Smart Moves by Ellen James Martin

HOW TO DOWNSIZE TO TWO HOMES INSTEAD OF ONE

A retired couple in their late 60s owns a spacious red brick house in a coveted Washington, D.C., suburb where home values are still ascending. They love the walkable community -- close to shops, restaurants and, best of all, their grown daughter.

Sounds perfect, except for two factors: Upkeep on the big brick house has become arduous for the couple, and they no longer enjoy Washington winters. So they're now planning to sell the large place and downsize to two small condos -- one near their daughter's house and another in sunny Arizona.

Obviously, not all retirees can afford to swap one large house for two smaller ones. When they downsize, many must liquidate the family home just to support a basic lifestyle in a rental unit. But couples whose real estate has appreciated can now consider a two-home plan, says Margie Casey, a long-time real estate broker and the author of "Relocate at Retirement or Not?"

"A couple's primary place is usually near their base roots, ideally close to family and longtime friends," Casey says. "The second is often just a small condo or a detached 'villa' in a resort setting like the beach or mountains."

Years ago, ownership of two homes was solely for the wealthy. But now, more middle-class retirees are able to trade down from the big family house to two small domiciles in separate states.

One motivating factor for those downsizing to two smaller homes is the real estate recovery, which has raised property values in many communities.

"People are so happy that they can finally pull their equity out of that big house and move to wherever they want to live. Sometimes this involves two smaller places in different areas," Casey says.

Wherever they choose to live, most retirees want low maintenance, with exterior upkeep provided through a condo or homeowners' association.

Here are a few tips for retirees pondering a two-home plan:

-- Head to a financial planner before committing to any major move.

Casey says anyone considering two-home ownership should first discuss the financial implications with a professional adviser.

"It's a given you should talk to a financial planner who can crunch numbers and give you a second opinion," she says.

In theory, it should be no more expensive to own two small units than a big one worth twice the price. But in reality, dual homeownership can be more expensive, especially after taking into account homeowner's association fees and travel costs. Taxes are a key element as well.

"Once you investigate the taxes, you may decide to live one state away from your grandchildren, assuming that lowers your cost of living," Casey says.

-- Consider whether you'd like small-scale living in a condo.

Michael Crowley, a real estate broker and past president of the National Association of Exclusive Buyer Agents, says homebuyers contemplating the purchase of a condo should exercise caution.

"Going from a house to a condo is a big change. It's just personal taste, but some people never adjust well to condo living," he says. Those considering a dual-home retirement plan should be doubly cautious about condo purchases.

As he notes, there are other options for small-scale living that provide many of the worry-free features of a condo or apartment. For instance, in many "planned unit developments," you can buy a one-level detached unit that comes with exterior maintenance, including lawn service.

-- Factor in transportation access before deciding where to relocate.

Many a retiree has selected a retirement setting without taking into account airport access, which can be a major error.

"Try to live near an airport that's a hub for one of the major carriers. That can save you a ton on travel costs," Casey says.

Another transportation factor to consider is proximity to major roadways, including interstates.

-- Contain your expectations about visits from your offspring.

"Living near the grandkids is a top consideration for lots of retirees," Casey says, but she advises realism about how often you'll see family -- no matter how close they live.

"Your kids have busy lives, with dual careers and limited vacation time. Sure, you hope to see them often. But don't focus your whole retirement on this factor. What's equally important is to choose a lifestyle that works for you," Casey says.

-- Assess the benefits of two-home living.

One reason retirees like living in two places is to take advantage of two distinct climates, perhaps a warmer place from winter through spring and a cooler one the rest of the year.

By living in two places, many retirees have the best of both worlds. They can choose a primary setting near family and a secondary one to satisfy a quest for intellectual stimulation, perhaps in a college town where they can enjoy cultural events, lectures and classes.

Of course, not all retirees are suited to a two-home existence. Some prefer the serenity of a settled life with little travel involved. But others thrive on a dual-town living.

"The world is spinning faster and faster. While they still have time, retired people want an exciting life. There's no monotony when you live in two places," Casey says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)