Over the past decade, residential real estate prices have more than doubled in some areas. For retirees and pre-retirees, this brings both opportunities and challenges. While your home is an important part of your retirement plan, it can’t take the place of a diversified investment portfolio.
Lack of liquidity
One of the biggest drawbacks to real estate is lack of liquidity. In other words, if you want to sell your home, it could take weeks or even months to find a buyer. With mutual funds or stocks, you can often sell the same day.
Real estate values are not the same across the country or the province and can be affected by a range of local factors. The Calgary market, for example, was red hot when oil prices were high, but when the price of oil dropped, home values declined as well. Unforeseen events like these could have an impact on your home’s value right when you need it most.
A diversified plan is the answer
A well-thought-out plan helps give you the flexibility you need to make the decisions that are right for you. A financial advisor can help you make the most of your home equity and maintain an investment portfolio that reflects your need for security, income and growth.