Anybody upsizing their house in retirement without a mortgage?

[travelover]

How about a duplex? I'd bet that you know someone that would rent the other half.

 

[Midpack]

I don't necessarily want a bigger house as far as square footage, although I would really like to have a garage, better location, and certain other features that add value and sometimes more square footage comes along with these upgrades and features. By "upsize" I meant in terms of selling price.

I am not ready to pull the trigger because we haven't really decided where we will be living, but when we do I want to be favorably positioned.

You're not alone of course. Our next house will be a little smaller (2300>1800 - fewer but larger rooms) but we're also after "upgrades and features" just like you. And we plan to go from a two story to one and maybe a smaller lot. We plan to downsize, but it'll probably cost us at least 50% more than our current home value.

And I've been actively preparing to buy a new house for several years, even though it'll probably be years before we act on all our home-buying "knowledge."

 

[audreyh1]

I guess we "up sized"in the sense that the house we had built was more expensive than a house we had sold 5 years earlier. We paid cash - although a big chunk was investments from the house that we had sold earlier.

The house was actually smaller in terms of inside living quarters, but had nicer interior features and outside spaces like courtyard. And a giant covered "RV port" with storage. 1800 to 1100, but more $$$.

For use it was 1) a location where we really wanted to be and 2) the house fit our retired lifestyle much, much better.

I'd say - go for it! Little things like having a garage really matter.

We sold some investments we hold outside of our retirement fund to cover the difference. So we paid 15% on the gains, but that doesn't bother us. We are gradually selling down those investments anyway, and lucky for us they were hitting new highs that spring.

 

[Accidental Retiree]

Yes, we are looking to upsize and relocate. We currently live in a single-story 1440 SF house with a two-car garage. Our laundry area is also in the garage, which DH does not like. We have been here for 30+ years, and the weather is great. We have everything we could want here, except a little slower pace and more space.

DH would like a 3-car garage house w/5 bedrooms: master, guest, office 1, office 2, and treadmill/weight room. I think about 2800 ft. ought to do it.

AND a separate laundry room.

All that for 2 people. It's actually kind of embarrassing, but we still look.
I think sometimes it is because we are home so much. We really are homebodies, so it would be nice to have more space around us when we want or need it.

We are out in our back yard a lot, so we'd also like more space around us out there and also have a place where we are not constantly disturbed by all the people who cannot read or choose to ignore the 2 "No Soliciting" signs we have posted.

For myself, I mostly want a pool and decent proximity to the coast.

Currently we are looking in Riverside/North San Diego Co., where we lived 30 years ago, as our Prop 13 tax base will also transfer to those counties. (Property taxes will still about double, if we move, due to all the special assessments that have been added to meet local needs.)

 

[imoldernu]

We're pretty happy with our floor plan, similar to this. About 1600 s.f. plus garage. Vaulted ceilings which make it seem bigger.
Have lived here for 10years now, and very happy with the size, layout, price and taxes... All homes in our CCRC are similar design, brick front vinyl siding. There are also duplexes, each side of which is larger than our home... about 1800sf.
Current Pricing in the $180K area, taxes $2400.
When we bought, we were coming from living in a mfg. home under $30K...
The reason we bought, and paid cash, was to establish this as our permanent home... so that if either one of us were to have to go into a nursing home, and deplete our savings... the other person would have an asset that could be kept and used later. Medicaid allows keeping the home in the event they (the government) have to pay nursing home costs, when savings are depleted... That would mean some kind of a cushion for the surviving spouse. Note the 5 year lookback period.
That's the main reason why we bought, instead of renting.
We don't have the assets that would allow us to self insure against a 5 year nursing home bill of $400 to $500K.
Would recommend consulting an eldercare lawyer for current law.
My parents were involved in this kind of situation many years ago... Stepfather continued living in home, while mother was 5 years in nursing home... Government paid, when his nest egg was gone. After they both passed away, my stepsister inherited the home... Barrington RI.. Current Zillow estimate $800K. Stepfather had wanted to sell the home to pay for mom's nursing home costs... (old time Yankee ethics) The $200 eldercare lawyer's fee paid off in this case.
Not sure about any limits, so can't say if a million dollar home would protect the full amount, and I believe there may be some recourse laws that cover this. We've had some discussion, here, on the subject, but think that legal advice might be best.

 

[Cassie]

We're pretty happy with our floor plan, similar to this. About 1600 s.f. plus garage. Vaulted ceilings which make it seem bigger.
Have lived here for 10years now, and very happy with the size, layout, price and taxes... All homes in our CCRC are similar design, brick front vinyl siding. There are also duplexes, each side of which is larger than our home... about 1800sf.
Current Pricing in the $180K area, taxes $2400.

Very nice floor plan, especially like the walk-in pantry. Where are homes like this for the price & taxes mentioned? Thanks imoldemu, your post are informative.

@W2R, good luck with your search, I find the responses helpful to me as I attempt to get my house ready to sell.

 

[Mulligan]

Your house sounds nice. In my case, I want the big garage and big shower, but around here few small houses have both.

Garage.... That was the biggest reason I wanted to buy a house! I want the big shower too. But it will have to be a renovate. Throw out the 10 year old jet tub that maybe has been used 3 times since the house was built. I'm still kicking myself for that, but big shower, no tubs weren't quit the rage then, or I was just too dumb not to think out it then.


Sent from my iPad using Tapatalk

 

[jerome len]

Overall I wouldn't worry about it. Wait until you're ready and buy the house you like, regardless of the choice or cost. Pulling cash now might cost you (or save you) in asset gains or losses....who knows, I don't for sure. If you're worried about taxes, put part of your bond allocation in shorter term muni bonds and if you're buying near a year end, split the gains into two tax years. But.......until you're closer I'm not sure I would do anything. Good luck, we recently downsized from 4000 sq ft to 2200. Interestingly, we still have the same amount of usable space; just smaller hallways, more functionable master bedroom and bath....etc. So, we're going to be far happier since our taxes, utilities and lawn care expenses will be far less. Did I think we would do this? Nope, but you never, never know what you'll find until you start looking.

 

[W2R]

W2R,

Have you thought about doing some renovations/addition vs moving? Although this may depend on what you have to work with and while it won't change your location, you might find that this is the cheaper path to getting the value improvements you desire, while possibly retaining the insurance and tax benefits you currently enjoy. May be you should catch a few episodes of "Love it or Leave it" on HGTV.

I have thought and thought about that. My lot is only 50x100, though, and there just isn't room for an addition, plus the way things are laid out inside means there really is no way to remodel the bathrooms in a satisfactory way without extending the exterior walls too close to the property line for a permit.

I wish I could get the "Love it or Leave it" folks to come over and do MY house. I think they would both go insane. Plus, I would probably leave it anyway because I think my neighborhood is deteriorating. Maybe the burglary of my house last month influenced me in my thoughts about that.

 

[W2R]

How about a duplex? I'd bet that you know someone that would rent the other half.

We are seriously thinking about that. I'd *love* to have him next door, or on the other side of a duplex. But before I or we start looking, I need to free up some cash and we need to decide exactly what we will be looking for.

You're not alone of course. Our next house will be a little smaller (2300>1800 - fewer but larger rooms) but we're also after "upgrades and features" just like you. And we plan to go from a two story to one and maybe a smaller lot. We plan to downsize, but it'll probably cost us at least 50% more than our current home value.

A one story house (which I now have) is great to have as we grow older. I also would like a house that has been modified, or can be modified, to be "elderly friendly" so that I can stay in it for the duration.

If I was single again, I would like a house that has:

1): a 3 car garage with a hydraulic lift, 220V power, built in lighting, lots of cabinets, a porcelain tile floor, and storage for my power tools,

2); one bedroom with a large shower (no tub),

3); a combination kitchen/living area with high speed internet access and room for a desk and 60" TV,

4); a yard with no grass,

5); is 15 miles from the nearest highway, and

6); has no neighbors within 1/8 mile.

However, NOT being single, I am subject to the wants and needs of DW who got us into a newer home in November that roughly the same size as our previous one and is one level (instead of two floors) and in a 55 and over community . My garage is not adequate and the yard has to much grass.

Love your list! Well, except for the hydraulic lift which I don't need. I, too, would love a zero-care yard if such a thing exists. I spend no time in my yard but still have to pay to have it mowed.

Imoldernu, I love your floorplan! It would be perfect for me if it was modified to have a big shower, at least 4'x6'.

Jerome Len, the point you bring up about leaving my investments to grow for now is very crucial. In a way, making the decision to sell is almost similar to market timing because I am assuming that my investments won't grow more than the possibly huge tax hit that I might incur if withdrawing so much from my portfolio all at once. You're right about floor plan making a huge difference in the square footage needed.

Audrey, my portfolio is hitting new highs almost every day right now (current all time high: last Thursday! ) so I am hoping to do the same as you did, selling high. But then I suppose that is the DMT in me. Speaking of acronyms I had to pay AMT one year (only) and hope to never have to do that again. I should check out TurboTax again concerning the possible sale of part of my portfolio to fund the new house, again, but looking at whether that triggers AMT this time for some reason.

Cassie, I agree, the responses on this thread have been fabulous! I have read each one carefully although I can't respond to all of them so I hope the people I didn't respond to understand.

 

[FIREd]

We will probably upsize when DW retires. We downsized 2 years ago to a 2-bedroom condo. Currently, the second bedroom is used as a guest bedroom with a small office tucked in a corner. We really have no personal space of any kind, nowhere to retreat from each other, nowhere to store or display our personal possessions. It works fine for the time being because DW goes to work every day and I have the whole place to myself. Once DW retires, however, I think that we will need a minimum of 3 bedrooms - one master, one "office" for her, and one "office" for me (the guest bedroom is used so rarely that I would not mind seeing it gone).

 

[Helen]

We bought a more expensive house in January of 2011, which was about 1.5 years before I retired. I had inherited a portfolio that was heavily weighted in one company and I needed to diversify whether I bought a new house or not. I had capital losses to offset the capital gains. We sold some of the stock in December and some in January, though with the capital losses it didn't make a difference.

We decided to buy the new house before selling the old one, so we sold enough stock to buy the house out right. This worked out well because we ended up with cash from the sale of the old house and dumped it into Vanguard's Wellesley fund to use as part of our early retirement money.

This is one of the better decisions we have made. Our old house was 40 miles outside of the city. It was a 2 bedroom 1950s ranch on a beautiful 3 acre setting. We lived there for 20 years.

We moved into a nice area of Portland and it has had a very positive impact on the quality of our lives. We can easily get together with friends and have made new friends since moving. We are a half hour walk to the train and we have a bus stop 4 blocks from our house. The bus stops every 20 minutes and will take us to the train. This was great when I broke my ankle and couldn't drive or walk far.

We have also joined a gym and go there a lot. Instead of driving to work (1 hour drive in rush hour) I walked to work and it took about the same amount of time. Six months after moving I had lost 30 pounds.

The old location didn't have much in the way of hiking trails and we would have to drive through Portland to head to the trails (an extra 45 minutes each way). The new location is a 1/2 hour drive to the Columbia River Gorge which has a lot of trails. It's also a 1.5 hour drive to Mt. Hood and 2 hours to the coast.

We are in a district that gives us access to Portland's fantastic library system. And, there is a Trader Joe's and Whole Foods within walking distance.

Our property taxes have doubled, but I feel like we get a lot for the money. I hope I continue to feel that way 10 years from now.

The new house is great for entertaining. It has a large living room, a dining room and a study. It's an English tudor that was built in 1929 and was in good shape when we bought it. It was lucky timing as we ended up buying at the bottom of the housing crises. The new house has gone up a lot more in value than the old house.

W2R, if you can afford to do this then go for it. I could have diversified my portfolio by selling stock and buying mutual funds (and I have), but it doesn't do much for the quality of my life. Where you live can have a huge impact on the quality of your life and change can be stimulating.

I hope to read about your decision as time marches on. Best of luck to you!

 

[Hermit]

If I was single again, I would like a house that has:

1): a 3 car garage with a hydraulic lift, 220V power, built in lighting, lots of cabinets, a porcelain tile floor, and storage for my power tools,

2); one bedroom with a large shower (no tub),

3); a combination kitchen/living area with high speed internet access and room for a desk and 60" TV,

4); a yard with no grass,

5); is 15 miles from the nearest highway, and

6); has no neighbors within 1/8 mile.

However, NOT being single, I am subject to the wants and needs of DW who got us into a newer home in November that roughly the same size as our previous one and is one level (instead of two floors) and in a 55 and over community . My garage is not adequate and the yard has to much grass.

That pretty much describes the place I am building this summer. I had to acquiesce on the shower. My DD wanted a tub/shower and she will get the place when it is time for me to move down from the mountains.

 

[W2R]

We will probably upsize when DW retires. We downsized 2 years ago to a 2-bedroom condo. Currently, the second bedroom is used as a guest bedroom with a small office tucked in a corner. We really have no personal space of any kind, nowhere to retreat from each other, nowhere to store or display our personal possessions. It works fine for the time being because DW goes to work every day and I have the whole place to myself. Once DW retires, however, I think that we will need a minimum of 3 bedrooms - one master, one "office" for her, and one "office" for me (the guest bedroom is used so rarely that I would not mind seeing it gone).

If we ever decide to live together, which could happen this time, but probably not, I am hoping we could find a place with either a "mother-in-law suite" or at least with two living areas in two distinct parts of the house. We both value our time alone so much that we would have to safeguard that somehow.

W2R, if you can afford to do this then go for it. I could have diversified my portfolio by selling stock and buying mutual funds (and I have), but it doesn't do much for the quality of my life. Where you live can have a huge impact on the quality of your life and change can be stimulating.

I hope to read about your decision as time marches on. Best of luck to you!

Helen, I loved reading about your new house and it sounds wonderful! I like the idea of selling enough to entirely buy the house in cash even before selling my present home, and I think that could be a great advantage in negotiations for the new home. Besides, as you mentioned, the money from the sale of my present home could be either invested (as you did), or I could use it for the move and for any needed renovations. I do have so many requirements of a home that I will probably need to do renovations even with the perfect home. I want it to be extremely elderly friendly, for example, with a huge roll-in shower and other handicap features in case I need them later on. And also, I would like my house to have beautiful upgraded finishes and so on.

 

[imoldernu]

Imoldernu, I love your floorplan! It would be perfect for me if it was modified to have a big shower, at least 4'x6'.

Yeah... that was not quite my house... no middle bedroom, so the master BR has double sized bath with big shower, and much bigger master BR, and a very large walkin closet.

Very discerning of you to apply the architectural knowledge.

 

[W2R]

Yeah... that was not quite my house... no middle bedroom, so the master BR has double sized bath with big shower, and much bigger master BR, and a very large walkin closet.

Very discerning of you to apply the architectural knowledge.

Now THAT would be perfect for me! But then, they say that houses have to have at least 3 bedrooms and 2 baths for resale. I am so picky. My present home has 3 bedrooms, but the middle one is only 9'x9' (very tiny). It's not much good for anything but an office, but hopefully will help for resale.

 

[brett]

We did the opposite. Downsized from a large home to a rental condo. We plan to buy. It was a good decision for us. We put the proceeds into the market and they far exceeded the growth of house prices in our area. Dumb luck.

I think it depends on your lifestyle or retirement plans. We live in the snow belt and plan to travel for 10-12 weeks during the winter. We will be travelling for 6-10 weeks during the late summer/fall. We like the ability to lock to door and go. After owning our own home for 35 years it is a nice change not to have that responsibility.

 

[Helen]

I like the idea of selling enough to entirely buy the house in cash even before selling my present home, and I think that could be a great advantage in negotiations for the new home.

You raised a good point. Having the cash upfront made the seller more willing to negotiate. He had had two offers fall through prior to us making an offer. When told them it would be a cash deal.

Also, by selling after we bought, we could take our time moving in. We had all of the hardwood floors refinished and had a versalift installed in the garage. Versa Lift - Attic Storage Lifting System

Being able to move at our own pace took a lot of stress off us. I can not imagine trying to time the selling of a house with the purchase of a house.

 

[W2R]

We did the opposite. Downsized from a large home to a rental condo. We plan to buy. It was a good decision for us. We put the proceeds into the market and they far exceeded the growth of house prices in our area. Dumb luck.

I think it depends on your lifestyle or retirement plans. We live in the snow belt and plan to travel for 10-12 weeks during the winter. We will be travelling for 6-10 weeks during the late summer/fall. We like the ability to lock to door and go. After owning our own home for 35 years it is a nice change not to have that responsibility.

That is another possibility I am considering, though. I'd love to have the "lock and leave" capability, and even more I'd love not having to maintain a yard that I never ever use. By renting the condo, you do have to deal with a landlord and possible increases in rent periodically, although not with an HOA.

Overall, home ownership has a big emotional draw for me, though. Like some other women, I just feel a need for my own living space that I can stay in forever and that is mine. It's probably remnants of some sort of nesting instinct. So, I'd have to work on the emotional aspect of going back to renting.

You raised a good point. Having the cash upfront made the seller more willing to negotiate. He had had two offers fall through prior to us making an offer. When told them it would be a cash deal.

Also, by selling after we bought, we could take our time moving in. We had all of the hardwood floors refinished and had a versalift installed in the garage. Versa Lift - Attic Storage Lifting System

Being able to move at our own pace took a lot of stress off us. I can not imagine trying to time the selling of a house with the purchase of a house.

I know myself well enough at this point to be pretty sure that I will want to do renovations before moving in, like you did. If my present home sells fast, I can always rent while I am finding the new home (which could take a year or more, because I am so picky), and while the renovations are being done. Or, if it takes longer to sell I could handle it the way you did.

I love the idea of being able to move at my own pace! Sounds delightful. Also that would take much of the stress off the closing process because a delay of a day or two wouldn't mean having to move twice.

 

[LoneAspen]

Even though I'm single, never married and no kids, I rent a 3000 sq ft house in a subdivision, and I like having the extra space.

The lot isn't that big (typical Silicon Valley housing subdivision), but I feel all the extra space in the house gives me enough room for my hobbies. It's technically a 4 BR + office, and I use the Master to sleep in, the office as an office, and converted one of the 12 x 12 bedrooms into a "real" home theater (112" screen, front projector, painted ceiling black, acoustic treatment on walls...the works). The other two bedrooms I use to store all my camping gear, and other hobby-related things.

As crazy as it sounds, 3000 sq ft works out well for me.

Shared walls like an apartment, condo, or townhouse weren't an option for me. I HATE living next to, above, or under, other people because I can't deal with their noise. TVs, stereos, kids, musical instruments, barking dogs, etc...I can't deal with it. So SFH was the only choice for me.

When I eventually leave the Valley and move back to Colorado, I'm looking for probably another 3000 sq ft home up in the mountains on at least a couple acres. Thinking Evergreen or Genesee area, west of Denver. I love that area, and there are some nice homes there.

I'd like to think someday I could reduce my footprint, but I doubt I'd be happy. One of the houses I've owned in the past was a small 1500 sq ft and I didn't like it - the bedrooms were too small, and there wasn't enough useful space in it for me. I felt cramped.

About 3000 sq ft works well for me. Any more $$$ put into the home, I'd probably dump it into more acreage than space inside.

 

[aja8888]

..........and had a versalift installed in the garage. Versa Lift - Attic Storage Lifting System

Love that Versalift!

 

[Helen]

Love that Versalift!

It really helped us to be able to use the attic as storage space. The stairs to the attic are a drop down ladder so there are no railings and it is a fairly steep pitch. We would have had to use the finished basement for storage. So, we gained a lot of living space by buying the versa lift.

It took a bit of googling to find it. I knew what I wanted but I didn't know if anyone made one or what it was called. I think the guy we hired to install it bought one for himself.

 

[spncity]

We're pretty happy with our floor plan

We had a walk-in pantry once in a house we rented for a year. Great invention.

Kindest regards.

 

[Options]

I could sell for a big profit.

However, I don't think it would necessarily buy a bigger home because of how much prices have gone up.

Plus, my property tax assessment would be much bigger, so I'd probably have to pay several times what I'm paying now.

Moving away from the Bay Area or out of California would allow me to get a bigger home and probably have money left over.

Once FIRE'd, there is really little to keep me in the area, though the weather and amenities are nice. I'd imagine a bigger home in say Arizona would be cheaper, have lower taxes but probably bigger electrical costs for the AC.

+1 on all counts mostly. Huge equity from selling this place in LA will allow me to actually buy something larger for much, much less and with lower prop taxes in a lower cost area. I grew up in the Bay Area and like SoCal now, I despise it. Once I leave here in a couple years, I won't return (just like I've never returned to the BA other than painful trips to visit family up there who don't have the sense to leave).

 

[Amethyst]

If your landlord has to deal with the HOA, his/her tenants will, by extension. Example: We had tenants who made alterations to the property (window a/c, security bars in windows) without asking us or checking with the HOA. We actually would not have minded these changes. However, the HOA went after us to make the tenants take down the alterations.

Amethyst

. By renting the condo, you do have to deal with a landlord and possible increases in rent periodically, although not with an HOA.


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