Boomers buy real estate to ease financial concerns
By Joyce Nenninger and Allison SimsonQuestion: My wife and I have been very poor at putting money together for retirement. We’re now thinking of investing in real estate. Is this something that is being done in order to accumulate some funds for retirement?Answer: Many baby boomers feel financially strapped and worry about how they’ll be able to retire, so they turn to real estate as a means of accumulating wealth, a study shows. According to Baby Boomers and Real Estate: Today and Tomorrow, a study conducted for the National Association of Realtors (NAR) by Harris Interactive, boomers overwhelmingly channel their concerns over finances into real estate. Almost eight out of 10 own their home and one-quarter own one or more other kinds of real estate in addition to their primary residence. The most popular real estate investment is land (13 percent), followed by rental property (8 percent), vacation or seasonally occupied home (7 percent), and commercial real estate (2 percent).”Boomers have turned owning multiple homes into a fine art,” Peter Francese, a demographic trend analyst, told attendees at the 2006 REALTORS Midyear Legislative Meetings and Trade Expo Thursday. The survey found 96 percent of boomers think real estate is a good investment.As a group, boomers are wealthy compared with the rest of the country, earning median household income of $64,700 compared with $44,400 for the general U.S. population. But that relative wealth isn’t translating into peace of mind. Thirty-seven percent of the boomers say they’re making just enough to make ends meet and 17 percent say they’re having financial difficulties. Only 4 percent say they’re financially well off. The survey also found three out of four boomers believe they’re not financially prepared for retirement. “This survey uncovered a lot of anxiety,” said Francese. Buying Mexican property? Watch out for scamsQuestion: Allison, you recently wrote an article about buying real estate overseas. I would like to buy in Mexico. What are the problems, if any?Answer: According to an article in the Wall Street Journal, baby boomers seeking a warm climate and affordable retirement home are fueling a real estate boom in Mexico’s Yucatan peninsula. But with that boom has come higher prices and an increase in scams. In some cases, con artists try to flip property they don’t even own. “In Mexico, you can buy safely but you’ve got to do your homework,” says David Wiesley, president of FirstMexico Group LLC, San Diego, and a pioneer in the Mexican title-insurance business. Anyone contemplating buying real estate in Mexico should take a few initial steps before handing over cash in any amount. Ensure the title is clear. Ask the seller to provide a copy of the title, known informally in Spanish as an escritura, and a certificate of freedom of liens and encumbrances. Also, make sure you see the latest tax statement for the property. Hire a reputable Mexican attorney. The nearest U.S. consulate can provide a list of attorneys in good standing. Arrange for title insurance. A title insurer will protect a buyer against prior liens by tax authorities in the event that somebody else claims title. Place the property in a fideicomiso or trust. This costs about $400 per year, but that is offset by the very low property-tax burden. Rules for buying, selling in uncertain marketsQuestion: Joyce, the real estate market seems so uncertain right now. What do I need to know in order to decide whether to buy or sell these days? Answer: There’s no way to predict with accuracy whether home prices will rise or fall in over the next year. But there are some general rules you can follow to make sure that your housing decisions are smart ones. BusinessWeek magazine analyzed the behavior of buyers and sellers in the current housing market and recommends a few ways to traverse the rapids. Before buying or selling, assess what houses are really worth in the area.Don’t be foolishly loss averse. Some people who bought high and are seeking to avoid selling low gamble recklessly that the market will rebound and bail them out, but dallying often worsens the problem. The solution: Cut your asking price and make the sale.It’s human nature to think you know what you’re doing. Reality, however, is often unkind. Whether you’re a buyer or a seller, make a plan that accounts for worst-case scenarios.Sellers’ thinking tends to be six months behind the market. So when prices are rising, they set theirs too low, and when prices are falling, they set theirs too high. So assess where the market is headed, not where it was. For answers to your real estate questions, call Joyce or Allison at (970) 468-6800 or 1-800-262-8442. Email Info@SummitRealEstate.com or visit their website at http://www.SummitRealEstate.com. Allison and Joyce are both long time locals in Summit County. Summit Real Estate – The Nenninger/Simson Team is located at the Dillon Ridge Marketplace. Their long-time residency and years of real estate experience can help you make the most of any buying or selling situation. Both are Certified Residential Specialists (CRS), the highest designation awarded to a Realtor in the residential sales field. Their philosophy is simple, whether buying or selling, they understand that the most important real estate transaction is yours.
Support Local Journalism
Support Local Journalism
As a Summit Daily News reader, you make our work possible.
Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.
Your donation will be used exclusively to support quality, local journalism.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User