Downsizing after retirement

A single-family home, for your own personal space and yard

If your current house is too big but having your own personal space (e.g., a yard or garage for projects) and not having anyone to answer to is important, a single-family home is clearly still the right choice. You just need to find something smaller. You may have dodged the issue of deciding on what type of home you want, but that doesn’t make the move any easier. Selling your current house, finding a new one, moving—here are some good articles you can read to prepare:

• Selling with or without an agent
• The pre-purchase home inspection
• Mortgage life insurance or life insurance? Which to choose?
• Moving house smoothly

Duplex vs. townhouse 

A duplex (or triplex) definitely costs less than a single-family home. Heating costs are usually lower because you share a wall with your neighbour, and outside maintenance is easier because there’s less yard.

Townhouses are generally expensive due to their location (in town!), but like a duplex they’ll cost less to heat because they’re insulated by the homes on either side. Many townhouses have a balcony instead of a back yard, so that can reduce outdoor upkeep costs.

However, these types of home have several disadvantages. Your neighbours are very close and you will need to work with them for certain repairs or maintenance, such as the roof or the siding.

Maybe a condo’s for you?

Love the idea of still being a homeowner without having to worry about too much maintenance? Or are you planning to travel and just keep a pied-à-terre to return to between trips? Condominiums do have these advantages, just remember that you won’t be the only one in charge of your investment. Co-ownership comes with rules (from the condo corporation) and sometimes restrictions (no pets, no grills, no Airbnb rentals, etc.). You’ll also have to learn to live with neighbours who are very close and can sometimes be noisy. Here are the important things to consider before buying a condo.

Good to know: Your condo will be covered by two insurance policies: yours for your own private areas and the condo corporation’s for the common areas. Do your due diligence! Review the policies and make sure the condo corporation’s contingency fund is financially sound.

Multigenerational home

Living with your kids can have a lot advantages. It lets you preserve your independence and a certain amount of personal space while being close to people who love you and are happy to help when you need it—and vice versa. But this decision should take careful consideration. You’ll need to have open, honest conversations and set some ground rules to ensure the situation works for everyone. It’s something to think about, especially since these types of homes generally sell more slowly because they’re intended for a very specific segment of the market. 

Buying an existing home with a multigenerational layout

You can buy a home that has already been designed for multigenerational living, where each family has their own space and often even their own balcony and entrance. Usually families split the cost of the home (based on the proportion of space they will occupy), maintenance, utilities, taxes, etc. 

Converting an existing home into a multigenerational home

You have three options:

• Remodel your current home
• Remodel or put an addition on your child’s home
• Purchase a new home that you remodel together

Whichever you choose, hire an expert like an architect or an architectural technologist to help with the job. You may just need to add a wall to divide the house. Make sure you check your local regulations on this type of home before you begin (it’s not always allowed!) and apply for a permit. Some municipalities require two separate mailing addresses, for example.

While there aren’t any programs specifically designed for multigenerational homes, you can take advantage of other housing subsidies or financial assistance for family caregivers or seniors:

• Quebec programs and services for seniors
• Canadian programs and services for seniors

Remember to inform your home insurance provider so they can check if you have enough coverage for the renovation work and determine your new premium once the work is completed (or premiums, if there are two mailing addresses).

Renting an apartment for greater freedom

Rentals usually cost less than buying a house or a condo (though of course it depends). That makes them a good choice if you have a limited retirement budget or if you want more freedom. Your landlord is responsible for all the maintenance (costs and labour) and you just have to call when you have a problem. 

There are definitely some drawbacks, such as neighbours on either side, poorly insulated walls, and building rules. You can’t remodel however you want (no upgrading the kitchen), but you can redecorate. Just check if you are allowed to put colour on the walls.

Also, just because you’re renting doesn’t mean you don’t have any liability anymore. Did you know that your landlord’s insurance policy doesn’t cover your personal property? That’s why you need tenant insurance,  to protect your belongings both at home and away (for example, if someone steals your camera while you’re on vacation, or your bike). Civil liability insurance is also a lifesaver if there’s a fire or water damage that also affects other apartments. 

Retirement home or seniors’ residence

All across Quebec there are private seniors’ residences (also called retirement homes) specifically for seniors who are still mostly or entirely independent. In addition to a private space all your own (an apartment or room), you’ll have access to a wealth of services and conveniences, depending on the size of the complex: dining options, gyms, pools, movie theatres, bowling alleys, organized activities, etc. Prices vary. Check out the Directory of Retirement Homes in Quebec. If you have CAA-Quebec home insurance, you can also get help from The Assistant for personal life. 

The public system also offers several housing options if you require special care. Contact your CLSC.

Cottage or second home

Picturing yourself in a cottage on a lake or a second home in the country, and finally able to do it now that you’re retired? It’s a wonderful plan. First, set yourself a budget. Then determine where you want to look, depending on how long a drive you’re willing to make whenever you want to get away to your little retreat.

The process of buying a cottage is pretty much the same as buying a house. But here it’s all the more important to get a thorough home inspection and septic tank inspection before you buy. Some cottages have grandfathered rights, and a new owner may not be able to make additions or renovations. Waterfront cottages are the most sought after—and the most expensive. If you have your heart set on one, check what types of vessels are allowed and whether or not you need a mooring permit. Planning to use the Internet at your cottage? Make sure the area has good service.

If you’re considering building something, be sure to choose your contractor wisely. CAA-Quebec’s network of Approved Suppliers includes qualified, reliable contractors in every region of Quebec.

Bear in mind that this will be a second home to finance (with the same rules as for a primary residence, except there’s a cap on the loan amount and the debt service ratio), maintain (you’ll need to close up your cottage for the winter and reopen it come springtime if it’s not accessible year-round), and insure. You’ll also have to pay municipal taxes and utilities there, and just like for any other home, have a cushion for unexpected expenses.

Watch out for flood zones

Many cottages are located in flood zones and aren’t covered for water damage. Even if the seller tells you the river hasn’t flooded in ten years, you never know!  Municipalities may even refuse to let you rebuild on the current site after a flood. Your insurance agent can tell you what coverage is available.

Whatever living arrangement you choose for your retirement, it requires some thought. CAA-Quebec Residential Advisory Services can answer many of your questions or refer you to the right resources. And of course, don’t forget your home insurance. Here are a few tips to save on your premium. 

Last but not least, remember to do seasonal maintenance on your home to protect your investment.