Many retirees are house rich but cash poor
The Wave of the Future
With the Internet, many professionals find themselves working from home. A mortgage underwriter I knew for example, worked out of his cottage.
This new trend is a windfall for both the employer and the employee. For the employee, getting ready and traveling to and from work can easily chew up over 3 hours of productive time and is not cost effective. With video conferencing, companies can conduct productive meetings from the comforts of the living rooms. The employer no longer needs major office space and thus can avoid all overhead expenses that comes with it.
With the extra savings, companies can pay their employees well and make a handsome profit. Working from home provides many benefits, such as living where one chooses to.
With Toronto’s high home prices, the small towns provide the perfect solution for affordability and a quiet life style. Drive just 90 minutes away and you can buy a lovely detach home between $300,000 to $400,000. The life style here is more relaxing and the pace is much slower. Many people feel that it is a better place to raise a family because the crime rate is low. You have a sense of community belonging where everyone knows each other.
No wonder many young professionals working from home move to small towns. Here, home ownership is affordable and one can live comfortably. Builders are catching on and some of them go a step further by building almost Net Zero homes. Net Zero homes are homes that generate enough clean energy as they use.
These homes are insulated with better insulation than regular homes. They have triple panel windows, led lights and high efficiency appliances. The hot water and the living space are heated by geo thermal heat pumps, and the solar panel from the roof generates electricity. Rain water collected in tanks is used to flush the toilets, water the grass and for laundry. These homes are hooked up to all utilities as well.
The combination of lower cost for utilities and cleaner energy and the attractive price appeal to the professionals and active adults who are about to retire. Many retirees have their money tied up within their homes and so their choices are very limited. They are house rich but cash poor.
Real Estate in Toronto are high even in this down turn. Moving to smaller cities can provide retirees a more enjoyable lifestyle.
One of my clients sold their condo in Toronto for $350,000, bought a small detached home in Huntsville for $225,000 and another property in Florida for $125,000. They spend their winters in Florida and their summers in Huntsville.
Small towns are catering for this age group. There are many retirement projects that focus on adult living including gated communities. With more and more people moving to the suburbs, many predict that Toronto will become less populated.
However, I don’t believe this to be true. A large country like Canada with only 36 Million people and about 10 percent of the work force approaching retirement, will create a huge financial burden for us as a nation. The best solution is to allow immigrants to migrate. Most immigrants will settle in big cities. With more and more people working from home, there will be many vacant office spaces. The new trend is to convert the office space into custom designed condos suites.
Ontario is a beautiful Province and it’s up to you to discover it. If you are one of those professionals who worked from home or if you are planning for retirement, take a 90 minutes drive and check out the small towns.