With the current economic climate what it is, it’s understandable that you’d be worried about the viability of your retirement fund. There are a lot of great ways to beef up your retirement fund through side gigs, but if you want reliable income, real estate is going to be your best bet. Here are a few of the different ways in which you can utilize real estate value to help keep you in the black throughout your retirement.
First, it is important to understand that a reverse mortgage is not income. It’s more like a loan program for retirees. Much like a second mortgage, a reverse mortgage is based on the amount of equity you’ve built up in your home. Most people use it to either offset whatever payments they’re still making on the home or to beef up a retirement fund. How you use the money is up to you.
You can repay whenever you’re able–as long as you keep living in that home. If you move, you have to start paying back the loan. If you pass away before the loan is paid off, your heirs will inherit that loan. Current reverse mortgage statistics say that when this happens, the most popular option for heirs is to allow the lender to sell the home and send them a check for however much is left over after the loan has been repaid. Either way, you don’t have to worry about it.
If you no longer need the larger home you purchased to accommodate your growing family (who has long since moved out), sell your home and use the proceeds to either buy a new home or to pay for a rental. Smaller homes are cheaper and easier to maintain. You can also earn extra money buy selling off the stuff you won’t be moving to your new place.
In addition to the monetary benefits, small homes are better at maintaining their temperatures, which is good during the months with severe weather. They also usually stay cleaner because there is less space in which a mess can build up. Finally, they give you an excuse to get out of hosting every single holiday because you simply won’t have the space to accommodate everyone!