Do you belong to the ‘Fastlane Folk’?
Did you know that, within 10 years, over one million baby boomers will have reached retirement age? Hopefully, they put away their miniskirts and bell bottoms some time ago… but not their desire to get the best out of life. People are living longer than ever before so they often have the energy to venture into new areas at an age when, traditionally, they would be expected to slow down. In the UK they are known as ‘Fastlane Folk’. ‘Fastlane Folk’? It translates as ‘Fifties and ‘Sixties Trying to Launch a New Era’. They are leading the charge with one of the most popular ways for baby boomers to boost their retirement income by making creative use of their family home – or buying a house with the sole purpose of renovating it.
As a baby boomer, would you renovate?
Renovation has two financial advantages for baby boomers
1) Investment in the family home doesn’t attract capital gains tax when it is eventually sold.
2) If you create a self-contained part of the home that could be rented out it can become a revenue stream for you.
But, like anything to do with real estate, you need to approach the opportunities carefully. The renovations need to meet your longer term requirements as well as your short term needs. If you are intending to turn it into a revenue generating exercise – either in the form of rent or capital gain – here are some things to think about.
Renovating for retirement is similar to running a business. You need to manage costs down to the last cent!
- Take professional advice from your accountant to ensure your taxation and investment situation is appropriate.
- The design is one thing but don’t forget you need to organise a tight brief for tendering and for project management. Otherwise the project could blow out and you’ll reduce your investment potential.
- If you are buying a house specifically to renovate make sure you have it professionally inspected and get an architect’s opinion on the potential before you make a firm offer.
- Is the zoning going to allow you to do what you want to do? For instance local government heritage rules can make construction and development difficult.
- If you are planning a separate, rentable space within the house or garden to supplement your income do some research into what people are looking for in your area.
- Bathrooms and kitchens can make a huge difference to the appeal for if you are thinking about a self-contained, rentable space. These days, because of the explosion in apartment living, there are new, innovative (and compact) products available that are perfect for smaller spaces.
- Think about your own needs over the next 10 to 20 years. What you can manage at 40 or 50 may not suit you at 60 or 70. Seemingly little things like access (with or without steps) or the floor coverings (rugs can trip you up) make a difference as you grow older.
However, providing you do your homework, a well-designed and well-managed renovation project – that comes in on budget – can create a major boost to a retiree’s assets.
Where do you begin?
A design concept is a great way to kick-start a project like this. At this stage, an architect produces a creative design that explores a range of renovation possibilities.
The design concept might include sketches, suggestions, cost estimates and it might also address the issues of local planning guidelines and building regulations so you know whether or not your idea is practically possible. Your architect will also take into account your circumstances, lifestyle and budget so the solution will be a practical one that you can act on.
If you’d like to discuss your ideas for retirement renovations, give Mitchell & Partners a call on (02) 9519 8346 or email firstname.lastname@example.org
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