Betty, a vivacious 83 year old client, was born in Canada to European parents. She grew up loving culture, the arts and classical music. Divorced, with grown children who had long left the nest, Betty no longer needed the beautiful large home where her children and grandchildren had left their footprints – both in the hallways and in her heart. Betty was ready to enjoy the next phase of her life which meant making a decision to downsize into a more manageable space.
Betty’s home was in a Toronto neighbourhood that required her to drive to all of her destinations and she wanted a lifestyle where she could walk to all of her favourite places like music venues and art galleries. When Betty contacted me to sell her home she shared her dreams for the next chapter of her life. We discussed the popular and common option of downsizing into a condo but I also wanted her to know she had another option which could save her money in the long run.
Senior Downsizing: Buying VS Renting in Toronto
Like so many others Betty was house rich and cash poor because all of her wealth was tied up in her home while she lived on a very modest income. I proposed the idea of renting an apartment instead of buying a new home. I could have made more money by finding Betty a smaller home to buy but my passion for helping seniors relocate to live the best life for their situation far outweighs any monetary gain. For me, the most successful transaction is the one where the client is walking away with the most money in their pocket that allows them to live comfortably. For Betty, renting was a serious consideration.
Betty gave me the go ahead to bring her home to market. My crew of professionals got to work to get her place ready to sell. We painted where needed, removed heavy and old furniture, spruced up areas, replaced some light fixtures and refinished all of her lovely but worn hardwood. The place shone when it came to market and we obtained a price of $1.4 Million.
Being prudent, Betty thought long and hard about her upcoming move and in the end she decided to rent. She turned her funds over to a respected financial advisor and now receives 5 to 6% per annum plus her pension. She has no money tied up in her new premises, she has no commitment to staying if she chooses to move (but she loves her new place) and she loves that she has no maintenance or maintenance fees. Her expenses are fixed, and while her rent may increase over the years it will be at modest and affordable levels.
Seniors Downsizing in Toronto
The bottom line of this story, do not listen to the crowd who always urges seniors who are downsizing to sell a house to move to a condominium. That is not for everyone. In the past few years I have seen more and more of my senior clients moving into rental suites, banking their money and having the security of a decent income and use of the funds which had been tied up in their previous residence.
One strong piece of advice for a senior – never rent a condominium. There is no tenure security as the unit can be sold in the future and you will have to move again. Always rent in a full rental building.