Are you Real Estate Rich but Cash Poor?
In this decade, the baby boomers are the emerging market again, as they prepare and enjoy their retirement. A lot of companies are conceptualizing products that would cater to their needs and wants. It is perceived that they have the buying capacity to enjoy all these things. But not all are priviledged to have enough cash to finance their retirement days. For many, the biggest savings they have is their house. But, how can they achieve their retirement goals when all their funds are tied up to their house?
Here are some links that are worth reading if you are real estate rich but cash poor (some are applicable to the non-baby boomers too) :
US
The CPA Journal: House Rich but Cash Poor (Personal Financial Planning) by Michael A. Holt
It explains sale-leaseback arrangements and reverse mortgages, as the two most common methods available to unlock an elderly’s home without having to give-up their residence.
Investment News: Startup firm allows homeowners to tap equity without payments by Brooke Southall
This article gives an insight on Real Estate Equity Exchange Inc. also known as "Rex". The company will give their consumers cash representing up to 15% of their home’s value. In exchange they have to give the company up to 52.5% of the capital gains when the subject property is sold.
Australia
Donnelly’s Investing Times: Strategies for Asset Rich Cash Poor Homeowners by Charles Beelaerts
It discusses the advantages and disadvantages of reverse mortgages, sell and stay arrangement and downsizing as available options for the asset rich and cash poor homeowners.
UK
Lambert explained the different ways you can cash in from your property such as equity release schemes, home reversion plan, downsizing or selling part of your home to a relative or friend.
If you are a successful baby boomer enjoying your retirement, feel free to share how you used the equity of your property to finance your lifestyle now.
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POSTED IN: Retirement, Road to Profits
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