortization schedule calculator to see se how it works).

Buying A Home Might Give You More Borrowing Power

Although borrowing against your home is probably not the best idea and should be the last resort but it is a great borrowing tool in case you have an emergency and need cash or maybe need starting capital for a business that you always wanted to open. Equity loans carry deductible interest, which can be a major benefit compared to credit cards, which can often carry 17% to 23% interest rates. Home equity loans have significantly lower interest rates and much better terms. And again, that interest is tax deductible. Some homeowners choose to use their home equity to borrow money for a wide range of things, including (but not limited to) paying off credit card debt, making improvements to their house, or funding additional education. That type of loan you wouldn’t be able to get without owning a home. This is just another great reason why buying a home makes sense!

Buy a Home To Generate Cash Flow

Of course, not everyone wants to be a landlord but after buying a home wouldn’t you think that you would be a subject expert when it comes to home maintenance? You will learn all there is to it about home ownership so why not keep buying property for rental purposes to build more wealth? You don’t have to be an active landlord and don’t have to be a property manager. There are tons of property managers out there that will gladly take over your landlord duties for a very a small and affordable fee. Think about it!

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