Retiring in Arizona: Mistakes to Avoid
Have you always dreamt of retiring in Arizona? You think you know exactly what you want, whether you’ve dreamt of it all your life or you fell in love while on vacation in a remote spot with your spouse. The impacts of Covid-19 have caused the Arizona housing market to heat up and more and more people are making Arizona their destination for retirement.
No matter where and how you fell in love with your dream retirement home, don’t make a rash decision. Consider these four things before buying a retirement home. Especially here in the San Diego area, whether you’re looking to move closer to the beach or downsize into a single story home, there’s a lot to consider.
Consider the cost of buying your dream home:
Put the purchase price aside for a moment. Even if the home is affordable and you could pay cash, what are the long-term housing costs?
Think about maintenance, taxes, and insurance. Ask about the average costs in the area – talk to the owner about the typical costs of the home. Also, what about an emergency fund should something break suddenly? Do you have enough money to manage the costs (even if mortgage-free) yourself if your spouse dies? Some of the largest expenses of home ownership include replacing a roof or plumbing (if you’re in an area with particularly hard water), pool re-plastering, and heating and air conditioning units. When you’re considering buying your home check the current state of these. For example, what’s the lifespan of the existing air conditioning unit(s), how old are they currently and what will it cost to replace them?
How close are friends and family?
When you consider retiring to Arizona, don’t forget your social network. It can be hard to make friends when moving to a new area. Retirement can get lonely. It’s exciting at first, but eventually (for some it’s sooner rather than later), you get bored. You’re tired of the same old thing with your spouse and you’ve checked all the boxes on your bucket list, now what?
If you plan on traveling, how close is the airport or other transportation options? A lot of people move to Arizona from the midwest to escape the cold wether but that quick 3 hour flight back home can turn into an all day affair if your new house is an hour away from the airport.
If you aren’t buying your retirement home near friends and family, you could find yourself lonely, homesick, and carry the large burden of buyer’s remorse if you aren’t careful.
Consider your financing options:
Even if you have the cash to buy your dream retirement home outright, should you? Will you be tapping yourself out? What happens if you have an emergency and all your money is tied up in your house? Putting too big a down payment on a home so you have a lower mortgage payment may sound good but you don’t want to end up “house rich” and “cash poor”.
Instead, consider paying some cash and financing the rest. Even though carrying a mortgage in retirement isn’t ideal, tying up all your cash in an illiquid asset isn’t smart.
Retiring in Arizona: Think long term
Don’t fall into the trap of falling in love with a retirement dream home without thinking about the home’s accessibility. If you’re buying the home for the long-term, think about your future. While no one can predict how they will feel or function as they age, it’s fairly common to lose some capabilities.
Buying a home with stairs, for example, may not be ideal. Also, consider the accessibility of the home or its capabilities. Can you make it usable for a wheelchair? Are the doorways and hallways wide enough for a wheelchair? Can you make the bathroom accessible? While it’s not fun to think about, we’ll all be there someday so it’s best to prepare now.
Don’t assume you’ll be able to drive forever. Being close to services as you get older can be a huge plus. With the advent of rideshare service like Uber and Lyft getting around when you can no longer drive is easier than ever. However, if your 30 minutes outside of town those costs can add up quickly.
Don’t make any hasty decisions when retiring to Arizona:
Retiring in Arizona is exciting! But don’t let the excitement take over your decisions. Think carefully about each decision before settling on a home. Chances are this is the last home you’ll purchase, so make it one that you can live in comfortably, afford, and will enjoy throughout your golden years. Spend some time in your new area, get to know the neighborhoods and get a feel for what’s right for you. Visiting a place once or twice and then deciding to move there can be a recipe for disaster.
As always, Chris is here to help. Contact us today to get more info on financing your retirement dream home.