5 Reasons You Should Downsize Into a Duplex in Retirement

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Researchers from AARP found that 77% of adults over the age of 50 want to remain in their homes for the long term. However, that may not be the right strategy for your retirement. Another option is downsizing and moving into a duplex. 

Here are five reasons why downsizing into a duplex could be a smart move for your retirement.

Extra Passive Income

First, you can rent out the part of your duplex that you don’t live in. Average rental prices in the U.S. are around $1,739. That could be extra money you get every month to fund your retirement.

What would you do with an extra $1,739? You could travel more. Help out family members when they need it. Or just leave yourself an extra financial cushion for whatever the future brings.

A Smaller, Cheaper Space

Maybe you bought a large four-bedroom house decades ago to raise your family in, but you no longer need or use that much space anymore. Downsizing might be practical for the new chapter of retirement.

Plus, you could save money on your monthly housing costs in a duplex. Your mortgage payment could be lower than what you pay now. But even if it’s not, you can rent out the extra unit to recuperate some of the costs. And if your house was already paid off, that extra rental income can go straight into your pocket.

Potential for Multigenerational Living

Another idea is to buy a duplex and ask family members to occupy the other unit. This can be a great way to stay connected to your loved ones during retirement. You could even make the same offer to longtime friends. 

Either way, you’d be right next door to some of the most important people in your life. That’s not always realistic in a single-family neighborhood.

Less Maintenance Work

Your duplex will probably be easier to maintain than a full-size home. You’ll have less space to look after, which means less time spent cleaning. That alone can make your retirement significantly more enjoyable.

That being said, renting out part of your duplex will come with its maintenance tasks. For example, you might have to upgrade the appliances sooner to keep up with a competitive rental market. And when something in the tenant’s unit breaks, it will be your responsibility to fix it. 

Still, your daily maintenance work should be much easier in a duplex than in a full-size home. You may just have more unexpected one-time expenses.

Beat the Competition

Finally, if you’re interested in downsizing into a duplex, now could be the ideal time to act. The baby boomer generation is reaching well into retirement age. Many will likely consider downsizing as it becomes more challenging to navigate and care for their single-family homes.

This could lead to a glut of housing inventory on the market at some point in the next decade. By acting now, you can potentially beat the rush and get a better price for your home. Doing so would leave you with more funds to purchase your ideal duplex.

What Happens When You Need Assisted Living Care?

Any housing decision you make in retirement should reflect the fact that you may need living support in old age. So you may be wondering how that should impact your decision to buy a duplex. The bottom line is that it probably shouldn’t impact your purchasing decision. To understand why, consider a few scenarios.

First, you might decide to leave the duplex and move into a retirement community. If so, you could the sell property or start renting both units out for extra income. Either way, you should do OK financially. 

Or maybe you’ll choose to stay in the duplex through your full retirement. If so, you could potentially house a caregiver in the other unit. That could be a way to offset some of your support costs as you grow older.

No matter what the future brings, there’s a good chance that a duplex will leave you with the financial flexibility to meet it. Just make sure that buying one fits your financial plan for retirement before acting.

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