If you are reaching the age when you are thinking about retiring, you will be planning budgets based on a reduced income and probably wondering how to get by on reduced circumstances. More and more people are beginning to see PEI as an answer to their retirement issues. PEI is a small island province off the east coast of Canada with a population of 140,000. The island population grows in the summertime to over a million as many summer residents come in to swell the population. However despite average Canadian winters and thanks in large part to the PEI real estate market which is considerably easier to jump into with lower PEI home values than home prices you would find in Toronto, many are seeing Prince Edward Island as their new home year round when entering their retirement.
As the island grows, so modern amenities are taking root. In the Summerside area their is a modern hospital, a sports complex with competition style pool and 2 hockey rinks, lots of restaurants, theatres, a boardwalk and a strong senior's community. You can buy a PEI home and enter the Prince Edward Island real estate market with home prices starting in the range of $50,000 for a fixer-upper up to $300,000 for a very large, heritage house that could be used as a B&B to create an income for those who do not want to entirely stop working, but are willing to put in summers working a business, or could be renovated into apartments. There are some homes that have already been renovated into up to 6 apartments that bring in a good income. Live in one - rent the rest!
What about an extra $500 - $3000 per month to add to your retirement income? Here are the average house prices for each province in Canada as of 2012 compared with $146,000 average price for PEI homes and the PEI real estate market (Canadian Real Estate Association)
British Columbia $699,000
Newfoundland / Labrador $245,000
Nova Scotia $228,000
New Brunswick $174,000
Prince Edward Island $193,000
With PEI real estate prices at 41% of the national average that means the average homeowner could access just over $200,000 to place into another investment to help with retirement income. The table (above right) allows us to see province by province what the return would mean on a monthly basis if you sold your home elsewhere in Canada and leveraged that freed equity by purchasing in the Prince Edward Island real estate market.
Alternatively, you can use the value of PEI real estate further to your advantage and instead of investing your freed equity in financial instruments such as Mutual Funds, you could purchase a multi-residential property or several smaller, starter homes to use as rentals. You can roughly generate $400-500 of rental income from a home costing $50K to $70K. Homes of this type are readily available to the PEI real estate purchaser.
As you can see there are a number of scenarios involving a PEI real estate investment that would result in an easier lifestyle during your retirement. Check with Wally Ross, your PEI realtor and member of the Century21 PEI real estate team to discuss how this would work for you. PEI real estate prices are amongst the lowest in the country, we have reasonable climate and a friendly and relaxed lifestyle here on PEI with access to all modern amenities.