For many people looking for a tax-friendly retirement, no-income-tax states like Florida usually top the list. But recent data indicate an interesting trend: More and more older adults are choosing a small Mid-Atlantic state where the retirement math is more interesting than some might expect.

We’re talking about Delaware.

According to U.S. Census Bureau data, Delaware’s population of residents age 65 and older has increased by 23% since 2020. That’s the fastest growth rate in the nation for the 65-and-older population, according to Census estimates.

Part of the draw might be that newcomers to beach communities like Lewes, Rehoboth Beach and Milton can enjoy a coastal lifestyle without moving far from family and friends elsewhere in the Northeast and Mid-Atlantic.

Interestingly, though Delaware isn't a zero-income-tax state like retirement powerhouses Florida or Texas, taxes factor into the equation for some retirees running the numbers. Here’s more to know.

Why Delaware is becoming a retirement destination

Delaware is becoming increasingly popular with older adults.

• Seniors now make up nearly 22% of the state’s population, according to USAFacts, compared with roughly 18% nationwide.
• In Sussex County, older adults make up nearly a third of residents, pushing the median age to just over 53 years, according to U.S. Census estimates.

New residents are also arriving with financial resources. The latest available IRS migration data show that households moving into southern Delaware from higher-cost states have average annual incomes over $136,000.

So what makes Delaware appealing as a retirement destination? The answer lines up in several ways with what many retirees say they want in a place to live.

• A 2025 survey from the Transamerica Center for Retirement Studies found that an affordable cost of living was the top consideration, cited by 65% of retirees, followed closely by proximity to family and friends at 61%.
• Access to excellent health care and hospitals ranked third, cited by 49%, while 28% pointed to leisure and recreational activities.

Delaware's healthcare infrastructure is geared toward an aging population. For example, in Sussex County, Beebe Healthcare operates a 210-bed medical center in Lewes, while ChristianaCare has reportedly expanded primary care and senior-focused services in Rehoboth Beach and Milford.

Additionally, retirees from neighboring Mid-Atlantic states may choose Delaware for its proximity to children, grandchildren, and longtime friends without giving up a coastal lifestyle.

There’s also plenty to do beyond the beaches.

Southern Delaware offers miles of hiking and biking trails, including those at Cape Henlopen State Park and the Junction & Breakwater Trail linking Rehoboth Beach and Lewes, along with boating, fishing, and golf. Other areas are bustling with restaurants, boutiques, and galleries, plus live music, festivals, and other events throughout the year.

Those amenties help explain the First State’s appeal. But for some retirees from higher-cost states, the retirement math also includes taxes.

How Delaware taxes retirement income

Delaware levies a progressive state income tax with rates ranging from 2.2% to 6.6%. However, retirees rarely pay Delaware income tax on their full income. That’s because:

Delaware exempts Social Security benefits from state tax. (The state also doesn’t tax Railroad Retirement benefits.)

Delaware offers retirement income exclusions. Residents age 60 and older can exclude up to $12,500 of eligible pension and retirement income from state taxable income. Qualifying sources include distributions from IRAs and 401(k)s, as well as dividends, capital gains, interest, and net rental income.

For a married couple where both spouses are at least 60, each spouse can generally claim up to a $12,500 exclusion for eligible retirement income, for a combined potential exclusion of $25,000.

For some retirees, those exclusions could result in a lower state tax bill than they would face on the same retirement income in other states.

Note: We're talking about state tax liability. You still may have federal taxes on retirement income to consider.

Sales and property tax tradeoffs

However, income taxes are only part of the tax equation. Delaware offers zero sales tax and relatively low property taxes.

• No sales tax: Delaware has no state or local sales tax, which can reduce the cost of everyday purchases and larger expenses. (Florida, by comparison, has a 6% statewide sales tax, plus local surtaxes in many counties.)
• Low property taxes: Delaware’s effective property tax rate is about 0.54%, compared with 0.78% in Florida, according to 2026 Tax Foundation data. The actual difference depends on the home’s value, location, and applicable exemptions.

But…that doesn't necessarily make Delaware the cheaper place to own a home.

Sussex County's growth (nearly 40,000 residents in the past six years) has reportedly increased housing demand and pushed prices higher. That can be good news for people who already own homes there, but it can be a different story for retirees just arriving.

Someone moving to Delaware for retirement from a high property-tax state might see lower property taxes while paying more for the house itself.

Delaware vs Florida cost of living

While Florida draws attention for having no state income tax, the full financial picture can change once other costs enter the calculation.

The following table shows how various costs might add up.

Average Annual Costs in Florida and Delaware

Note: This comparison, for educational purposes only, assumes a $500,000 primary residence, $500,000 in homeowners insurance dwelling coverage, and $20,000 in annual taxable purchases. Property-tax estimates use 2026 statewide effective rates; insurance estimates use 2026 published rates; and Florida sales tax uses the 2026 average combined state and local rate.

State income taxes are excluded because they vary by income, deductions, and exemptions. Actual costs vary by location, coverage, exemptions, and spending.

Is retiring in Delaware a good idea? Bottom line

For some retirees, the appeal of a retirement state isn't always about finding the lowest income-tax rate. It's about what happens when you add up all the smaller pieces of the budget.

Before choosing a retirement destination, consider the sometimes seemingly "hidden" costs that follow you into retirement — including how retirement income is taxed, what you'll pay to own a home, and how much you plan to spend each year.

The state you might assume to be cheapest due to having no income tax might not necessarily be the one that leaves you with the most money to spend.

Related

• College Towns Are Becoming Popular Retirement Destinations
• Retirement Taxes: How All 50 States Tax Retirees
• How the IRS Taxes Retirement Income
• The Five States With No Sales Tax

Renovating a home to make it more welcoming for grandchildren doesn't mean sacrificing comfort, safety or design aesthetic. In fact, some of the best home improvements bridge the generational gap by combining "aging-in-place" functionality for grandparents with highly engaging features for kids.

These five ideas for high-impact, high-end home upgrades offer maximum appeal to grandchildren while providing long-term value, safety and comfort for grandparents.

1. The multigenerational home theater & media room

Converting a spare bedroom or basement into a media room provides a quiet escape for movies, reading or music. For tech-savvy grandchildren, it becomes the ultimate entertainment zone.

• For Grandparents: Installing comfortable, supportive and easy-to-exit reclining chairs makes movie nights accessible. Acoustic wall panels and high-quality soundbars improve dialogue clarity for those with mild hearing loss without needing to turn the overall volume to uncomfortable levels.
• For Grandchildren: High-performance gaming consoles, a large smart tv or projector and customizable smart lighting (such as color-changing LED strips) create an immersive hangout spot.

2. A low-maintenance, high-adventure backyard

Transforming a traditional backyard into a dynamic outdoor living space encourages kids to put down their screens and enjoy the outdoors, while ensuring the terrain remains safe and navigable.

• For Grandparents: Wide, level non-slip paved pathways (using materials like brushed concrete or textured pavers) reduce tripping hazards. Raised garden beds allow for easy gardening without bending down, and low-maintenance native landscaping reduces the physical strain of yard work.
• For Grandchildren: A well-integrated, custom play structure — such as an in-ground trampoline (which sits flush with the lawn, reducing fall hazards and keeping sightlines open) — provides endless active play. Just follow key safety tips. You can even add a basketball hoop and LED lights.

3. The ultimate bunk room (with smart built-ins)

Converting a guest room into a dedicated bunk room maximizes sleeping capacity for family visits while leaving plenty of floor space for daytime play.

• For Grandparents: Sturdy, custom-built bunk beds with integrated, wide staircases (rather than vertical, flimsy ladders) make it much easier and safer to help kids make the bed, change the sheets or tuck them in at night. Use washable paint and easy-to-clean fabrics to minimize mess.
• For Grandchildren: Bunks with individual reading lights, built-in USB charging ports, personal privacy curtains and dedicated toy storage cubbies give kids their own secret-fort-like retreat.

4. Zero-Threshold "wet room" bathroom

Upgrading a traditional bathroom to a modern, open-concept "wet room" with a curb-free shower is one of the smartest investments for aging-in-place that also feels incredibly luxurious.

• For Grandparents: Eliminating the tub ledge removes one of the biggest tripping hazards in the home. Slip-resistant textured floor tiles, a built-in teak shower bench and stylish, integrated grab bars (some look like high-end towel racks) ensure safe, independent bathing.
• For Grandchildren: A spacious wet room is perfect for rinsing off after a day of messy outdoor play. Features like dual showerheads — including a slide-bar handheld sprayer — make it simple to adjust the water height for toddlers up to teenagers. Although most toddlers and young children take baths, this feature can help grandparents who worry about lifting them in and out of the tub.

5. An interactive kitchen island & snack station

The kitchen is the natural heart of the home. Modifying your kitchen layout to include a double-sided, multi-level island fosters connection through cooking and baking.

• For Grandparents: Under-counter drawer appliances (like a drawer microwave or drawer refrigerator) eliminate the need to dig blindly in lower drawers or reach high above the stove. Pull-out pantry shelves and touchless faucets make daily food preparation physically easier.
• For Grandchildren: A lower counter tier on the island allows kids to safely pull up a stool to help bake cookies or do crafts. A dedicated under-counter "snack drawer" and beverage fridge stocked with kid-friendly drinks gives them the independence to grab their own snacks without needing assistance. Of course, this type of access is for older children; if your grandkids are still babies or toddlers, make sure your lower cabinets have safety locks.

It's all about having fun

At the end of the day, home isn't just about brick and mortar — it's about the memories, giggles and shared stories created inside its walls. Investing in your space to make hosting easier and more exciting is really an investment in family connection, opening the door to years of seamless visits and priceless traditions.

So bring on the blanket forts, the backyard adventures and the late-night movie snacks! With a home designed to welcome every generation with open arms, you’re all set to be the favorite destination for years to come.

Major home upgrades can make your space more enjoyable for the whole family, but they can also come with a significant price tag. A financial professional can help you determine how renovations fit into your retirement budget and longer-term financial goals.

Use the tool below to connect with a vetted financial professional today:

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Living cheaply is the dream, but in 2026, high housing costs are often the reality.

Even after securing a home, many homeowners face recurring ownership expenses — like property taxes, utility bills, and sudden home insurance spikes — that come as a costly surprise.

Some relocate to a state without an income tax in search of financial relief. However, to offset the lack of a personal income tax, several states have steep sales taxes or heavy property tax bills. Others rely on natural resources, energy production, or tourism taxes to keep the burden off resident homeowners.

Below, we rank all nine states with no personal income tax by their homeowner cost score, ordered from most costly to least costly. Here's the result.

States that don't tax income ranked by home costs

To rank each state, Kiplinger combined three key homeownership expenses into a single weighted homeowner cost score:

• Property taxes (50% of the score): Using PropertyShark data (citing 5-year U.S. Census Bureau estimates), Kiplinger examined the median property tax bill. Because property taxes can be a homeowner's largest recurring bill (besides a mortgage), this metric makes up half of the state's total score.
• Utility bills (30% of the score): Using Move.org data, Kiplinger aggregated average annual costs for electricity, natural gas, water/sewer, and internet/TV. This accounts for nearly a third of the score.
• Home insurance costs (20% of the score): Using LendingTree data (sourced from Quadrant Information Services), Kiplinger analyzed average annual premiums for a standard policy with a $1,000 deductible.

To account for recent market conditions, scores also reflect present-day market adjustments, including coastal insurance spikes, heavy summer cooling demand, and remote freight/heating overhead.

9. New Hampshire: Low home insurance, high property taxes

Homeowner cost score: 155

Ranking as the most costly state on our list, New Hampshire incurs a weighted score of 155, driven primarily by exceptionally high property taxes. This is largely due to the Granite State's high effective property tax rate of 1.5% — well above the national average of around .90%, according to the Tax Foundation.

High costs: Lacking a state sales tax and state income tax, New Hampshire relies heavily on local property taxes to fund public services. Utility bills are also elevated (around 21% above the national average).

On the bright side: New Hampshire homeowners enjoy relatively low insurance costs due to minimal coastline exposure and stable climate risks. Plus, the state levies no state estate or inheritance tax, meaning family real estate can be passed down to heirs without a state "death tax."

8. Texas: High insurance costs for a no-income tax state

Homeowner cost score: 150

Texas ranks near the bottom for homeowner affordability due to high property tax rates and surging homeowners insurance. Texas homeowners pay high monthly housing costs that rank among the highest in the nation relative to local incomes, according to 2026 reports by Rice University's Kinder Institute for Urban Research.

High costs: Like New Hampshire, Texas relies on high effective property tax rates to fund local government (since there is no personal income tax). Simultaneously, severe weather risks drive up average annual homeowners insurance premiums substantially, along with high summer air-conditioning electric bills.

On the bright side: Residents age 65 and older can ease their tax burden through homestead exemptions that decrease assessed property values for school districts. Texas also charges no estate tax, preserving wealth for heirs and keeping select areas relatively affordable.

Related: 10 Cheapest Places to Live in Texas

7. Florida: Insurance crisis drives homeowner costs

Homeowner cost score: 103 to 155

Florida's score spans a wide range because homeowners insurance premiums vary widely by location. In inland counties, costs remain closer to national averages; in coastal zones, persistently high insurance rates push Florida toward the top of the overall unaffordability rankings, according to data from the Insurance Information Institute and LendingTree.

Related: 10 Cheapest Places to Live in Florida

High costs: While Florida's median property tax bill is moderate, homeowners insurance premiums have surged in recent years — often reaching $5,000 to $10,000 annually — due to increased hurricane risks and reinsurance spikes. Year-round air conditioning demands also drive up utility bills.

On the bright side: Florida offers a standard $50,000 homestead property tax exemption for primary residences (with expansions being considered on upcoming ballots). Florida also levies no state estate tax, which can potentially save heirs money.

See also: Florida Voters to Decide on $250,000 Property Tax Exemption

6. Alaska: High utility bills and low property tax burden

Homeowner cost score: 84 to 151

Alaska presents a unique financial landscape: while its vast rural boroughs are entirely free of property taxes, this benefit is confined to remote areas. For most residents, living in the state means balancing significant urban property taxes against extreme geography that triggers high utility and shipping costs, as highlighted in Move.org's annual utility report.

High costs: Alaska's annual utility bills are among the highest in the nation — with electric and heating bills running roughly 50% above the U.S. average due to harsh winters and remote fuel delivery.

On the bright side: Alaska homeowners enjoy low base insurance rates thanks to zero hurricane risk, and substantial state oil revenues eliminate state income and state-level sales taxes. Plus, Alaska pays eligible residents an annual Permanent Fund Dividend (PFD) check, offers a $150,000 homestead exemption for homeowners 65 and older, and charges no state estate tax.

5. Washington: Moderate utility bills, higher property tax

Homeowner cost score: 133

Washington lands in the middle tier of non-income-tax states. Although the Evergreen State levies no personal income tax on standard wages, high home prices drive up annual property tax bills, according to U.S. Census Bureau estimates.

High costs: Property tax bills exceed the national average because local municipalities rely considerably on property assessments for funding. Total utility costs are higher than average, and Washington levies a state tax on certain high-value capital gains in addition to a state estate tax capped at 20% (as well as a 9.9% Washington income tax starting 2028 for earners with more than $1 million).

On the bright side: Washington state homeowners insurance premiums remain 35% below the national average, per LendingTree data, even though some local premiums have climbed in recent years. Also, homeowners continue to benefit from lower electricity rates than most of the country, thanks to relatively cheap hydroelectric power.

Related: 10 Cheapest Places to Live in Washington

4. South Dakota: Near national averages for homeowner costs

Homeowner cost score: 102

South Dakota aligns closely with the weighted national baseline for recurring home bills, scoring about 2% above the U.S. average according to data from LendingTree and PropertyShark.

High costs: Severe Midwest weather, including frequent hail and tornado risks, drives home insurance premiums higher than the national average. However, despite the state's rural nature, everyday costs like groceries generally remain at or below the U.S. average due to a strong local agricultural economy.

On the bright side: Local property tax bills hover near or slightly below national midpoints, partially offset by state sales tax revenues. Renewable wind power and hydroelectric generation help keep utility costs manageable. South Dakota also offers a senior property tax assessment freeze for qualifying households and levies no state death tax.

3. Nevada: Relatively low taxes with seasonal utility shocks

Homeowner cost score: 100

Nevada can be tax-friendly for homeowners, but its final cost score depends greatly on the season.

High costs: Nevada summer heatwaves trigger utility bill surges that push utilities above average, while mild winters may help keep costs low. For this reason, peak summer bills can surpass the national average, even though recent statewide averages have dropped significantly below it, per Move.org and LendingTree.

On the bright side: Nevada limits annual tax growth through state-mandated property tax caps and a low assessment ratio. Additionally, weighty tourism tax revenue from millions of out-of-state visitors helps fund public infrastructure, keeping residential property taxes and insurance rates down. Nevada also has no state estate or inheritance tax, making it attractive for passing assets to heirs.

2. Wyoming: Below-average homeownership costs

Homeowner cost score: 96

Wyoming is the second-most affordable state without an income tax for homeowners, boasting property tax burdens up to 40% below the national average according to Tax Foundation property tax maps.

High costs: Rising energy prices have increased utility bills in Wyoming. Groceries and other essential goods can be more expensive in remote towns.

On the bright side: Like Alaska, Wyoming funds much of its state budget through natural resource extraction (coal, oil, and gas) rather than residential property taxes. Low base property taxes and reasonable insurance keep total carrying costs well below national midpoints. Wyoming charges no estate or inheritance taxes, which can preserve real estate value for future generations.

1. Tennessee: Lowest overall homeownership costs

Homeowner cost score: 95

Tennessee claims the #1 spot as the most affordable state for homeowners among those with no income tax. A combination of low property tax assessments and stable carrying costs gives the Volunteer State the lowest overall score, according to PropertyShark and Census data.

High costs: Home insurance rates have risen sharply in recent years, making Tennessee the 7th most expensive state for homeowners insurance, according to LendingTree. Tennessee also has one of the highest sales tax rates in the U.S..

On the bright side: Tennessee boasts some of the lowest average property tax rates in the nation. Plus, the overall cost of fixed housing overhead keeps recurring homeowner bills highly competitive compared to most other non-income-tax states. The state also has no estate tax and offers property tax relief programs for low-income seniors aged 65 and older — making some places in Tennessee cheap to live.

Read More

• 10 Can't-Miss Tax Breaks for Homeowners and Homebuyers
• States With the Lowest Property Tax Bills Ranked by Affordability
• Most Expensive States for Homeowners in 2026

Equifax has agreed to create a $100 million settlement fund over allegations that a coding error caused it to send inaccurate credit scores to lenders in 2022. Roughly 4 million people could be covered by the settlement.

Claims aren't open yet. The proposed settlement still needs final court approval, with a hearing scheduled for January 22, 2027. If approved, eligible consumers will receive information about how to submit a claim for payment.

Equifax has denied wrongdoing, and the settlement does not constitute an admission of liability. Here's what to know about the proposed settlement, who may qualify and what happens next.

What happened with Equifax credit scores?

According to DiCello Levitt, one of the law firms representing consumers in the case, Equifax misreported lower credit scores for about 4 million people who applied for mortgages, auto loans or credit cards between March 17 and April 6, 2022. The coding error resulted in some lenders receiving inaccurate credit scores.

That matters because lenders use credit scores when deciding whether to approve applications and what interest rates and terms to offer. The lawsuit alleges that some applicants were denied credit, charged higher interest rates or otherwise received less favorable terms because of the incorrect scores.

Equifax has maintained that most scores didn't change substantially. The company previously said fewer than 300,000 people experienced a score change of 25 points or more, according to ConsumerAffairs.

Who could qualify for the Equifax settlement?

About 4 million people are estimated to be included in the settlement class. The settlement covers consumers whose credit scores were inaccurately reported because of the coding error.

You may want to pay particular attention to the settlement if you applied for credit during the affected period, including a:

• Mortgage
• Auto loan
• Credit card
• Other credit product

This may be especially relevant if you were unexpectedly denied credit, received a higher interest rate or were offered less favorable terms. However, simply applying for credit during the affected period doesn't necessarily mean you're eligible for a payment.

More information about eligibility and the claims process is expected as the settlement moves toward final approval. We’ll update this story as new details, including how to file a claim, become available.

How much money could you receive?

The proposed settlement creates a $100 million fund that will be used to make payments to people who submit valid claims. However, no individual payment amount has been announced.

How much each person receives will depend on factors including the number of valid claims submitted and how much money remains after court-approved legal fees, administrative costs and other expenses are deducted.

The settlement fund is non-reversionary, meaning money left over from the claims process won't be returned to Equifax.

Can you file an Equifax settlement claim yet?

No. Those affected can't file a claim for the Equifax settlement yet. The proposed settlement has received preliminary approval. This means the case can move forward, but claims aren't open and no payments are being distributed yet.

Once the court approves the settlement notice, people covered by the settlement are expected to have 90 days to submit a valid claim. More information about how to file, eligibility requirements and important deadlines should be provided as the settlement moves forward.

A final fairness hearing is scheduled for Jan. 22, 2027. At that hearing, the court will consider whether to grant final approval to the settlement.

In the meantime, be cautious of emails, texts or websites claiming they can get you an Equifax settlement payment now. Don't pay anyone to file, secure or expedite a claim on your behalf.

What should you do now?

Since claims aren't open yet, there's nothing you need to file right now. However, if you applied for credit during the affected period, it's worth holding on to any records you still have from that application, particularly documents showing a denial, interest rate or other terms you were offered.

Keep an eye out for an official settlement notice with information about eligibility, deadlines and how to submit a claim. Be cautious of unexpected emails or texts promising an immediate payment, especially if you're asked to pay a fee or provide sensitive financial information.

A credit score is only one part of your financial picture

Your credit score can influence the rates and terms you're offered when you borrow, but it's only one piece of your overall financial health. A financial adviser can help you look at the bigger picture, from managing debt and building savings to planning for retirement and other long-term goals.

Use the tool below to connect with a vetted financial professional and get started today:

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In April, the IRS and the Department of the Treasury released Revenue Procedure 2026-12. Here's what it means in plain English: The federal government handed state governors the official playbook, and the official map, for nominating the next generation of Opportunity Zones.

When the One Big Beautiful Bill Act (OBBBA) made Opportunity Zones permanent in July 2025, the industry had to wait nine months for the guidelines to be released.

Here are five things I think every investor with significant capital gains needs to understand.

1. We know exactly which communities are eligible

Revenue Procedure 2026-12 doesn't just describe the nomination process. It identifies, by name and by census tract, every community in America that qualifies for Opportunity Zone designation in 2027.

The number? 25,332 population census tracts across the United States, the District of Columbia and U.S. territories. Every single one of them meets the definition of a low-income community under the updated rules of the OBBBA.

The IRS formally adopted the 2020-2024 American Community Survey five-year dataset as the controlling data source for determining eligibility — locking in the methodology and removing any ambiguity about which tracts qualify and which don't.

Not all 25,332 tracts will become Opportunity Zones. Governors can nominate up to only 25% of their state's eligible tracts. But investors and developers are no longer guessing which tracts are eligible to be nominated.

2. Rural America is a bigger part of the story than ever

Of those 25,332 eligible tracts, 8,334 are classified as fully rural. That's roughly one out of every three eligible communities.

This matters for two reasons. First, the OBBBA created powerful new incentives specifically for rural Opportunity Zone investments. Investors in Qualified Rural Opportunity Funds receive a 30% basis step-up after five years, triple the standard 10%, and rural properties benefit from a reduced substantial improvement threshold of just 50% instead of 100%.

These aren't minor tweaks — they fundamentally change the math on deals that wouldn't have penciled out under the original program.

Second, the law requires that states give rural communities meaningful representation in their nominations. With a third of all eligible tracts classified as rural, governors will have both the incentive and the inventory to direct capital into parts of the country that have historically been overlooked by institutional investors.

For those of us who believe Opportunity Zones should be about real economic development in communities that genuinely need it, this is encouraging news.

3. The clock is ticking

Here's the timeline every investor should have on their calendar.

The nomination window opened on July 1, 2026. State governors — along with the mayor of Washington, D.C., and territorial executives — have less than 45 days to submit their nominated census tracts to the Treasury Department.

That puts the initial deadline at September 28, 2026, with a provision for a single 30-day extension that could push final submissions to October 28.

One important detail from the new guidance: States can submit and revise their nominations multiple times during the window, and nominations filed early in the window aren't processed until the window closes. In other words, this isn't a race to gain first-mover advantage — it's a thoughtful, deliberative process designed to arrive at the best possible outcome.

If you're a developer or community leader trying to make the case for a particular tract, you have a genuine window to advocate right up until the deadline.

After the nomination window closes, Treasury will review and certify the selections. The IRS has indicated it expects to publish the final designated Opportunity Zones before January 1, 2027, the date the new OZ 2.0 map officially takes effect.

Treasury has also announced that it will roll out online tools and resources to help state officials with the nomination process, which should make this round smoother than the sometimes chaotic 2018 experience.

But here's what I want you to take away: If you're an investor or a fund manager, you don't have the luxury of waiting until the final map drops in December.

The smart money is positioning now, identifying likely zones, building relationships with developers and local officials and structuring deals to be ready to deploy capital the moment the new designations go live.

4. Fewer zones, fixed boundaries and more competition for the best deals

One thing that sometimes gets lost in the excitement is this: OZ 2.0 will almost certainly have fewer designated Opportunity Zones than OZ 1.0.

Under the original program, there were 8,764 designated zones. Industry estimates suggest the new round will produce roughly 6,300 to 6,500, a reduction of about 25%.

That's because the eligibility rules are tighter:

• The median family income threshold dropped from 80% to 70%
• The contiguous tract loophole (which allowed some higher-income areas to qualify under OZ 1.0) has been eliminated
• Tracts that qualify based on high poverty rates are now disqualified if their median family income exceeds 125% of the area median

Here's something else the new guidance confirms that should matter to anyone doing long-horizon underwriting: The OZ 2.0 tract boundaries are drawn from the 2020 decennial census map and are set in stone for the entire decade the designation is active, which is January 1, 2027, through December 31, 2036.

No redrawing of lines. No splitting of tracts. No adjustments of any kind. Whatever map gets certified in late 2026 is the map for the next 10 years. That's the kind of certainty that serious investors and fund sponsors can build a strategy around.

Fewer zones do not mean fewer opportunities. It means the zones that do get designated are more likely to be genuinely distressed communities where investment capital can make a real difference. But it also means that the best deals in the best locations are going to attract more competition. Early movers will have a meaningful advantage.

5. Puerto Rico investors: Your timeline is different

If you have Opportunity Zone money in Puerto Rico, this one's for you, and it may come as a surprise.

Most investors know that the original OZ 1.0 designations across the 50 states run through December 31, 2028. What many don't realize is that Puerto Rico has always operated on its own schedule.

Back in 2018, the Bipartisan Budget Act gave the island a unique deal: Every eligible tract was automatically designated as an Opportunity Zone, and that designation was backdated to the passage of the Tax Cuts and Jobs Act (TCJA) on December 22, 2017. That was a full year before most states received their designations.

Both parts of that unique deal are now history.

A 10-year clock that started in December 2017 doesn't end in December 2028. It ends in December 2027. The new guidance makes this point clearly, and that gives Puerto Rico investors one less year than they may have been counting on.

In addition, Puerto Rico will play by the same rules as everyone else going forward: No more automatic island-wide coverage. The governor will nominate up to 25% of eligible tracts, just like every other state.

That's a dramatic reduction in scope for a territory where nearly all census tracts were previously designated.

If you have exposure to Puerto Rico in your OZ portfolio, now is the time to review and make sure your timeline assumptions still hold up.

What all of this means for you

If you have unrealized capital gains — whether from real estate, a business sale, stock or any other appreciated asset — and you've been thinking about Opportunity Zone investing, the new guidelines should sharpen your focus.

The OZ 2.0 framework is no longer theoretical. The eligible tracts are published. The timeline is set. The boundaries are locked. And the enhanced benefits, especially for rural investments, are some of the most generous tax incentives the federal government has ever offered.

This is the starting gun. The investors who do their due diligence now, not in January 2027, will be the ones best positioned to capture the full power of what OZ 2.0 has to offer.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Power outages are more than inconvenient; for homes relying on medical equipment, they're a safety risk. Additionally, there's another, quieter crisis hitting homes: The 116% surge in electricity costs over the past 25 years.

To illustrate, the average electricity rate in August of 2000 was 0.091 cents per kWh. In July of 2026, that rate increased to 0.197 cents per kWh, according to the Federal Reserve Bank of St. Louis.

For many homeowners, the conversation around solar use circles back to a single metric: The financial return on investment. However, if you're looking at the next chapter of your life, the true value of these systems extends far beyond a monthly electric bill. It represents building a resilient homestead and moving away from reliance on an outdated and overtaxed grid.

How homeowners can prepare for an unreliable grid

The reality is we are relying on an electrical grid built over 100 years ago. Dr. Michael Stadler, an expert in energy systems and the Chief Technology Officer at Xendee, told Kiplinger this will become increasingly problematic as demand from climate change and AI data centers increases.

The Department of Energy released a report last year titled Report on Evaluating U.S. Grid Reliability and Security. It warns that blackouts could increase one hundredfold in 2030 if the US continues to shutter reliable power sources and doesn't add more firm capacity.

Reliability on an aging network is a cost issue. Most importantly, it's a stability issue too. If you're a homeowner, this creates an almost must-have shift away from traditional means to energy sovereignty. A solar and battery system can serve as an insurance policy, ensuring your home remains powered and secure even with increasing blackouts.

How to make your home more energy independent

One of the shifts is seeing homeowners move away from passive consumption, where you rely on your electric utility/supplier for power, to self-sufficient hubs. Using photovoltaics (PV) and battery storage means you've created a localized microgrid.

This has several advantages for your home's journey toward energy independence. It means that when rolling blackouts or power outages occur, your home will retain power since it isn't relying on the grid. And you can sell your excess power (offsets or net metering) to your local energy company if your state laws allow.

What's more, smart control systems make it easy to manage power. It optimizes how you use and store electricity, and when to sell it, based on real-time grid needs. Dr. Stadler recommends selling offsets during peak demand, when you're likely to earn more for them. This automation not only helps you optimize earnings, but it also protects your home for years to come.

Is the ROI worth it?

While these systems require a significant initial investment, usually in the $20,000 to $40,000 range, federal tax incentives, such as the Clean Electricity Investment Credit, provide a six percent tax credit on the qualified investment. Dr. Stadler notes that if your current rate is at or above 20 cents per kWh, the economics of installing such a system become increasingly favorable.

Keep in mind that your electric rate is only one component of your bill. In my case, I found that the transmission/delivery fee is almost half of what I pay. With solar, the excess energy gained and sold could help offset these delivery fees while reducing your energy reliance on the grid, bringing down costs even more.

Another consideration is that solar is clean energy. In some cases, the energy you receive from your electric company can be dirty. Dirty electricity can take the form of high-voltage spikes, harmonic distortions and surges that, over time, can shorten the lifespan of your appliances and electronics.

Is your home ready for a microgrid?

Keep in mind that not every home will be an ideal fit for a microgrid. Use this checklist to evaluate whether your home has the elements required for a successful transition:

• Roof health: Make sure your roof shingles and structure are in good shape since solar panels last 25 to 35 years. If not, you'll need to budget for a new roof.
• Sun exposure: Does your home have obstructions such as large trees or neighboring buildings that cast ample shade? This might limit its effectiveness.
• Energy use: Examine the last year of utility bills to determine your average kWh monthly. This is essential for choosing the right-sized system for your home.
• Local regulations: Read up on your state's net-metering policies. Some homeowners associations might also have restrictions on where you place panels.
• Critical load: Determine which appliances you want on during an outage, as this will decide the battery storage system size you need.

Taking these considerations into account can help you determine if your home is ready for a microgrid.

Ultimately, investing in solar isn't only about reducing your electricity bills; it's about building a resilient, energy-efficient asset. Solar is becoming an essential home improvement that secures your property's independence in a future where grid reliability isn't guaranteed.

Making your home more energy independent can be a significant investment. A financial professional can help you build a plan for upgrades such as solar and battery storage while balancing them with your other financial priorities.

Use the tool below to connect with a financial professional and get started:

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Homeowners age 62 and older hold almost $15 trillion in home equity, nearly double the total of early 2020, according to data from the National Reverse Mortgage Lenders Association. If you own your home or another property, you have another financial resource for renovations, debt consolidation, extra income or even a business investment. But accessing that value is not as simple as withdrawing cash from the bank or selling shares in a retirement account.

"Using home equity is a puzzle," says Ashley Morgan, a debt attorney in Chantilly, Va. "It goes beyond whether you can afford to take the money out. You also need to consider how that decision fits with your future financial and housing goals."

Whether you need extra money now or simply want to understand the possibilities, here's what you should know about using home equity in retirement.

1. There are multiple ways to tap home equity.

Home equity is the portion of a property's value that you own outright. In other words, it's what you would receive if you sold, after paying any remaining mortgage debt and transaction costs.

Selling is the simplest way to cash out your equity, but there are other ways to access that value while staying in your home, each with its own tradeoffs.

The right option depends on what you need the money for, whether you can afford ongoing loan payments and whether the property still fits how and where you want to live in retirement.

2. A HELOC provides borrowing flexibility.

With a home equity line of credit (HELOC), you receive a borrowing limit based on the value of your property. You decide when and how much to draw, and typically owe interest only on the amount borrowed. After you repay the balance, that credit generally becomes available to borrow again.

"A HELOC gives you the ability to prepare for future expenses or cover projects that happen in multiple stages," says Fabien Thierry, head of home equity lending at Citizens Bank. However, HELOCs typically charge adjustable interest rates, so the monthly payment can change.

3. A home equity loan makes sense for a specific need.

A home equity loan provides a lump sum of cash upfront, which you repay on a set schedule, usually with a fixed interest rate and monthly payments.

Interest begins accruing on the full amount immediately, and some loans charge a prepayment penalty if you repay early. Home equity loans can work well for a specific expense, such as a major renovation or accessibility upgrade.

In a 2026 Citizens Bank survey of homeowners, 44% said renovating their property to fit their needs better was their most realistic housing option. Just 13% said buying another home felt achievable.

4. Borrowing against your home equity is affordable, but carries extra risk.

Home equity loans and HELOCs use your house as collateral. Interest rates for home equity loans and HELOCs averaged about 8%, compared with 12% for unsecured personal loans and nearly 20% for credit cards, according to a national Bankrate survey of lenders in June 2026.

The tradeoff is that if you fail to make the scheduled payments, the lender could eventually foreclose on your home.

5. A reverse mortgage lets you stay in the home without monthly loan payments.

A federally insured Home Equity Conversion Mortgage is available starting at age 62. You can receive the money as a lump sum, installment payments or as a line of credit.

Interest and fees are added to the loan balance over time. The balance becomes due when you sell the property, move out permanently or pass away. However, your heirs will not owe more than the property's value if the loan balance grows beyond it.

You must continue to cover property taxes and insurance, and keep the home in good condition. Otherwise, the lender could foreclose on the home.

6. Home equity investments offer cash, but at a high price.

With a home equity investment (HEIs), also known as a home equity sharing agreement, you sell a percentage of your equity to an investor. You get cash upfront and don't owe ongoing loan payments. Instead, the investor collects when you sell or refinance the home later.

These deals have grown more popular as homeowners look for ways to tap their equity without adding another monthly bill. Because the cost is deferred and tied to the home's future value, they can feel far less expensive than they are.

Here's an example: A homeowner receives $50,000, equal to 10% of a $500,000 home's value. They would owe $110,000 after 10 years if the property appreciates at 1.5% annually, or $187,000 if it appreciates at 5.5% annually, based on estimates from Point, an online provider of HEIs. Processing and other fees can also reduce the cash you receive.

By comparison, a 10-year home equity loan for the same amount at an 8% interest rate would cost about $73,000 to repay. "The seller may not realize how much upside they are giving away," says Luca Rassenti, a financial adviser in Tucson, Ariz.

7 Compare your options.

When borrowing against the equity in your home, compare offers from several lenders before committing. "Look at the rate, the support during the application process and how quickly you can get the money," says Thierry from Citizens Bank. Many banks offer online calculators that can give you an initial estimate of the rate and monthly payment.

Shopping around also matters for reverse mortgages and home equity investments, where fees and contract terms vary considerably.

Use the Bankrate tool below to explore and compare today's top refinance offers:

8. Selling unlocks your equity, but costs can add up.

Selling is the most direct way to access all your home equity. Downsizing to a less expensive property can also free up cash and reduce future housing costs.

However, you will lose value due to transaction costs and taxes, typically running up to 10% of the property for selling and 5% for buying another one, according to Zillow. So price out the full cost of the move before counting on a large amount of extra cash.

Single homeowners can exclude up to $250,000 of profit from their taxes for the sale of a primary residence, or $500,000 for a married couple filing jointly, as long as you (or your spouse) have lived in the home for two out of the last five years. "If you've owned a house for many years, you could have a substantial taxable gain," says Morgan, the debt attorney from Virginia.

9. Saving equity prepares for future needs.

Untapped home equity can serve as a reserve for later costs, including assisted living or long-term care. About 80% of 65-year-olds will need long-term care at some point, according to the Center for Retirement Research, and costs can run over $100,000 per year.

Before tapping your equity for a less urgent expense, consider whether other savings or assets could cover it and preserve that buffer.

10. Include your heirs in the plan.

When you pass away, your real estate receives a step-up in basis to its market value at that time. That means your heirs could sell it without owing taxes on the appreciation during your ownership.

If you need cash, Rassenti suggests asking your heirs whether they would provide a loan or gift today, with the expectation that they will inherit the property later. They may also have emotional reasons for wanting to keep a longtime home in the family. "Talk to the kids about what matters to them," says Morgan.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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For many homeowners, today's housing market feels like a stalemate. Elevated mortgage rates and limited inventory have left many people choosing to stay put rather than make a move.

A recent report from Citizens, where I am the head of Mortgage and Consumer Lending, found that only 13% of American homeowners say that buying a new home feels realistic in the current economic environment.

But not everyone has the luxury of waiting. Job relocations, family changes and caregiving responsibilities continue regardless of market conditions. For these "must-move" buyers, the question isn't whether to act, but how to move forward in a difficult market.

Many begin the process with a strategic, financially focused approach. Affordability remains a top concern. However, market conditions frequently prompt buyers to pivot.

Many buyers enter the process expecting their current home to be the biggest hurdle. Increasingly, we're seeing the opposite. Homes might sell quickly, while limited inventory and competition make finding the next property significantly more difficult.

Managing the gap

For homeowners who need to sell one home and buy another, the challenge is often less about completing a transaction and more about managing the gap between two transactions that rarely align perfectly.

Navigating this environment requires flexibility. A clear understanding of the financing and liquidity tools available can help bridge those gaps, but many buyers aren't sure where to start.

The same report from Citizens reveals that 63% of homeowners are likely to need financing for a home purchase or improvement within the next five years, yet 39% say they don't understand how financing options work.

In addition, 27% are either unfamiliar with home equity or have not yet explored how to use it.

Lots to discover

This knowledge gap can complicate an already complex process. Beyond finding the right home, buyers must evaluate loan options, compare costs and manage timing — all while dealing with uncertainty around rates and inventory.

For those who need to move quickly, liquidity and flexibility are critical. Some buyers are exploring ways to tap into their existing home equity, including home equity lines of credit (HELOCs) and home equity loans.

About 40% of HELOC applications at Citizens reach final approval in 10 days or less, helping borrowers act decisively without prolonged uncertainty.

These options allow homeowners to borrow against the value they've built in their current property, which can be useful when the competitive market makes the purchasing timeline difficult to pin down.

For example, a buyer relocating for work might have a defined timeline to sell the current home and secure housing in a new region. Too often, those timelines don't align.

A home might sell quickly, but a lack of suitable options can delay the purchase of the next property, creating the need for interim housing or temporary financing solutions.

In these situations, accessing home equity can help bridge liquidity gaps and reduce pressure to make rushed decisions.

Buyers can also strengthen their position by obtaining a fully underwritten commitment letter from a lender, which verifies income, credit and debt-to-income ratio before they begin making offers.

Explore your options

That said, home-equity products and a strong position in the market aren't the only paths toward a successful transaction, and they don't come risk-free. Sale contingencies are an option, but most sellers prefer to avoid them.

Alternatively, buyers who want to hold on selling their home before buying can consider a bridge loan, which is designed to provide short-term financing that "bridges" the gap between buying a new home and selling the current one, giving buyers the funds to make an offer before their existing home closes.

That opens the possibility of carrying two housing payments at once and causing great financial strain. The flexibility of a HELOC's draw period allows borrowers to pace principal and interest repayments, which can be useful for smoothing out cash flow in early repayment years.

Understanding these risks is key to making decisions that will best position the buyer financially, far beyond the transactional moment of moving.

Easing the strain

Even when equipped with solid information, buying a home under pressure can be difficult. Practical guidance and realistic expectations can help buyers make more confident decisions.

In today's challenging market, buyers should build a trusted team of advisers — including real estate professionals and lenders — early in the process. They can also anticipate setbacks and consider temporary housing if necessary to avoid compromising on their goals.

When buyers fully understand their options, they are better positioned to make decisions that support their long-term financial health.

While some experts suggest the housing market is at a standstill, the must-movers prove that the market hasn't shut down completely. People are still buying homes, just with a stronger need for reliable guidance when timing isn't ideal. They want to understand every possible financial risk before listing.

In this landscape, buyers who take the time to understand their financing options and plan for liquidity are better positioned to navigate the market thoughtfully, even when waiting isn't an option.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Owning a vacation home means you'll have a place of your own to retreat to whenever you feel the calling. You won't have to worry about local hotels booking up or getting stuck in a dodgy rental that makes your skin crawl. It's a popular move for setting up the lifestyle and community you want in retirement.

If you don't want to bear the financial burden of buying and maintaining a vacation home on your own, you could opt to buy one with friends. For example, if there's a couple you and your spouse know who tend to vacation in the same spots you prefer, you could choose your ideal destination, buy a home together, and share in the benefits and costs.

In theory, it's a good idea. But it may be more complex and risky than you'd expect.

The right structure is key

At face value, co-owning a vacation home might seem smart. In practice, it's important to have the proper setup, says Raul Gastesi, partner and co-founder of Gastesi Lopez Mestre & Cobiella PLLC.

Set up an LLC

"Two couples buying a vacation home together should not take title in four individual names," Gastesi insists. "They should form a limited liability company, have the LLC purchase and hold the property, and have the couples own membership interests in the company."

The reason, Gastesi says, boils down to liability.

"A vacation home means guests, a pool or a dock, someone else's grandchildren, and, if the couples ever rent it out when they are not using it, a stream of strangers," he explains. "If someone is injured on that property, a claim against jointly held real estate is a claim against all four owners personally, which puts retirement accounts and primary residences into the conversation."

On the other hand, Gastesi says, if the LLC owns the property, any claims that arise are made against the company and its insurance.

"That protection matters most in the short-term rental scenario, which is where a lot of these arrangements end up once the couples realize the house sits empty 10 months a year," Gastesi says.

Gastesi also cautions that an LLC is not a substitute for good insurance.

"The policy needs to be written in the company's name for the right kind of use, but it is the layer that keeps a bad accident from reaching everyone's personal balance sheet," he explains.

Think through financing hurdles

Of course, one pitfall is that if you'll be financing the property, Gastesi warns that a mortgage may be hard to come by.

"Many residential lenders will not write a conventional mortgage to an LLC," he explains. "Some buyers close individually and transfer the property into the company afterward, but that transfer can trigger the mortgage's due-on-sale clause."

Gastesi also points out that a vacation home does not qualify for the capital gains exclusion available on a primary residence.

Know how co-ownership impacts estate planning

Co-owning a home with friends means you'll need to document everything carefully to ensure all parties pay their share and reap equitable benefits. That may seem easy enough to arrange. But what happens if an owner passes away?

According to Gastesi, this is where the LLC earns its keep a second time.

"When the company owns the real estate, each couple owns a membership interest, which is personal property rather than real estate," he explains. "That interest passes under their estate plan. It does not pass automatically to the surviving couple."

What this means, though, is that in the absence of careful planning, that interest may also land with heirs who may not want a vacation home, may not be able to afford their share of it, and may have no relationship with the other couple.

"That is how a friendly arrangement turns into a dispute between people who never agreed to be in business together," Gastesi says. The fix, he says, belongs in the operating agreement, not each couple's will.

"[That agreement] should contain buy-sell provisions triggered by death, divorce, incapacity, bankruptcy, or failure to pay, a right of first refusal in favor of the other couple, an agreed method for setting the price such as an independent appraisal, and payment terms spread over time," he says.

Another reason to go the LLC route?

"If the vacation home sits in a state where neither couple lives, real estate held directly requires a probate proceeding in that second state when an owner dies," Gastesi explains. "A membership interest in an LLC is personal property, which generally avoids that ancillary administration. For a Florida couple with a mountain house in North Carolina, or the reverse, that alone can justify the structure."

Keeping the friendship intact

The right structure and operating agreement can protect you and the couple you're looking to buy a home with financially if one of you passes away. But to preserve the friendship, Kevin Tamlyn, founder of Next Stage Financial, says it's important to set clear ground rules

"Relying on 'we'll just figure it out as we go' is a recipe for a ruined friendship," Tamlyn says. "Sit down together and get crystal clear on the money, day-to-day living, and an exit strategy."

Tamlyn also suggests pooling money into a shared checking account that covers three to six months of expenses like HOA fees, property taxes, insurance, utilities, and routine maintenance. Then pay all running costs from that account.

Tamlyn says it's also important to agree on how to split peak dates.

"A simple rotation, like flipping prime summer weeks or alternating Thanksgiving and Christmas each year, prevents quiet resentment," he insists.

Additionally, establish a clear policy on guests and pets. Also, spell out what happens if one couple wants or needs out.

"Life changes," Tamlyn says. "Someone might need cash for medical expenses, want to move closer to grandkids, or simply stop using the home. Agree on how you’ll value the home when someone wants to leave."

Gastesi agrees and says a strong operating agreement could be the ticket to keeping the friendship intact.

"Its job is to absorb the disagreements so the friendship does not have to," he explains.

Finally, Gastesi says, each couple should have their own attorney review the operating agreement to ensure that they're comfortable with its contents.

"It costs a little more at the start," he says. However, "it's the clearest signal that both sides understood what they signed, which is exactly what you want on the record if the arrangement is ever tested."

Read More

• We Bought a Vacation Home for Retirement We Never Use. Should We Sell or Rent It Out?
• How Smart Retirees Turn a Second Home Into a Financial Asset
• Vacation Rental in Retirement: Should You Airbnb or Vrbo Your Home for Extra Cash?

"Ellen" called me on day 38.

I hear some version of that call every week.

She had sold an apartment building she had owned for 19 years. The closing went smoothly. Her attorney was good, her qualified intermediary was competent, and the proceeds were sitting safely in the exchange account.

The only problem was that she had seven days left to decide what to do with the rest of her life.

She had spent the first 38 days doing what most people do. She toured four buildings. Two were overpriced. One had a tenant problem she did not want to inherit. The fourth was fine, and she did not want it. Every week, the phone rang with someone who had heard she was flush with cash and had something to sell her.

By the time she called me, she was not evaluating anything. She was picking.

That is the 45-day trap. It has almost nothing to do with the calendar and almost everything to do with the sequence.

The two clocks and when they start

A 1031 exchange runs on two timers, and both start on the same day: The day you transfer the property you are selling.

You generally have 45 calendar days to identify a potential replacement property in writing, and you must receive the replacement by the earlier of 180 days after that transfer or the due date, including extensions, of your federal income tax return for that year. The IRS lays out the timing in Publication 544.

Now read that first sentence again. The clocks do not start when you find a buyer. They do not start when you go under contract. They start at closing — the moment you have the least attention and energy to spare, because you have just spent three months getting a deal to the table.

These are calendar days. Weekends count. Holidays count. December 25 counts. Day 45 does not move to Monday because it landed on a Saturday. Under the Treasury regulations governing deferred exchanges, the identification generally has to be in a signed writing, describe the property unambiguously and go to a permitted party in the exchange.

A conversation with your broker does not count, and neither does a note to your own accountant or attorney. The rules treat your own agents as disqualified recipients.

Three ways to identify and one way to undo your own work

Most investors know about the 45 days. Far fewer know that how you identify is its own trap.

Those same regulations provide three tests for identifying multiple replacement properties:

• The three-property rule. Identify up to three properties, at any value.
• The 200% rule. Identify any number of properties, as long as their combined fair market value does not exceed twice the value of what you sold.
• The 95% rule. Identify as many as you like at any value, but you must actually acquire at least 95% of the total value identified. This is a rule of last resort, not a planning tool.

Here is the part that costs people money. If you identify four properties and blow past the 200% ceiling, the extra identifications do not simply fall away and leave you with three good ones.

Unless you satisfy the 95% rule, or actually close on the property inside the 45 days, you can be treated as having identified nothing at all, and the exchange can fail. You would learn this in April, from your CPA, about a decision you made in October.

You can revoke or change an identification before the deadline, in writing, delivered to whoever received the original. After day 45, nothing changes. You may only buy from the list you filed.

Anyone can count to three. The failures happen when someone tries to keep options open on day 44 and quietly converts a valid identification into a void one.

The fourth-quarter problem

Here is a deadline almost nobody hears about until it has already cost them.

Your exchange period is not automatically 180 days. It ends on the earlier of day 180 or the due date of your return, including extensions.

Sell in June, and this is academic. Sell in late October or later, and it is not, because that is when day 180 starts landing after your return is due.

A November 15 closing puts day 180 in the middle of May. But if you file your return on April 15 without an extension, your exchange period ended on April 15. You lost roughly a month of runway and, quite possibly, the exchange along with it.

The fix is usually a one-page form. Most individual filers use Form 4868. Filed properly and on time, the extension is automatic, and you do not have to explain why you want it. File it by the original due date and your filing deadline moves to October 15, which pushes the end of your exchange period out past day 180.

The right form depends on how you file your return, whether as an individual, a partnership or a corporation, so confirm it with your CPA.

Two things to be clear about. An extension buys more time to file, not more time to pay. Any tax you expect to owe is still due on the original date. And do not file that return early. Once it is filed, you can no longer obtain an extension for that year, which leaves you capped at the original due date.

If you closed in the fourth quarter, file the extension even if you expect to finish the exchange in February.

Urgency disguises itself as conviction

The mechanical traps are the easy ones. The expensive one is psychological.

I have watched investors grow more certain as the deadline approaches, not because the property improved, but because the cost of walking away became visible. Once a large tax bill is attached to the decision, "I need more time" starts to feel like, "I am choosing to pay the tax." That is a very uncomfortable sentence to say out loud on day 40, so people stop saying it.

What follows is predictable. Contingencies get waived that would have mattered in any ordinary purchase. Capital expenditures get underestimated. Debt gets replaced with financing that is expensive or restrictive, because matching the debt became the only goal.

And the danger is not limited to obviously bad property. A perfectly respectable building can still be wrong for you. A 70-year-old who sold because he was tired of tenants can exchange into a replacement that quietly hands him the same job back. Someone who needs liquidity can defer a tax bill by buying an asset he cannot exit.

A successful exchange is not measured only by whether the tax was deferred. It should leave you owning something you would have bought without a countdown clock.

What to do before you close

The way to manage the 45-day window is to do most of the work before it opens. Before the relinquished property closes, and ideally before it is listed, I would want these six things done:

1. Know what the deferral is actually worth. Have your tax professional model the federal and state consequences, including depreciation recapture. You cannot rationally decide how much risk to accept in exchange for deferral until you know the size of what you are deferring.

2. Set the reinvestment range. Estimate proceeds, exchange equity and how much debt must be replaced to avoid taxable "boot." Decide in advance whether some cash should intentionally be retained and taxed rather than forced into a replacement.

3. Decide which structures are on the table. Directly owned property, passive fractional interests, or some combination. That should be driven by what you want your life to look like, not by what happens to be available in week six.

4. Write down your underwriting standards. Acceptable property types, markets, leverage, hold periods, deal-breakers. A written standard is much harder to negotiate away under pressure than an unwritten one.

5. Prepare more than one path. A primary replacement can fail inspection, financing or the seller. A backup should be something you would be content to own, not a placeholder typed onto an identification form on day 44.

One wrinkle worth knowing: If you identify three properties but intend to acquire only one, ask your qualified intermediary whether the others should be designated as alternates.

Otherwise, after purchasing one property, you may remain entitled under the exchange agreement to acquire the other two, and your intermediary may be unable to release any unspent exchange funds until the exchange period ends.

6. Assemble the team before the sale. The qualified intermediary must be engaged before closing; if the proceeds touch your hands, there is no exchange to salvage. You should not spend the first two weeks of a 45-day window finding the people you need to execute it.

A note on passive replacements

This is usually where Delaware statutory trusts (DSTs) enter the conversation, and because my firm advises clients on DST investments, I want to be careful not to present convenience as suitability.

A DST can come together quickly. You are not negotiating a purchase price or arranging property-level financing, and an open offering can accept an investor quickly. That is exactly why one so often appears late in an exchange.

Chosen deliberately, as part of a plan made before the sale, a passive replacement can be the right answer. Whether a DST fits you at all is a separate question, with its own set of tests.

Chosen at day 43, it is not a plan. It is whatever was available.

If a DST belongs in your exchange, it belonged in the plan before you closed. Not on day 43.

Back to Ellen

Ellen identified three potential replacements on day 44, including a DST, and ultimately invested in the DST on day 71.

The investment worked out. She receives distributions, she no longer fields calls about water heaters, and by any objective measure the outcome was fine.

But she did not choose it. She landed on it. And when she describes the sale now, 19 years of ownership come out in one sentence and the last six weeks take 20 minutes.

The deadline was never really the problem. It is fixed, published and knowable. The problem was that the most consequential financial decision of Ellen's life got made during the seven days when she had the most pressure and the least information.

You generally cannot extend the 45 days. But you can decide how prepared you are when they start.

If you are approaching a sale and want to work through these decisions while you still have time to make them, you can read more about Sera Capital's 1031 exchange planning process. We are a fee-only fiduciary firm and earn no commissions on any investment.

Related Content

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• Six Risks of Delaware Statutory Trusts in 1031 Exchanges
• I'm a Real Estate Investing Pro: This Is How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• Why Your Next 1031 Exchange Decision Might Not Be About Taxes (It Could Be About Life)
• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Wealth Wise is Kiplinger's advice column on navigating retirement-related dilemmas. Got a question? See below for how to send it to us.

Dear Wealth Wise: We've saved almost $4 million: $3.2 million in retirement and a $500K inheritance from my father that we put toward education and has already grown to almost $800K. I'm 53 and my husband is 54. Our children are ages 16, 13 and 10.

My husband and I work full-time but want to retire in eight years once our youngest graduates high school. Staying in our starter home helped us save, but we outgrew it years ago. We have equity in our home we could use to upsize, but we'd triple our mortgage payments and take on higher property taxes and insurance. We're not sure how much additional money we'll be able to save.

Can we just say we've saved enough for retirement plus college for three kids? In a few years, it won't make sense to upsize since our kids will be moving out. We've worked hard and would enjoy a bigger space. We're willing to downsize in eight years along with retiring. I see buying a bigger house as a very expensive rental to get more space while we see our kids through to college. — Cramped but Cautious.

Dear Cramped but Cautious: Saving for retirement often requires sacrifice. By staying in a starter home, you have clearly saved a bundle and understandably want to upsize while it still makes sense.

You might struggle to find something affordable. During the first quarter of 2020, the median U.S. home sale price was $329,000. Today, it's $410,700. That marks a roughly 25% increase. Throw in elevated mortgage rates, and it's no wonder you question if you can keep saving after upsizing.

But do you really need to worry? Let's see what our experts have to say.

You've probably saved enough for retirement

Moving to a larger home can feel like a risky financial decision when it means you don't have extra money to fund a retirement account. But Christopher Walsh, regional marketing director and financial adviser at Capital Choice Financial Group, says that assuming your future income needs aren't too outrageous, you're probably OK to stop contributing toward retirement.

"I would say for the most part, your work is done," Walsh says. "If your investable assets continue to compound around 9%, and if you follow the rule of 72, your retirement [account] should be near double what it is today."

Walsh says that if you also follow the 4% rule in retirement, that should provide an income of about $256,000 a year. Keep in mind that a 9% return might be too high a goal as you near retirement and invest more in fixed income. You'll also need to account for inflation. Still, with Social Security added in the income mix, you should have plenty with which to work.

"For most people, that's an outstanding retirement income and should also empower you both to leave quite a legacy for your children," Walsh insists.

Watch out for the expensive college years

While your strong nest egg positions you well to hit the brakes on retirement savings, it's the college years that might trip you up, says Michael McSweeney, financial adviser at Ascend Wealth Partners.

"An $800,000 balance should go a long way toward paying for college," McSweeney acknowledges. Your family's college savings are far ahead of the average 529 college savings account balance, which had slightly more than $34,000 at the end of 2025.

"That said, I'd be careful not to underestimate what the next eight years will look like," cautioned McSweeney. "Having three children close in age means there could be several years where college costs run $50,000 to $100,000 per year, or more, on top of their normal living expenses."

Given that you're looking at expensive college costs in the years leading up to retirement, the danger, says McSweeney, is being tempted to tap your nest egg to cover added expenses that arise, such as expensive off-campus housing or airfare to a distant school. That would still likely leave you with plenty of money to retire on, but it does change the math.

"That's why I would think twice about buying a larger home," McSweeney says. "The question isn't whether they can afford it. It's whether it makes sense to dramatically increase their housing costs for a home they already expect to sell in eight years."

As McSweeney points out, "A larger house doesn't just mean a bigger mortgage. It usually means higher property taxes, insurance, utilities, maintenance and furnishing costs."

There may be options other than buying a new, more expensive home

Eager as you might be to upsize while you still have kids living at home, whether it makes the most financial sense is questionable, says McSweeney. His recommendation? Renovate your current home to make it more comfortable.

"A home equity line of credit (HELOC) could be a great tool here," McSweeney says. "They can tap into the equity they've built over the years to remodel the kitchen, update bathrooms, finish a basement, add usable living space or make other improvements that help the house function better for a family with teenagers."

The payment on a reasonable HELOC, McSweeney explains, might be much lower than the cost of upgrading to a more expensive home. That way, he says, if you want to downsize in eight years, you'll have an updated home that's easier to sell.

The downside? Because they’ve lived in this starter home so long, their capital gain might already be approaching the $500,000 tax-free exclusion for married couples. Staying put for eight more years means future appreciation might be taxed. (Documenting qualified renovation costs will raise their home's cost basis, helping to offset some of that future tax bill).

The verdict: Go for it (or renovate)

All told, you can probably afford to stop saving for retirement and college and buy the bigger house you've always wanted. But you'll need to decide if it's worth the potential financial stress.

"When you factor in transaction costs, mortgage interest, property taxes, insurance, maintenance and moving expenses, they're spending a significant amount of money for something they already know is temporary. That's not necessarily wrong, but it's a lifestyle decision, not a financial investment."

If living in that bigger home is important to you, then you should go for it. You've earned it. But if you can make your current home work with a thoughtful renovation, McSweeney says, you'll likely enjoy these last few years with your kids just as much while keeping your monthly expenses lower, preserving more flexibility and putting yourself in an even stronger position when it's finally time to retire.

"They've spent years making smart financial choices, including staying in a modest home while building nearly $4 million in assets. I wouldn't abandon that strategy just a few years before retirement," McSweeney says.

A word from Wealth Wise on college costs

One of the hardest lifetime expenses to plan for (aside from retirement) is college. We agree that $800,000 for three children is a robust college fund, leaving an average of $266,000 for each child. That's almost exactly what four years of private college would cost ($60,920 times four years), according to College Board Research (PDF).

The reality, however, is that few students pay full price these days. As the table above shows, the net cost of attendance is about $28,000 less than the "official," published cost of attendance. Even if your income is high, your child might qualify for merit-based aid. Moreover, your child might choose an in-state public school which is much more affordable; the net cost of attendance at a public college was $21,340, according to the same study.

Still, it doesn't hurt to have plenty of college savings. Your child might wish to take a gap year abroad before college starts or might need more than four years to complete their educations.

Finally, if one of your children wants to go to law school or study medicine, they might need to stretch their college funds into graduate school.

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our writers and experts in this advice column are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial adviser regarding any questions you may have in relation to the matters discussed in this article.

More Wealth Wise Retirement Advice

• I Have a Sizable Roth IRA. Do I Still Need a 529 for My Grandkids' College?
• Should We Bankroll Our Son's $180K Law School Tuition Even Though We're Retired?
• Can You Actually Get Paid to Care for an Aging Parent?
• He's 49 and 'Burned Out.' Can He Afford to Quit a $200K Job?
• 'Subsidized Adulting': Can You Afford to Help Your Children Financially?
• Should Fully Funded Retirees Invest Like 30-Year-Olds?
• Is a 60/40 Portfolio Too Aggressive When You're in Your Seventies?
• You’ve Mastered Asset Allocation — Now It’s Time for Asset Location
• A Multimillionaire Wants to Marry Again. How Can She Protect Her Money?
• Should We Borrow Money From Our Elderly Father?
• Should We Downsize or Drain Our 401(k) to Pay Off Our Home?

Read More on Downsizing

• You May Not Want to Downsize in Retirement: Here's Why
• We Are Retired, Mortgage-Free, With $970K in Savings. My Husband Wants to Downsize to Lower Our Costs, but I Love Our House. Help!
• 6 Myths About Downsizing in Retirement

Marcus had done everything right.

He had bought a small strip mall in 2011, managed it through two recessions, survived a pandemic that emptied three of his five tenant bays and come out the other side with a property worth nearly four times what he paid for it. He was 61, his wife was ready to travel, and he was tired.

When he finally sold, his accountant looked up from the numbers and said the words Marcus had been expecting: "You need to do a 1031 exchange."

Of course he did. Everyone does a 1031.

Except … did he?

Why so many investors default to a 1031 exchange

The 1031 exchange is one of the most powerful tools in the real estate investor's toolkit. Used correctly, it lets you defer capital gains taxes indefinitely, compound your wealth inside the investment and, if structured right, potentially pass a stepped-up basis to your heirs and eliminate the deferred gain entirely.

As chief investment strategist at Provident Wealth Advisors, I've written about it extensively, I use it with clients regularly, and it belongs in the conversation for almost every investor facing a real estate sale.

Almost every investor.

The problem isn't that 1031 exchanges are overrated; they're absolutely not. The problem is that "you sold a property" has become automatic shorthand for "you're doing a 1031," and few people stop to ask whether the math and their life actually support it.

Here's the honest conversation more investors need to have.

The tax tail and the investment dog

There's a version of the 1031 exchange that works beautifully: You sell Property A, you've identified a strong replacement property you would have bought anyway, and the exchange lets you do it with pretax dollars. That's the dream. That's the brochure.

Here's what happens more often than advisers admit: The investor sells Property A, the 45-day identification clock starts running, and suddenly the goal isn't "find the best investment," it's "find something that qualifies before time runs out." In a thin, overpriced market, that pressure is dangerous.

When interest rates are elevated and property prices haven't fully adjusted to reflect that reality, replacement properties are expensive on a cash-flow basis. You may be buying a $2 million asset that yields 4% annually, in a world where Treasury bills pay 4.5%. You're not buying because it's a great investment. You're buying because the alternative is writing a large check to the IRS.

That's the tax tail wagging the investment dog.

The real question Marcus, and every investor in his position, should ask: If I ignore the tax bill entirely, would I still want to buy this replacement property?

If the answer is yes, do the exchange. If the answer is "not really, but it beats paying taxes," slow down and think about the options.

Running the actual numbers

Let's say Marcus's adjusted basis in that strip mall is $400,000, and he sold it for $1.5 million. His capital gain is roughly $1.1 million. At combined federal and state rates — long-term capital gains, net investment income tax (NIIT) and depreciation recapture — he might face a tax bill in the neighborhood of $280,000 to $350,000, depending on his state and income situation.

That feels catastrophic, unless you reframe it.

He would net somewhere between $1.15 million and $1.2 million after taxes. Invested conservatively at a 6% annual return, that $1.15 million becomes about $2.06 million in 10 years.

That's a real number. But here's what that comparison misses.

A $1.5 million replacement property generating 4% annual income produces $60,000 in income per year before debt service and expenses. Add even modest appreciation — say, 3% annually, a conservative assumption by historical real estate standards — and that property is worth about $2 million at the end of year 10.

Stack the cumulative income on top of that, and the total picture is closer to $2.6 million over the same period.

The 1031 path, in other words, puts higher numbers on the board over time, because it keeps the full pretax capital working in an appreciating asset rather than a reduced post-tax sum.

The honest caveat: The deferred tax liability doesn't disappear. It follows the asset until you sell, exchange again or die holding it. If Marcus holds the replacement property until his death, his heirs receive a stepped-up basis, and the entire deferred gain is eliminated forever.

If he sells without a plan, the IRS eventually collects. The 1031 is a deferral tool, not a permanent solution on its own.

Which is exactly why the choice of what to exchange into matters as much as whether to exchange at all.

The burnout problem nobody talks about

There's also a conversation that almost never happens in the exchange paperwork: Do you actually want to be a landlord again?

For investors like Marcus — in his mid-60s, two decades into managing tenants, watching his peers downsize their lives rather than expand their portfolios — the traditional 1031 exchange can become a trap.

You defer the taxes, sure. But you also defer the exit. The next property has its own lease expirations, its own roof and its own tenant who stops paying rent in month eight of a five-year lease.

This is where the Delaware Statutory Trust deserves a serious look, not as a footnote, but as the actual solution.

A DST allows Marcus to complete his 1031 exchange into a fractional ownership interest in institutional-grade real estate — a professionally managed multifamily community, a medical office portfolio, a net-lease industrial facility — without taking on any management responsibility whatsoever.

He owns real estate. A professional sponsor runs it. The 1031 deferral is fully preserved. The passive income distributions keep coming.

And here's the part that ties the numbers together. Because the full pretax proceeds go to work inside a real, appreciating asset, not a reduced post-tax sum in a brokerage account, Marcus gets the full benefit of both income and long-term appreciation that make the 1031 math compelling in the first place. He just doesn't have to unclog a drain to earn it.

For the investor who is done with active management but not done with real estate, the DST is often not a compromise. It's the upgrade.

The structure requires a genuine long-term commitment — typically five to seven years — and is not the right fit for someone who wants liquidity or operational control. But for Marcus, who wants passive income, preserved wealth and a legitimate exit from the landlord business without a tax catastrophe? The DST isn't Plan B. It may well be Plan A.

That said, if you truly want out — clean, simple, liquid — sometimes paying the tax is the honest answer.

The estate planning equation

Here's the angle that changes the math for many older investors — and that most people discover too late.

When you die holding an appreciated asset, your heirs receive a stepped-up cost basis equal to the fair market value at the date of your death. The embedded capital gain — all of it, including decades of deferred 1031 gain — effectively disappears.

That means that if Marcus holds his replacement property until his death, his heirs inherit it at $2 million (or whatever it's worth then), with no taxable gain. The IRS never collects what Marcus spent his entire investment career deferring.

If Marcus is 61 and in good health, that math looks very different from how it looks for a 74-year-old investor with a modest estate. For investors who are doing their estate planning alongside their 1031 planning — and those two conversations should absolutely be happening simultaneously — the decision calculus shifts considerably.

The takeaway isn't that you should plan to hold until death; it's that a complete picture of the 1031 decision has to include your age, your estate plan, your health and your heirs' tax situation.

That's a bigger conversation than most people realize when they're sitting across from a qualified intermediary (QI) signing exchange documents.

The right questions to ask before you file the 1031 exchange

Before any investor pulls the trigger on a 1031 exchange, here's the short list of questions worth answering honestly:

• Am I buying to defer taxes, or because this is genuinely a good investment? There's a meaningful difference.
• What does my estate plan say about what happens to this property when I'm gone? The step-up in basis may change the entire analysis.
• Am I actually willing to be a real estate owner for another decade? There are passive alternatives if the answer is uncertain.
• Have I run a complete after-tax comparison across both paths — not just the deferral headline, but what my net proceeds actually do over time? The full picture often looks different than the tax bill alone.

Marcus, for what it's worth, did end up doing a 1031, but not into another strip mall. After sitting down to run the real numbers and finally having the estate planning conversation he'd been putting off for years, he exchanged into a passive DST structure.

No tenants. No leases. No roof calls. And best of all, his wife booked the trip.

That's not the right answer for every investor. It was the right answer for him, but only because someone asked the right questions first.

The 1031 exchange is one of the most valuable tools in American tax law. Use it when it serves your goals.

Just make sure you know what your goals actually are.

Related Content

• What a Delaware Statutory Trust Can Do for Your Kids That Your Will Can't
• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• This Is How to Use 1031 Exchanges to Scale Up Your Real Estate Empire
• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes
• This High-Performance Investment Vehicle Can Move Your Wealth Up a Gear

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For generations, the typical path to homeownership was straightforward: Save for a down payment, buy a starter home close to where you work and gradually build equity before moving up to something bigger. For some younger buyers, that sequence is changing.

As home prices and borrowing costs make purchasing in many U.S. markets difficult, some would-be homeowners are looking thousands of miles away for their first property. Instead of waiting until they can afford a $400,000 or $500,000 home domestically, they might continue renting in the U.S. while purchasing a smaller property overseas.

Reuters recently highlighted this growing interest in international real estate among younger buyers priced out of their local markets. The idea isn't entirely new. Americans have long purchased vacation homes and retirement properties abroad.

What's changing is when some buyers are doing it. International ownership introduces factors such as currency, tax, financing and legal considerations, which can quickly complicate an otherwise attractive purchase.

For buyers considering this unconventional path to homeownership, the potential savings can be compelling, but there’s a lot to weigh before purchasing property in another country.

Why an overseas home can make financial sense

The biggest attraction is relatively simple. Your money could buy considerably more in certain overseas markets.

A buyer struggling to accumulate a down payment for a home in an expensive U.S. city could potentially find an apartment or small house elsewhere for a fraction of the price. That can make buying in cash or making a substantial down payment more realistic.

There can be other financial advantages, depending on the country and property as well. Property taxes and ongoing ownership costs might be lower than those in some parts of the United States. An international property can also add geographic diversification to a buyer's assets rather than concentrating all their wealth in one local housing market.

Then there's the property's potential future use. Someone who already knows they would like to retire abroad could purchase a home years or even decades before retirement. In the meantime, it might serve as a vacation property or generate rental income where local regulations permit it.

That last point deserves careful planning. Americans generally remain subject to U.S. tax rules on their worldwide income, meaning rental income earned from a foreign property might have U.S. tax implications even if the money remains overseas.

The new starter home isn't always where you live

Traditionally, first-time buyers purchased their primary residence. But high-cost housing markets and increasingly flexible work arrangements can make other strategies possible.

Someone might rent an apartment in New York or Chicago because that's where their career and social life are based while owning a smaller property in Portugal. Another buyer might purchase a vacation property before ever owning a primary residence.

Future retirees could buy the home they eventually hope to live in while they're still working in the United States. Others might simply see an affordable international property as a place to begin building equity while postponing a much more expensive U.S. home purchase.

This approach won't eliminate housing costs back home. If you're renting in the U.S. while owning abroad, you're still responsible for rent in addition to taxes, insurance, maintenance and other expenses associated with the property you own.

Where buyers look for property abroad

Affordability varies considerably from one country, and even one city, to another. Buyers looking overseas should focus on more than a low listing price, considering factors such as accessibility from the U.S., rental potential, ownership rules and whether the location fits their long-term plans.

Here are a few countries where buyers are looking for property abroad and why.

Italy

Italy has drawn attention for inexpensive properties in smaller towns and southern regions, where prices can be considerably lower than in major U.S. cities or popular Italian destinations.

Reuters recently profiled a buyer who purchased a studio apartment in Tropea, a seaside town in southern Italy, for €38,000 (about $44,000). She later began renting the property during the tourist season, giving her an opportunity to generate income from the home when she wasn't using it herself.

Portugal

Portugal has become a popular destination for international buyers, including remote workers and Americans considering retiring in Europe. While prices have risen in sought-after areas, buyers willing to look beyond hot spots such as Lisbon and parts of the Algarve might find more options.

However, don't assume buying a home automatically gives you the right to live in Portugal. The country eliminated real estate purchases as a qualifying investment for new Golden Visa applications in 2023, so prospective buyers need to consider property ownership and residency as two separate issues.

Mexico

For U.S. buyers, one of Mexico's biggest advantages is proximity. Shorter and often less expensive flights can make it easier to visit a property regularly, which might be especially attractive if you're buying a vacation home or rental.

Foreign ownership rules can be more complicated near coastlines and international borders, so keep this in mind.

Panama

Panama has long attracted foreign buyers interested in retirement, rental properties and eventually relocating abroad. Foreigners can generally purchase titled property, although restrictions apply in certain areas, including near international borders.

For someone thinking decades ahead to retirement, purchasing earlier could provide a place to visit now and potentially live in later. Buyers interested in generating income in the meantime should research local rental regulations and demand before purchasing.

What buyers need to understand before purchasing abroad

A $75,000 overseas apartment isn't necessarily comparable to buying a $75,000 property in the United States.

Every country has its own rules governing foreign ownership, property registration, inheritance, taxes and transactions. In some countries, foreigners can purchase property relatively freely. Others impose restrictions based on location, property type or the buyer's residency status.

Here are some other important factors to consider.

• Financing: Buyers accustomed to putting 3% or 5% down on a first U.S. home shouldn't assume they'll find comparable financing overseas. Local lenders might impose larger down payments or stricter requirements on nonresidents, while U.S. mortgage lenders generally aren't going to finance a property located in another country.
• Cashflow: Putting a large portion of your savings into a foreign property could leave you short of cash for emergencies or other financial goals.
• Expenses beyond the sale price: Legal fees, taxes, property registration, insurance, maintenance, travel and currency conversion costs can all affect your return. If you're renting the property, you'll also need to investigate local short-term rental laws and possibly pay a property manager when you aren't there.
• Currency risk: If you're earning dollars but paying property expenses in euros, pesos or another currency, changes in exchange rates can raise or lower your effective ownership costs.
• Taxes (in both countries): U.S. citizens and resident aliens are generally subject to U.S. tax rules on worldwide income, making professional tax guidance particularly valuable for someone earning rental income or eventually selling a foreign property.

Finally, don't confuse property ownership with immigration status. Owning a home might help with certain residency applications in some countries, but buying property does not universally provide a visa, residency rights or citizenship.

Who this strategy suits best

Buying overseas isn't a shortcut everyone priced out of the U.S. housing market should take.

It can make more sense for fully remote workers who have flexibility on where they spend their time, frequent international travelers who already know a particular region well or future retirees who have a clear idea of where they eventually want to live.

It's also potentially better suited to buyers with enough cash to avoid unfavorable international financing while still maintaining adequate emergency savings and funding other financial priorities.

Most important, buyers need to be willing to learn an entirely different real estate system. Reuters notes that financial experts recommend caution and, in some cases, renting in an area before committing to a purchase.

For the right buyer, however, the definition of a starter home might be expanding. Your first property doesn't necessarily need to be a two-bedroom house 20 minutes from your office. It could be a small apartment across the Atlantic or a vacation property you'll eventually retire to.

If owning a home abroad is part of your long-term retirement vision, planning for it now can help turn that idea into a realistic financial goal. Prepare now for the retirement you want.

Use the Bankrate tool below to connect with a vetted financial professional who can help you build a plan for the future you envision:

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Aging in place has its benefits. You can stay in the home you're accustomed to. You're close to friends, family, community, doctors, and caregivers. Plus, you don't have to worry about the headaches and stresses of relocating.

For all those reasons, aging in place is a popular choice for many retirees. How many? According to AARP, 75% of adults aged 50 and older want to remain in their homes and communities as they age.

Remaining in your current home during retirement also presents meaningful financial advantages. Beyond avoiding the considerable expenses associated with a retirement community — which often range from $6,200 to $10,800 per month —there are several less apparent cost savings.

From everyday grocery savings to reduced tax burdens, here are five surprising ways aging in place can protect your nest egg.

(Read our companion story: 5 Unexpected Costs of Aging in Place — Even With No Mortgage)

5 unexpected aging in place savings

1. Cheaper groceries

Eating out can add up, and if you relocate to a retirement community or a new location, you may spend more on meals than if you age in place.

That's because living in a retirement community or assisted living facility usually comes with prepared meals and a set meal plan. Sure, standard meals may be included, but extra meals or guest dining aren't, which can quickly add up. If you live at home, you can cook for yourself, buy food on sale, shop in bulk, and find other ways to save on your groceries.

As for retirees who relocate to a new area, they may spend more money dining out, trying new restaurants in the town as they get a feel for the new neighborhood.

2. Flexible healthcare

Aging in place allows you to control your support costs, saving you serious cash compared to an assisted living facility or nursing home. Instead of paying a steep, flat monthly fee regardless of how much care you actually use, you only pay for what you need. If you require help for a couple of weeks after a fall, you can hire an aide for just that timeframe. If you only need assistance with errands for a few hours a month, you pay solely for those hours.

A non-medical home care aide generally costs $30 to $35 per hour (or $300 to $350 a month) for ten hours of help. Compare that to a full-time facility, which runs $6,200 or more per month, and the savings are substantial. Best of all, the money you aren't spending on a facility can stay invested and continue to grow.

3. Property tax savings

Setting down roots does mean something, even if the younger generations are quick to switch jobs and cut ties. And that loyalty is rewarded for homeowners who stay put in the form of tax breaks that you won't get if you relocate in retirement.

Most states and towns offer some sort of property tax break for residents over the age of 65, whether it's a homestead exemption, senior property tax exemption or a tax freeze. You won't get those immediately if you move to a new home, even if you are over the age of 65. Typically, you must own and live in the property as your primary residence for one to three years before you're eligible.

Staying put means you can collect as much as three years of tax savings, which could amount to hundreds, if not thousands, of dollars in savings.

4. Loyalty and senior discounts

Loyalty pays off, and that's particularly true for retirees who stay put as they age. By remaining in your long-time home, you can get discounts on everything from utility bills to property insurance. Discounts that you might not get if you relocate.

Utility companies tend to offer rate reductions or senior credits to long-term residents, while staying in the same home enables you to keep your policy discounts with your insurer. Staying put also protects you from taking on a brand-new policy at today's inflated market rates. That's good news since homeowner's premiums have jumped nearly 47% nationally over the last five years alone, according to LendingTree.

If you relocate to an area prone to severe weather or natural disasters, like hurricanes in Florida, your homeowners' insurance premiums could soar even higher, wiping out any expected savings from moving.

5. Free support networks

Whether it's close friends, long-time neighbors, or family living nearby, an established support network becomes invaluable as you age, especially if you decide to stop driving. By staying in your home, you can rely on informal favors, like a neighbor driving you to a doctor's appointment or a friend picking up your prescriptions.

If you relocate, a simple trip to the pharmacy or grocery store can easily run $20 or more for a rideshare if you don't have a car or a network of similar help. Relying on private transit services for every errand can quickly add up to hundreds of dollars a month.

Add savings to the list

There is a long list of reasons why people choose to age in place, and saving money isn't typically top of mind. But it is a major added perk, one retirees can comfortably add to their list.

After all, whether it's groceries, home maintenance, insurance, property taxes or support, aging in place offers real savings that go far beyond just avoiding the steep costs of an assisted living facility.

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Aging in place is a popular choice for retirees for good reason. Home is where you raised a family, built a life, and rooted yourself in community, and if your mortgage is paid off, you've eliminated one of retirement's biggest expenses.

However, housing costs go far beyond a mortgage and property taxes. If you aren't prepared, these five hidden costs of aging in place can easily throw your retirement budget off course.

(Read our companion story: 5 Surprising Ways Aging in Place Can Save You Thousands in Retirement).

Five hidden costs of aging in place

1. Home modifications

Aging in place might be as easy as relocating to a main-floor guest room, or it could require a complete architectural overhaul. Before committing, make sure your home is suitable for aging in place, and if it's not, that you can afford the necessary upgrades.

Major modifications such as walk-in showers, wheelchair ramps and widened doorways can range from $2,500 to more than $20,000, and Medicare won't cover them. The last thing you want is to find out after retiring that your hallways can't accommodate a wheelchair.

If you aren't sure whether your home is age-in-place ready, take our quick quiz here. Before you decide, ask yourself these three questions first.

2. Chore tax

Mowing the lawn, cleaning the house, tending to the pool and otherwise maintaining the house might seem easy in the early years of retirement, but as you get older, you might not be up for all that physical labor. Hiring someone for home maintenance comes at a cost that can add up.

On average, basic lawn maintenance costs $100 to $500 per month, while pool service ranges from $100 to $350 monthly. House cleaning typically costs $120 to $240 per visit, depending on your home's size.

3. Aging home appliances

From the ,boiler to the refrigerator, if you're aging in place, chances are, your appliances are too. They might be healthy now, but as they get older, they could fall into disrepair and need replacing, which could set you back some serious cash. Homeowners' insurance won't cover a crack in your oil tank or a refrigerator that suddenly stops working.

How much will you be on the hook for if you have to replace an old oil tank? It could be anywhere from $400 to $6,000, according to Angi. Meanwhile, the average cost to replace an HVAC system is $7,500, based on unit type and home size.

4. Transportation costs

If your home is in the suburbs and you lose the ability to drive, getting around can get expensive. That's particularly true if public transportation is inaccessible in your neighborhood or if you don't have a support network that can shuttle you to and from appointments.

Taking a rideshare or taxi to a doctor's appointment, the grocery store or to visit friends and family can quickly add up. Spending $20 to $40 per trip, or $300 or more per month just to run errands or get to appointments, will eat into your budget fast.

5. Rising homeowners' insurance costs

Even if your mortgage is paid off and homeowner's insurance is no longer required, going without it means you're personally on the hook for any damage. That's why most mortgage-free homeowners keep their policies.

If you plan to age in place with peace of mind, be prepared for rising insurance costs. That is especially true in states such as Colorado, Minnesota and Iowa, which saw double-digit premium hikes in recent years. Nationwide, average rates jumped 6% in 2025 alone

Crunch the numbers

Aging in place is the goal for many retirees, and for good reason — your home holds your memories, routine and community. But before committing to stay long-term, take an honest look at what it will take to keep your house safe, functional and comfortable.

Running the numbers on these hidden expenses today will help ensure your forever home stays a place of comfort — and doesn't become a financial trap later.

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Credit card debt can quickly become overwhelming, especially when high interest rates make it difficult to reduce your balance even as you make payments. While Experian reports that the average credit card interest rate is 19.35% as of July, rates can reach nearly 30%. If you're only making minimum payments, it can be difficult to keep up.

Your home's equity may offer a way to manage that debt. By borrowing against your home equity, you may be able to pay down or eliminate your credit card balance and potentially reduce the amount you're paying in interest. But using an option such as a home equity line of credit (HELOC) also puts your home on the line.

If you're struggling with credit card debt but have equity in your home, you have options. Before you tap your home equity, make sure you understand how each option works and the risks involved.

When using home equity to pay off debt makes sense

Using home equity to pay off credit card debt can make sense in certain situations. If you have credit card debt with an APR of 20% or higher, for example, a HELOC or home equity loan may offer a lower interest rate and reduce the amount of interest you pay.

But interest rates aren't the only factor to consider. If you can't make the payments on a HELOC or home equity loan, you could potentially lose your home. Before borrowing, make sure the payments comfortably fit your budget and you have a clear plan for paying off the debt.

You'll also need enough home equity to qualify. Many lenders limit how much of your home's value you can borrow against, often requiring you to retain a certain amount of equity in the property.

For example, say your home is worth $400,000 and you owe $250,000 on your mortgage. That gives you $150,000 in equity. If your lender requires you to maintain 20% equity, or $80,000, you may be able to borrow up to $70,000 of your available equity, depending on the lender's requirements and your qualifications.

Compare your options before borrowing

There are several ways to pay down credit card debt, including options that let you borrow against your home equity. Each comes with different costs, requirements and risks, so it's important to compare them before deciding which approach is right for you.

Both a HELOC and a home equity loan use your home as collateral. With a HELOC, you can borrow from a revolving line of credit as needed, up to your approved limit. A home equity loan, on the other hand, provides a lump sum that you repay over a set period.

The biggest downside: You're putting your home on the line

HELOCs and home equity loans are forms of secured debt and typically have lower interest rates than credit cards. But that lower rate comes with a significant risk: Your home serves as collateral. If you fall behind on payments, you could face foreclosure and potentially lose your home.

Even if you have a solid repayment plan, consider how an unexpected job loss, medical bill or other major expense could affect your ability to make payments. HELOCs come with another consideration: They typically have variable interest rates, meaning your rate and monthly payment could increase over time.

Using a HELOC or home equity loan also doesn't address the reason you accumulated credit card debt in the first place. Before taking on new debt to pay off your credit cards, consider what led to the balances and whether you've addressed the underlying issue.

Questions to ask before using your equity

If you're on the fence about using your home equity, these questions may help you decide:

• Can I realistically pay this off? Make sure the monthly HELOC or home equity loan payment comfortably fits into your budget, with room for other expenses.
• Will my monthly payment decrease? Depending on your credit card balance and interest rate, switching to a HELOC or home equity loan may result in only a small reduction in your monthly payment, or none at all.
• Am I solving a temporary problem or creating a bigger one? Consider what caused you to accumulate credit card debt and whether you've addressed that issue before taking on new debt to pay it off.
• Is my income stable? Consider whether you could continue making payments if your income dropped or you unexpectedly lost your job.
• Do I have an emergency fund? Ideally, have enough savings to cover three to six months of living expenses so an unexpected expense doesn't interfere with your debt repayment plan.

Alternatives that may be safer

Using home equity isn't right for everyone, and there are several alternative options that may be safer:

• Debt consolidation loan: A debt consolidation loan lets you combine multiple debts into a single loan with one monthly payment. If you qualify for a lower interest rate than you're currently paying, you could also save money on interest. Compare rates, fees and repayment terms before applying.
• Balance transfer credit card: A balance transfer card may offer a 0% introductory APR for a limited time, allowing you to pay down your balance without accumulating additional interest during that period. Most cards charge a balance transfer fee, and any remaining balance may be subject to a much higher APR once the promotional period ends.
• Debt avalanche method: If you have multiple debts, the debt avalanche method can help minimize interest costs. Make the minimum required payment on each debt, then put extra money toward the debt with the highest interest rate. Once that's paid off, move on to the debt with the next-highest rate.
• Credit counseling: A nonprofit credit counseling agency can help you review your finances, create a budget and develop a plan for paying down debt. Depending on your situation, a counselor may also discuss whether a debt management plan is appropriate.
• Budget adjustments: Look for expenses you can temporarily reduce and redirect that money toward your credit card balance. Even smaller cuts to discretionary spending, such as dining out or entertainment, can give you more money to put toward debt each month.

Your home equity can be a valuable financial tool, but it isn't free money. Borrowing against it means taking on new debt and putting your home at risk if you can't make the payments.

Before using home equity to pay off credit card debt, consider what led to the debt and whether you have a realistic plan for repaying what you borrow. A lower interest rate can save you money, but only if you can comfortably manage the new debt without putting your home at unnecessary risk.

If you’re considering tapping your home equity, refinancing may be another option worth comparing to see how today’s rates and offers could affect your monthly costs.

Use the Bankrate tool below to compare today's top refinance offers:

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For millions of Americans living in neighborhoods governed by homeowners associations (HOAs), disputes over fines, liens and foreclosure have become an increasingly common source of frustration. Georgia is now taking a different approach.

A new law will require many HOAs to register annually with the state and provide financial information before they can collect fines, place liens on homes or pursue foreclosure. The legislation gives the state new oversight powers and adds protections designed to increase transparency and accountability.

While Georgia is one of the first states to adopt this type of registration system, housing experts say it reflects a broader trend as lawmakers across the country take a closer look at how HOAs operate and the authority they have over homeowners.

Georgia's new HOA registration requirements

Georgia's Property Owners' Bill of Rights Act (SB 406) creates a new state registration system for homeowners associations overseen by the Georgia Secretary of State. The law was signed by Gov. Brian Kemp on May 12, 2026.

Beginning January 1, 2027, qualifying HOAs must register with the state each year to maintain certain enforcement powers. As part of the registration process, associations must submit information including:

• The HOA's name, address and officers
• A copy of its governing documents
• A financial statement dated within one year of filing
• Other information required by the Secretary of State as regulations are finalized

The registration requirement generally applies to residential property owners associations, including many neighborhood HOAs, condominium associations and other common-interest communities.

The law has two major implementation dates. Some foreclosure-related provisions took effect on July 1, 2026, while the registration requirements and many homeowner protections become effective January 1, 2027.

What happens if an HOA doesn't register?

The biggest consequence is that an unregistered HOA loses some of its most significant enforcement tools.

Under the new law, an association that fails to maintain its registration generally cannot:

• Collect fines or certain fees
• File or record liens against homeowners
• Initiate foreclosure proceedings
• Use certain collection actions tied to those enforcement powers

The Secretary of State also gains authority to deny, suspend or revoke an HOA's registration under certain circumstances and investigate complaints from homeowners after the law takes effect.

For homeowners, that creates a new layer of oversight that previously didn't exist.

Why lawmakers said reform was necessary

Georgia lawmakers introduced the legislation after years of complaints from homeowners who said they had little recourse when disputes with their HOA escalated.

Common concerns included:

• Limited financial transparency
• Disputes over fines and assessments
• Collection practices
• The possibility of foreclosure over relatively small unpaid amounts
• Few state-level options for resolving complaints

The law also raises the threshold before an HOA can pursue foreclosure for unpaid assessments. Beginning in 2027, the minimum delinquency generally increases to $4,000 (or 12 months of regular assessments, subject to statutory minimums), and fines generally cannot be counted toward that foreclosure threshold.

Additional notice requirements also give homeowners more time before foreclosure proceedings can begin.

Supporters say the changes strike a better balance between allowing HOAs to collect legitimate assessments while reducing the risk that homeowners could lose their property over relatively minor disputes.

Could other states follow Georgia's lead?

Georgia's registration system is unusual, but it fits within a broader national movement toward greater HOA oversight.

In recent years, several states have adopted or expanded homeowner protections by requiring greater transparency, strengthening due-process protections before fines are imposed, limiting foreclosure authority or increasing disclosure requirements.

States including Colorado and Florida have enacted reforms affecting how HOAs issue fines, conduct hearings and enforce community rules. Mandatory annual registration with state oversight remains relatively uncommon, however.

Whether other states adopt a system similar to Georgia's will likely depend on local political priorities and the volume of homeowner complaints. As more Americans live in HOA-governed communities, lawmakers are increasingly examining questions such as:

• How much financial information associations should disclose
• Whether homeowners have adequate appeal rights
• When liens and foreclosures should be permitted
• What level of state oversight is appropriate

Why this matters for homeowners

Even if you don't live in Georgia, the new law is worth watching.

According to industry estimates, tens of millions of Americans live in communities governed by HOAs, and the number continues to grow. As those communities expand, so do questions about transparency, governance and homeowner rights.

Georgia's law signals that some states are willing to place additional accountability requirements on homeowners associations rather than leaving oversight almost entirely to private governing documents.

For homeowners, it’s important to stay informed about changes to HOA laws in your own state. While mandatory registration requirements remain rare today, Georgia's approach could become a model for future legislation as more states explore ways to improve transparency, financial accountability and consumer protections for residents living in HOA communities.

When did you last review your homeowners insurance?

As home values and rebuilding costs change, your insurance needs can change, too. Comparing homeowners insurance options can help you make sure you have the right coverage at a competitive price.

Use the Bankrate tool below to get quotes and compare some of today's top offers:

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In the past three to four decades, many successful real estate developers, sponsors, syndicators and operators have built substantial portfolios of commercial real estate using high-net-worth investor capital.

Through careful acquisitions, development expertise, market appreciation and operational oversight, these sponsors have amassed portfolios worth tens or even hundreds of millions of dollars.

While this success story is one that many real estate entrepreneurs aspire to achieve, it often creates an entirely new set of challenges later in life.

Ironically, some of the industry's most successful real estate developers, syndicators and operators eventually find themselves facing one of the most difficult decisions of their careers: How to transition out of highly appreciated real estate without creating significant tax consequences for themselves and their investors.

The hidden challenge of success

For many sponsors, years of success have resulted in a substantial portion of both their personal net worth and their investors' net worth becoming concentrated in a relatively small number of assets. What began as a strategy for creating wealth can eventually become a concentration risk.

A real estate developer might find that the majority of their wealth is tied up in a handful of apartment communities, retail centers, industrial properties, hotels or other commercial real estate assets.

Likewise, many of their investors could have significant portions of their investment portfolios tied to the same properties.

This creates a dilemma. On one hand, the assets have performed extremely well and continue to generate income. On the other, the sponsor and investors might have become heavily concentrated in a single asset class, geographic region or investment strategy.

It's not an easy solution

The obvious solution might seem simple: Sell the properties and diversify. Unfortunately, it's rarely that easy.

Many assets have appreciated substantially over decades of ownership. In addition, years of depreciation deductions have created significant depreciation recapture liabilities.

For many real estate developers and their investors, an outright sale could trigger capital gains taxes and depreciation recapture taxes that — depending on their tax situation and state of residence — could consume 30% to 40% or more of their equity proceeds.

Faced with that reality, many sponsors begin considering a 1031 exchange. However, this exchange often introduces another challenge.

The aging real estate developer problem

When these properties were originally acquired, the sponsor might have been in their 30s or 40s. Today, many of these same sponsors are in their 60s, 70s or beyond.

The question becomes: Do they really want to continue operating, managing and overseeing large real estate portfolios for another decade or two?

Many no longer desire the day-to-day responsibilities that come with active real estate ownership. Leasing, property management oversight, lender negotiations, capital projects, tenant issues and operational challenges can become increasingly burdensome.

At the same time, selling and paying the taxes might not be an attractive option.

As a result, many sponsors find themselves caught between two undesirable outcomes:

• Continue owning and managing increasingly demanding assets
• Sell and incur substantial tax liabilities

The capital expenditure challenge

Adding to the complexity, many long-held assets eventually require significant capital expenditures — roofs must be replaced, parking lots resurfaced, mechanical systems upgraded, interiors renovated and brand standards maintained.

For aging sponsors, writing large capital expenditure checks while simultaneously managing complex projects can become increasingly less appealing. The assets that once generated wealth might now require substantial reinvestment simply to maintain competitiveness.

A real-world case study

Kay Properties, where I am the CEO, recently worked with a large real estate operator facing this situation. Over several decades, this client had successfully developed and acquired a portfolio of about 20 hotels throughout the Midwest.

The portfolio had been built using high-net-worth investor capital and had generated significant wealth for both the sponsor and his investors.

However, time had changed the equation. The sponsor was well advanced in age, and many of his investors were also nearing retirement or already retired. The portfolio had appreciated significantly, making an outright sale highly unattractive due to the substantial capital gains and depreciation recapture taxes that would result.

At the same time, another major issue was looming. The hotels were approaching the point at which they would need to complete property improvement plans (PIPs) to maintain their national hotel brands and flags.

Depending on the property, these PIPs were estimated to cost from $1 million to $4 million per hotel. Across about 20 hotels, the required capital infusion represented an enormous financial commitment.

The sponsor ultimately tasked his CFO with identifying a solution that would address the following challenges:

• Avoid a substantial tax burden
• Reduce concentration risk
• Eliminate the need for active management
• Address aging ownership concerns
• Avoid massive upcoming capital expenditure requirements
• Continue generating potential income for investors

Exploring the options

After extensive discussions with the Kay Properties team, along with the sponsor's CFO and legal counsel, the group determined that selling the portfolio to a large institutional buyer and completing a 1031 exchange into a diversified portfolio of Delaware statutory trust (DST) investments offered a compelling solution.

Following the sale, about $65 million of 1031 exchange equity was exchanged into a portfolio of roughly 30 different DST investments sourced from multiple DST sponsor companies.

Rather than remaining concentrated in one asset class — hotels — the sponsor and investors were able to diversify across multiple property sectors, including:

• Multifamily apartments
• Industrial properties
• Medical real estate
• Retail properties
• Student housing
• Other institutional-quality commercial real estate assets

The result was exposure to thousands of underlying units and properties across numerous markets and asset classes.

Solving multiple problems with one strategy

This DST investment strategy addressed several major concerns simultaneously.

First, it significantly reduced concentration risk by moving from a portfolio concentrated entirely in hotels in a limited geographic area to a broadly diversified portfolio spanning multiple property sectors.

Second, it allowed the sponsor and investors to defer a very large amount of capital gains taxes and depreciation recapture through the 1031 exchange process.

Third, it eliminated the burden of active property management that the developer had borne for many years. As passive owners in DST structures, the developer no longer had responsibility for day-to-day operations, leasing, maintenance oversight or capital project management — those responsibilities now rested with the DST sponsor companies.

Fourth, it addressed the looming capital expenditure requirements associated with the hotel portfolio's Property Improvement Plans.

Finally, the DST portfolio provided the potential for ongoing monthly cash flow distributions from a diversified collection of institutional-quality real estate assets.

The bigger picture

As the real estate industry continues to mature, more real estate developers are likely to face this same exit strategy conundrum.

The challenge is not simply about selling assets. It's about balancing taxes, diversification, legacy planning, investor relationships, operational responsibilities and lifestyle considerations.

For many aging real estate developers and their investors, the question is no longer how to build wealth through real estate, but how to preserve that wealth, diversify it, simplify ownership and transition into the next chapter of life without unnecessarily sacrificing a significant portion of their equity to taxes.

While every situation is unique and requires careful legal and tax analysis, DST investments have emerged as a viable solution that could help address these competing objectives for certain larger investors pursuing a 1031 exchange strategy.

To view available DST investments through Kay Properties and access due diligence materials on current DST properties, investors can register at www.kpi1031.com. The Kay Properties marketplace is unique in that there are typically 25 or more DST sponsor companies with between 25 and 50 different specific DST investments posted on the platform at any given time.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

If a sweltering summer has you longing for a place with four vibrant, distinct seasons, Ohio may be calling.

While many know the Buckeye State for its sprawling farmland and thriving sports culture, Ohio is also a Midwest powerhouse for expanding tech, healthcare, and advanced manufacturing sectors, according to economic development data.

And in addition to job opportunities, the state offers a lower cost of living for major expenses like housing, and average prices on everyday items like groceries and utilities.

Best of all, Ohio lets you keep more of your hard-earned money thanks to a friendly 2.75% flat income tax rate, state tax-free Social Security income, and zero estate or inheritance taxes for your heirs.

So if you're ready to enjoy four true seasons without breaking the bank, here are the ten cheapest places to live in Ohio.

Cheapest places to live in Ohio

After ranking property tax bills from highest to lowest per county in Ohio, one thing’s for sure: Rural areas win out. You can generally find more affordable living in the countryside than in the hustle and bustle of, say, Columbus or Cleveland.

If you’re game to explore rolling hills, state parks, and local history (and maybe want to commute for other enjoyments), check out these cheap places to live in Ohio.

Note: Kiplinger used the latest data presented by the Tax Foundation (sourced from the U.S. Census Bureau) to find the cheapest counties to live in Ohio.

Jackson County

Median property tax bill: $1,363

Median home price: $150,700

Homes are relatively affordable in Jackson County, with the median sitting right around $150,000. Property tax bills are similarly budget-friendly, averaging roughly $1,363 per year according to the latest data from the Tax Foundation.

Located about 90 minutes southeast of Columbus, Jackson County is deeply rooted in rich Appalachian foothill heritage and historic mining tradition.

Outdoor enthusiasts can hike scenic, cliff-lined forest trails at Lake Katharine State Nature Preserve, enjoy peaceful boating and fishing at Jackson Lake State Park, or browse rural bakeries, blacksmith shops, and greenhouses operated by the local Amish community.

Plus, every fall, the region hosts the famous Jackson County Apple Festival. Spanning nearly a week, this event fills downtown Jackson with parades, carnival rides, marching bands, and of course, tons of local craft and apple vendors. Residents partake of fresh-picked apples, hot cider slushies, and homemade apple butter cooked in traditional copper kettles.

Searching for a welcoming, down-home atmosphere paired with a remarkably low property tax bill? Check out Jackson County, Ohio for a classic slice of Midwest pie.

Adams County

Median property tax bill: $1,356

Median home price: $164,200

Nestled along the banks of the Ohio River, Adams County carries the highest median home price on our list, hovering around $164,200. However, despite higher home values, the median annual property tax bill remains remarkably low at just $1,356.

Geographically, Adams County is characterized by its rolling wooded hills, sweeping prairie patches, and dramatic limestone gorges. Nature lovers may spend countless hours hiking through the gigantic Edge of Appalachia Preserve or birdwatching along the river.

Much like Jackson County, Adams is also home to a thriving Amish community. Visitors can stop by bakeries, quilt shops, and hand-built furniture stores. The area also exudes a nostalgic, old-school Americana vibe, featuring a timeless local diner and historic shops like Blake Pharmacy in West Union.

Come to Adams County, Ohio, for the surprisingly low property tax bill, but stay for the quiet, down-home lifestyle and breathtaking natural scenery.

Pike County

Median property tax bill: $1,355

Median home price: $163,800

Pike has the second-highest median home price on our list, sitting just under $164,000. But property taxes are only $1,355, according to U.S. Census Bureau data, making the county the 8th-cheapest place on our list.

If you're seeking a lively mix of outdoor adventure and classic Midwest festival culture, Pike might just have you covered. Water sports enthusiasts can go boating, water skiing, and tubing on Lake White State Park. Or, for something a little quieter, there's paddling, fishing, and disc golfing at nearby Pike Lake State Park.

Families can head to Long's Retreat Family Resort in Latham for a full day of go-karting, mini-golf, and swimming at the splash pad.

And the excitement continues into summer and fall with the annual Pike County Fair, including tractor pulls and demolition derbies, in addition to a live bluegrass festival. Plus, for a unique trip back in time, history buffs can explore Dogwood Pass — a living-history Old West town complete with an authentic saloon, jail, chapel, and live stunt shows.

If you want affordable housing, inland lakes, and plenty of weekend entertainment, Pike County, Ohio might make a compelling destination for your family.

Harrison County

Median property tax bill: $1,279

Median home price: $121,500

Harrison County home prices are among the most accessible in the Buckeye State, with the median home value sitting around $121,500. Annual property tax bills are similarly budget-friendly, averaging roughly $1,279 according to data from the Tax Foundation — cheaper than many neighboring Eastern Ohio counties.

Love the water? Harris is famous for its "Big Three Lakes" — Tappan Lake, Clendening Lake, and Piedmont Lake. Together, these reservoirs offer more than 4,200 acres of open water for kayaking, boating, and fishing.

The lakes are flanked by over 15,000 acres of public parklands and picturesque campgrounds, which means outdoorsmen can also explore more than 40 miles of the famous Buckeye Trail, alongside 20,000 acres of public hunting grounds.

But if you're not outdoorsy, no worry; the county seat of Cadiz adds a touch of classic Hollywood history to the rural landscape. As the birthplace of Clark Gable, the "Gone with the Wind" actor often dubbed the "King of Hollywood," Cadiz hosts an annual birthday celebration and features a dedicated museum filled with Gable memorabilia.

Afterward, residents can unwind with a tasting at one of the area's scenic countryside wineries.

Stop by Harrison County for a weekend on the lake or a tour of local Hollywood history — and linger for the substantial property tax savings.

Morgan County

Median property tax bill: $1,268

Median home price: $150,900

Morgan County highlights a median home price tag of only $150,900. The median property tax bill is also pretty low, sitting around $1,268, per the latest data from the U.S. Census Bureau.

Tucked into the foothills of the Appalachian Mountains in southeastern Ohio, Morgan is nicknamed "The Front Porch of the Great Outdoors" by county officials.

The area is famous for the Muskingum River Parkway, home to a historic series of hand-operated river locks — one of the last remaining functional systems of its kind in the nation.

Residents can spend peaceful weekends navigating the river, driving quaint backroads past covered bridges, or hiking and kayaking through nearby Burr Oak State Park and the expansive Jesse Owens State Park.

The county is also anchored by historic villages like McConnelsville, where brick-lined streets have 19th-century architecture, local diners, and independent shops. Between its tranquil riverfront views and tight-knit small towns, Morgan County delivers a timeless rural vibe.

Ergo, whether you're in the market for a slower pace of life or quite low-cost home options, Morgan County could be your next destination.

Jefferson County

Median property tax bill: $1,257

Median home price: $127,800

Jefferson County home prices are pretty low compared to others on this list, at around $127,800. Property taxes are also relatively cheap, as the median bill is only $1,257, according to 2026 Tax Foundation data.

Situated along the Ohio River in eastern Ohio, Jefferson is known as the birthplace of famous entertainer Dean Martin.

Today, the county is a lively hub of outdoor recreation and riverfront living. Friendship Park in Smithfield spans 1,320 acres and includes camping, mountain biking, horseback riding, and a spacious 80-acre lake ideal for fishing and boating.

When winter arrives, the county seat of Steubenville transforms into a holiday destination featuring the region's famous Nutcracker Village. Over 200 life-sized handcrafted nutcrackers line the historic downtown streets along with nativity displays, festive hayrides, an open-air Advent Market, and light shows at Historic Fort Steuben.

For a delightful blend of historic charm, outdoor parklands, and winter festivities, Jefferson County offers a rich quality of life combined with a low property tax bill.

Meigs County

Median property tax bill: $1,238

Median home price: $119,300

Meigs is only a few dollars cheaper than Jefferson in terms of annual property taxes, with a median bill of roughly $1,238. However, the county has the lowest median home price on the list, at just over $119,000. This might be due to Meigs's quiet, rural footprint of approximately 21,600 residents, per the U.S. Census Bureau.

Don't let the uncrowded area fool you, though — there's still plenty to do in this scenic corner of Ohio. Meigs has 57 miles of Ohio River shoreline alongside the 102-acre lake at Forked Run State Park. The historic river village of Pomeroy sits in a narrow strip between the river and wooded bluffs, creating a "stacked" architectural look of houses climbing into the hillside.

Downtown Pomeroy is lined with weathered 19th-century storefronts, local dining spots, and riverfront shops. Music lovers flock to the area each summer for the Big Bend Blues Bash on the riverbank, and history lovers can dive deep into Ohio's rich Civil War heritage at the Buffington Island Battlefield Memorial Park.

Leave the heavy mortgage and property tax bills behind and discover a charming, slower-paced way of living in Meigs County, Ohio.

Lawrence County

Median property tax bill: $1,215

Median home price: $144,000

Lawrence County property taxes are relatively inexpensive, as the annual median bill reaches barely above $1,200. Median home prices can also be cheap, at around $144,000, per the latest Tax Foundation data.

Bordering both Kentucky and West Virginia, Lawrence County is imbued with river history and Appalachian heritage. The county seat of Ironton played a major role in the 19th-century iron industry and is famously home to the Ironton-Lawrence County Memorial Day Parade — recognized as the longest-running Memorial Day parade in the nation, celebrating every year since 1868.

Active families also find plenty of recreation throughout the county. You can go camping, hiking, and ATV riding across the trails of Wayne National Forest. And while Lake Vesuvius is temporarily closed for paddling and swimming due to dam repairs, it's expected to reopen in September 2027.

But if you want to check out the local history, the Lawrence County Museum displays exhibits on iron furnaces, Victorian-era antiques, and artifacts from the 1920s Ironton Tanks, an early pro-football team that defeated both the Chicago Bears and New York Giants before the modern NFL era.

For budget-friendly family fun and rich sports history, you might consider putting down roots in Lawrence County, Ohio.

Noble County

Median property tax bill: $1,180

Median home price: $163,600

As the second-most affordable place to live on our list, Noble County, Ohio, boasts a median home price of just $163,600. Paired with a modest median property tax bill of $1,180 according to U.S. Census Bureau data, Noble's property taxes are lower than those in most neighboring counties.

Defined by lush, undulating hills, winding roads, and quiet farmland, Noble County is a dream for anyone seeking a peaceful rural retreat. Residents can head to Wolf Run State Park for a relaxing afternoon of fishing, swimming, or hiking along tree-lined lake trails. Or, residents can head to conservation parks to spot rare local species like the northern harrier.

Additionally, Noble is nearby The Wilds — one of the largest wildlife conservation centers in North America. Spanning about 10,000 acres, this safari park lets visitors view rhinos, giraffes, and wild horses roaming free.

Come to Noble for sweeping natural landscapes and exotic wildlife, and stay to enjoy the low property taxes.

Monroe County

Median property tax bill: $1,176

Median home price: $142,700

Monroe County is the cheapest place to live in Ohio. Homebuyers may secure a median property tax bill of just $1,176 and a relatively accessible median home price of around $142,700, according to 2026 data from the Tax Foundation.

Widely known as the "Switzerland of Ohio," Monroe has dramatic topography with steep hills and deep river valleys that somewhat resemble European mountain terrain. Rooted in the heritage of early Swiss immigrants, this spacious destination is an ideal spot for outdoor adventure — from motorcycle rides along the ridges to kayaking down Sunfish Creek.

And for art aficionados and road-trippers alike, the county offers the Monroe County Quilt Barn Tour. Residents can take the backroads to discover 20 century-old wooden barns showcasing hand-painted quilt blocks by local artist Scott Hagan, nationally known as "The Barn Artist."

So if you're looking for rugged Appalachian ridges and hand-painted barn quilts — you might say "yes" to the cheapest place to live in Ohio.

More Cheap Places

• 10 Cheapest Places to Live in Florida
• 10 Cheapest Places to Live in North Carolina
• 10 Cheapest Places to Live in Tennessee
• 10 Cheapest Places to Live in Texas

Many 1031 investors — especially those who are nearing retirement — don't understand the full breadth of replacement options available to them.

Most of them are in a similar spot: They own a rental or a small commercial building, and they're worn out from the day-to-day management. They're ready to sip piña coladas on the beach, not answer phone calls or text messages about how the plumbing stopped working or what the pet fee will be if their tenant gets a fourth cat.

In 2024, 38% of landlords said property upkeep is one of their biggest issues, and in 2026, a survey of 4,055 independent landlords showed that ownership costs rose for 74.4% of them.

That paints a clear picture of collective landlord psychology: They're sick of maintenance, and to make matters worse, prices keep rising.

Since the 1031 exchange is such a good option for deferring taxes, most landlords are heavily incentivized to keep the money working for them in real estate (and that's especially true for retirees who are investing for cash flow).

So, what are their options? Most investors think there are only two:

• Go passive through a Delaware statutory trust (DST)
• Stay in control by buying another building and doing the work all over again

Completely passive with lower returns or potentially stroke-inducing total control?

In reality, this is a false dichotomy.

The actual range of options is much wider.

Once you sell, you have 45 days to formally identify a replacement property and 180 days to close. That window is short — and the IRS is not lenient at all about missing deadlines, so let's get started.

The full range of options, from most work to least

Another active property. This is the default option. And, frankly, for some sophisticated investors who have the time and patience for it, it's the right answer.

You trade into another rental, a multitenant building or a value-add project, and you keep full control along with full responsibility:

• Tenants
• Repairs
• Vacancies
• Taxes
• Insurance

If the reason for the exchange was the work itself, this puts you back where you started, usually with a larger asset. Not ideal for someone nearing retirement.

Tenancy in common (TIC). A TIC lets several investors hold direct, fractional title to a single property. You keep the standing of a direct owner, which is more control than a fractional trust interest gives you, but decisions generally require coordination among the other owners, and financing is more complicated because the lender underwrites the group.

It sits in the middle, and it has become less common than it once was.

A Delaware statutory trust. With a DST, you buy a fractional beneficial interest in a professionally managed, institutional-grade asset, and a sponsor runs everything.

The appeal is convenience: A DST can close in three to five business days, minimums are low, and you can spread proceeds across several of them for diversification.

Those are meaningful advantages when the 45-day clock is tight or the remaining balance to place is small.

The trade-off, of course, is control.

In order to qualify for a 1031, a DST has to follow a set of IRS rules (often called the seven deadly sins): Among them, the trust:

• Cannot take on new financing
• Cannot sign new leases
• Cannot make major capital improvements
• Cannot reinvest sale proceeds

Investors get no vote on when the property sells, and because proceeds cannot be redeployed inside the trust, the sponsor's exit sets the timing of your next exchange.

Fees are the other consideration, since front-end fees on DST offerings commonly run 10% to 15% and are disclosed inside a lengthy private placement memorandum.

For frustrated, burnt-out landlords, that seems like it's an easy trade … but it's not the only option available to you if you want to move from being fully active to being mostly passive.

The lesser-known middle-ground options

Single tenant NNN (triple net). While this is still technically 100% ownership, it stands out because it shifts the maintenance responsibilities onto the tenant. With a NNN property, you hold title outright and lease the building to a single tenant, usually on a long 10- to 15-plus-year lease, and the tenant pays the three nets:

• Property taxes
• Insurance
• Maintenance

You keep control (the hold, the sale and the timing of your own exchange), and the operating burden shifts to the tenant, so your responsibilities as owner are low.

The pricing behaves a lot like fixed income: Single tenant net lease assets traded around a 6.80% cap rate as of the first quarter of 2026, and the yield tracks the tenant's credit and the remaining lease term more than the building itself.

Absolute NNN. This is a triple net lease taken to its furthest point. The short version: The tenant carries everything, including the roof and structure, which is not always true of all NNN leases.

A REIT. Worth naming mostly to correct a common assumption: You cannot complete a 1031 exchange directly into REIT shares, because a share of a trust is not like-kind to real property.

There is an indirect path called an UPREIT (a DST interest can later be contributed to a REIT operating partnership through a Section 721 exchange), but that is effectively a one-way door out of 1031 treatment, since you generally cannot exchange out again afterward.

There are also plenty of hidden risks associated with this strategy.

Weighing your options: Two questions to answer

In evaluating these options, you need to answer two questions:

• How much control do you want to keep?
• How much of the work are you willing to do yourself?

A DST gives up control almost entirely in exchange for simplicity, which suits an investor who just wants it all to be over with.

A single tenant absolute NNN property keeps title, control and exchange timing in your hands while keeping the work low, which suits an investor who was tired of the job rather than tired of owning. Another active building keeps everything: Control and work alike.

Each is a legitimate answer to a different set of priorities.

Whatever you land on, three habits pay off early: Match the structure to whichever of those priorities is most important to you, read the underlying documents (the lease on a net lease deal, the private placement memorandum on a trust) and make sure to cross your t's and dot your i's. The 45-day clock rewards the investors who have thought it through before they sell.

Related Content

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• A Cautionary Tale: Why Older Adults Should Think Twice About Being Landlords
• Counting on Real Estate to Fund Your Retirement? Avoid These 3 Costly Mistakes
• Should I Sell or Rent My House When I Relocate for Retirement?
• Do 1031 Exchanges Make Sense for Baby Boomers?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

As more people in the U.S. remain in their homes as they grow older ("age in place"), the cost of making a home safer and more accessible can be a significant hurdle.

A new proposal in Congress would ease that burden by creating a federal tax credit for older homeowners who invest in accessibility upgrades.

The Senior Accessible Housing Tax Credit Act of 2026 would provide a credit of up to $10,000 for taxpayers age 60 and older who make qualifying improvements to help them remain safely and independently in their homes.

The legislation addresses a gap for older adults because Medicare generally doesn't cover structural home modifications, like installing wheelchair ramps, widening doorways, or remodeling bathrooms for accessibility. As a result, many homeowners must pay those often substantial costs out of pocket.

Here's more to know.

New $10,000 home tax credit for older adults?

The Senior Accessible Housing Tax Credit Act of 2026, recently introduced by Sens. Angela Alsobrooks (D-Md.) and Kirsten Gillibrand (D-N.Y.), would create a federal tax credit of up to $10,000 for taxpayers age 60 and older who make qualifying accessibility improvements to their homes.

"This critical legislation allows for seniors to stay in their homes — for many that means homes they love and have been in for decades —and install essential, aging-related modifications," Sen. Alsobrooks stated in a release announcing the proposal.

Sen. Gillibrand, top Democrat on the U.S. Senate Committee on Aging, added that "a safe, accessible place for seniors to live should be a right, not a privilege."

The measure, which has received support from the National Association of Realtors, also has companion legislation in the House, introduced by Democratic Rep. George Latimer of New York. According to the bill's sponsors:

• If enacted, the bill would create a nonrefundable tax credit for eligible taxpayers age 60 or older for expenses related to certain home modifications on their principal residence or a qualifying second home
• The credit would be equal to the cost of eligible expenditures, with an annual limit of $10,000
• Qualifying expenditures would also include certain labor costs related to the preparation, assembly, or installation of an eligible modification

What kind of projects are lawmakers talking about? Installing wheelchair ramps, grab bars, non-slip flooring, bathtub cuts or shower seats, furniture risers or chair lifts, or widening doorways would generally qualify under the proposal.

Replacement of toilets and bathroom vanities and kitchen or bathroom faucets are also mentioned in the bill. However, a general remodeling project, like a kitchen renovation designed primarily for appearance, likely wouldn't qualify.

Aging in place home modifications

The proposal comes as more older adults in the United States look for ways to remain in their homes. According to AARP's 2024 Home and Community Preferences Survey, 75% of adults age 50 and older want to remain in their current homes as they age.

But so-called "aging in place" often requires more than simply remaining in a longtime home. As some people get older, features like stairs, narrow doorways, high thresholds, and traditional bathrooms can make everyday tasks more difficult or increase the risk of falls.

As a result, some homeowners may need to install grab bars or step-free entrances, widen doorways or make other accessibility upgrades to continue living safely and independently.

Those improvements can vary widely in cost. According to data compiled by NerdWallet on aging-in-place home renovations:

• Installing grab bars can cost about $100 to $400
• Widening doorways can cost roughly $600 to $2,000 per doorway
• A stair lift can cost about $7,000 on average

For homeowners who need multiple changes, the expense can be significant.

As mentioned, another challenge is that Medicare generally doesn't pay for these types of home modifications.

Medicare Part B may cover certain medically necessary durable medical equipment (DME) prescribed by a doctor for use in your home (e.g., walkers, wheelchairs, hospital beds), provided deductible and supplier rules are met. But Medicare doesn't cover structural modifications to a home or, for example, bathroom "convenience" items like grab bars or raised toilet seats.

That leaves many paying these expenses out of pocket or looking for other sources of assistance.

Home accessibility tax deductions under current law

Keep in mind that the proposed $10,000 tax credit isn't currently available. Congress would need to pass the legislation and have it signed into law by President Trump before eligible taxpayers could claim it. It's unclear if there's sufficient bipartisan support for the measure to gain traction.

But…all is not lost. As Kiplinger has reported, under current IRS rules, certain home modifications may qualify as deductible medical expenses.

Under existing law, a taxpayer generally must itemize deductions to claim medical expenses, and only eligible medical expenses that exceed 7.5% of adjusted gross income (AGI) can be deducted.

Reimbursed medical expenses are not deductible, and the modification(s) must be made primarily to provide medical care for the taxpayer, a spouse, or a qualifying dependent.

Additionally:

• The improvement generally must be tied to a specific medical need. A homeowner who installs a ramp because of a diagnosed medical condition may be able to deduct some of the cost, but someone who adds accessibility features simply as a precaution generally would not receive a tax benefit.
• If a home improvement increases the value of the property, only the portion of the cost that exceeds the increase in the home's value generally qualifies as a medical expense deduction.

For example, if an accessibility improvement costs $20,000 but increases the home's value by $8,000, generally only the remaining $12,000 may qualify as a medical expense deduction, assuming the other IRS requirements are met.

For more information and specific rules, see IRS Publication 502. Consider speaking with a trusted tax professional if you're unsure whether a specific upgrade might be deductible on your return, as this information is provided for educational purposes.

If you're concerned about the costs of making a home upgrade, you may also want to check for programs or organizations in your state or community that may provide assistance for eligible aging-in-place improvements.

What to Read Next

• Tax-Deductible Home Improvement in Retirement
• New Bill Proposes $1 Million Capital Gains Home Exclusion
• 5 Little-Known Senior Tax Deductions
• Property Tax Changes Homeowners Over Age 65 Should Watch in 2026

You found your dream home, the seller accepted your offer, and you're eager to close on the sale. But as you finalize the paperwork, make sure you don't overlook a policy that could prove invaluable down the road: owner’s title insurance. Without it, you could lose your home and the money you've put into it if someone else one day lays an ownership claim to the title — your legal right to own the property.

Many home buyers assume that the title insurance their mortgage lender requires them to pay for at closing protects their interests. However, that policy applies only to the lender's investment. It does nothing to shield your finances if a title dispute arises.

Although purchasing an owner's title insurance policy is optional for home buyers, doing so is worthwhile because it can safeguard your investment, including any financial losses or legal fees, says Sarah Frano, vice president of corporate underwriting with First American Title. "I would not buy a property without title insurance," she says. "I’ve seen the variety of things that can pop up after closing — sometimes years or decades after someone purchases their home."

How it works.

Lenders order a title search once a home is under contract to ensure there are no outstanding ownership claims so that title can pass from one owner to the next. But title examiners don't catch everything, said Karina Borgia-Lacroix, owner of American Real Title in Ft. Myers, Fla.

If they miss an undisclosed heir with a valid claim to the home, for example, that heir could take you to court to challenge ownership. Or if there's a lien on the property for, say, work that a contractor completed but went unpaid by the previous owner, then the home could be forced into a foreclosure if the contractor files a lawsuit. If you don’t have an owner's policy when these types of problems arise, you’ll either have to pay the outstanding liens or defend yourself against title claims in court.

Other scenarios that can result in a dispute, says Frano, include forgery and fraud (such as fake signatures, impersonation or fraudulent sellers); recording errors in county records; misspelled names on recorded documents; and unknown easements that limit how property can be used.

How much does owner's title insurance cost?

While you can purchase owner's title insurance at any time, it’s best to do it during the closing process so you can protect yourself against title claims during the entirety of your ownership.

Plus, purchasing it after closing can be more complex and expensive. If you inherit a property, review the existing title policy to see whether the insurance covers you as an heir, says Frano. If it doesn’t, you’ll need to buy a new policy.

Title insurance premiums are regulated by each state. Expect to pay roughly 0.5% to 1% of the home’s purchase price for an owner's policy. You'll pay much less for the lender's policy, which is based on the loan amount and typically adds just a few hundred dollars to your closing costs.

Buyers usually cover the cost of the lender's title policy. With the owner's policy, whether the buyer or seller pays — or the cost is split down the middle — depends on local customs and laws, Frano says.

Title agents often provide discounts when you combine the purchase of an owner's and a lender's policy, says Borgia-Lacroix. You can shop around among title insurance companies to compare costs and coverage levels.

Buying a home involves more than saving for a down payment. A financial professional can help you build a plan for closing costs, ongoing homeownership expenses and protecting your investment over the long term.

Use the Bankrate tool below to connect with a financial professional and get started today:

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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When you move — whether upgrading, relocating for work or inheriting a family property — you're often left with a deceptively complex decision: Should you keep the home and rent it or sell and move on?

At its core, the rent-vs-sell decision comes down to a fundamental trade-off.

• Renting the property offers the potential for ongoing income and continued exposure to long-term appreciation. It could also provide flexibility, whether as a future residence, a home for family members or a legacy asset.
• Selling the home delivers immediate liquidity, simplifies your financial life and allows you to redeploy capital more efficiently.

Neither approach is inherently superior; the right decision depends on which trade-offs align with your broader financial plan.

A logical starting point is to evaluate the potential return of the property, but that requires defining return correctly. Many homeowners focus on gross rental income and quickly conclude that the property is cash flow positive.

In reality, what matters is net rental yield after accounting for all operating costs, including vacancy, maintenance, property taxes, insurance and management fees if applicable. Once these costs are included, the expected return is often significantly lower than initial assumptions.

Consider a simple illustration. A home valued at $600,000 might rent for $2,500 per month, generating $30,000 annually in gross income. After factoring in vacancy, repairs, insurance, property taxes and potential management costs, the net cash flow might fall in the range of $16,000 to $18,000 per year, implying a net yield of roughly 3%.

By contrast, selling the property and investing $600,000 in a diversified portfolio earning 5% annually would produce about $30,000 per year before taxes.

This comparison is not to suggest that one outcome is inherently better, but rather to highlight that rental property should be evaluated as a net return on capital, not simply as an income stream.

Look at the entire financial impact

Beyond return, risk and portfolio concentration deserve careful consideration. Many homeowners who keep a former residence while purchasing a new one end up with a significant portion of their net worth tied up in residential real estate, often within a single geographic market.

Selling reduces that concentration and converts an illiquid asset into liquid capital that can be diversified or used to fund other financial priorities. Renting preserves the exposure to real estate, which might provide an inflation hedge and long-term appreciation potential, but it also limits liquidity and flexibility.

Taxes are another area in which the decision becomes more nuanced, and many homeowners underestimate the long-term implications.

One of the most valuable tax benefits available to homeowners is the capital gains exclusion under Internal Revenue Code Section 121. If you meet the ownership and use requirements — generally, having lived in the home as a primary residence for at least two of the last five years — you can exclude up to $250,000 of gain if single or $500,000 if married filing jointly.

This benefit can meaningfully reduce or eliminate the tax cost of selling.

That exclusion is tied to timing. Many homeowners have a limited window after moving out during which they can rent the property and still qualify for the exclusion if they sell within the applicable five-year lookback period.

This creates a viable hybrid strategy in some cases: Rent the home temporarily while preserving the option to sell tax-efficiently.

About depreciation

Once a home is converted to a rental, depreciation becomes a key factor. The IRS generally allows the building portion of a rental property to be depreciated over 27.5 years, creating annual deductions that can reduce taxable income.

While this can be a meaningful short-term tax benefit, it also introduces a future cost. When the property is ultimately sold, the portion of gain attributable to depreciation is subject to what's referred to as unrecaptured Section 1250 gain, which is taxed at rates of up to 25%.

A simple example illustrates the point. Assume that $400,000 of a home's value is attributed to the building and the property is rented for five years. Straight-line depreciation over that period would total about $72,700.

At the time of sale, that amount is generally subject to tax at a rate of up to 25%, resulting in a potential federal tax liability of roughly $18,000 on that portion alone.

Perhaps more important, this depreciation-related gain typically can't be excluded under the home-sale exclusion, even if other portions of the gain qualify. For many homeowners, this creates an unexpected tax bill that offsets some of the perceived benefits of renting.

Another misunderstood area

Rental losses are another area that's often misunderstood. While depreciation and other expenses can create tax losses on paper, rental real estate is generally considered a passive activity for tax purposes. As a result, those losses typically can't offset wages or other active income.

There is a limited exception that might allow up to $25,000 of rental losses to offset ordinary income for certain taxpayers who actively participate in the property, but this benefit phases out as income increases.

Losses that can't be used currently are generally carried forward, which means the tax benefit might be delayed rather than eliminated.

Consider the big picture

While financial and tax considerations are central to the decision, don't overlook the lifestyle component. Even with professional management, the owner remains responsible for key decisions, oversight and the financial consequences of vacancies and repairs.

Cash flow isn't guaranteed, and expenses tend to be unpredictable rather than smooth. A useful way to frame this consideration is to ask whether you're comfortable taking on what is effectively a part-time role as a property owner, particularly if you're approaching or already in retirement.

Given the range of factors involved, a structured decision framework can help bring clarity. The most important questions tend to be straightforward:

• Do you need the proceeds from a sale to fund your next financial goal, such as purchasing a new home or strengthening your balance sheet?
• Are you willing to take on the responsibilities of owning and managing a rental property, either directly or through a third party?
• What is the realistic net return after all expenses, rather than the optimistic projection based on gross rent?
• How important are simplicity and flexibility at this stage of your life?

Both renting and selling can be appropriate and financially sound decisions when aligned with broader goals.

• Renting can provide income and long-term appreciation potential, but it introduces complexity, variability and future tax considerations that are often underestimated.
• Selling offers immediate liquidity, simplicity and the opportunity to lock in favorable tax treatment, but it means giving up future real estate exposure and potential rental income.

Content in this material is for general information only and is not intended to provide individualized tax or legal advice. Discuss your specific situation with a qualified tax or legal professional.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

As affordability issues continue to plague the housing market, many homeowners are choosing to make changes to their home rather than their address to get the living space they need.

According to a recent survey from Citizens Financial Group, nearly half of homeowners now say that renovating their house is the most realistic financial option for their family — compared with just 13% who plan to buy a new home — and seven in 10 expect to complete a remodeling project in the next two years.

"They can’t find another place to go," says Linda Kody, a broker with Kody & Company in North Andover, Mass. "They love their neighborhood, and they want a home exactly the way that they want it."

The boom in renovations makes sense given the current state of the housing market. Home prices have jumped 54% since 2020, according to the Joint Center for Housing Studies at Harvard University.

Meanwhile, with mortgage interest rates hovering between 6% and 6.5% lately, many homeowners are reluctant to give up the 3% to 4% loans they scored before rates began climbing a few years ago. The resulting lack of inventory — there are 17% fewer homes for sale now than before the pandemic — also means there are fewer options available for those who want to move.

If you're among the many homeowners contemplating a remodeling project in the next year or two, these strategies can help you decide which projects to tackle and how to keep costs manageable.

Choose renovations strategically.

Start by thinking about your immediate maintenance needs and the functionality required for your lifestyle. If you're planning to stay in the house through retirement, for instance, consider adding design elements, such as a walk-in shower or zero-step entryway, that will make living there easier as you get older.

"The risk of having to move later can be significantly reduced if you prepare your home in advance," says Louis Tenenbaum, president and CEO of HomeRenewed Ventures, a Washington, D.C., firm that offers consulting services for homeowners to age in place.

Tenenbaum recommends completing as many necessary projects as possible simultaneously, because trying to remodel in stages as health and mobility challenges arise ends up being more expensive and stressful. Basic upgrades and repairs, such as replacing old wiring or fixing a leaky roof, also help your home retain its value and reduce maintenance costs in the future.

After that, look at high-use areas such as kitchens and bathrooms. If resale value is important to you, focus on projects that will allow you to recoup a big chunk of your costs.

Recently, that included exterior upgrades (such as replacing garage doors or upgrading siding), minor kitchen remodels and installing a backup power generator, according to Zonda, a home-building data and marketing company.

Keep spending in check.

For larger projects, Alan Archuleta, CEO and president of Archuleta Builders in Morristown, N.J., recommends starting with an architect or design firm with experience in your municipality. Rates for this type of work vary depending on scope, but the average is about $6,600, according to HomeAdvisor.

"The architects and towns dictate what you can and can't do to a home, from a zoning standpoint or an actual structural standpoint," Archuleta explains.

Get quotes from at least three contractors, and ask for itemized bids that spell out costs. Then, add an extra 20% to your budget to allow for surprise expenses, such as water damage or structural repairs, especially in older homes. "Remodeling often prompts code upgrades that would not otherwise be required," says Mari Adam, a certified financial planner in Boca Raton, Fla.

You can lower costs further by opting for midrange fixtures and materials, which balance quality and costs. If you can be flexible with your project’s timing, you may also find better contractor availability and pricing.

"The smartest approach right now is to renovate with intention, rather than rushing into a project," says Elizabeth Gomez, owner of Bridge City Contracting in Portland, Ore.

If you're planning a major renovation, comparing today's refinance rates could help you determine whether tapping your home's equity makes sense for your budget.

Use the Bankrate tool below to compare some of today's top refinance offers:

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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There's a conversation that comes up in the mortgage business more than you'd think.

Consider a retired couple, financially comfortable, with no substantial debt, a home they own outright and brokerage and retirement accounts that have been accumulating wealth for 30 years.

They want to buy a place in Florida, move closer to grandchildren or downsize and free up some equity. They apply to get preapproved to buy a home with financing — and get denied by the lender.

The issue isn't their credit score, nor is it their ability to afford the payments. It's their income. It doesn't meet the threshold the lender is looking for.

That experience is more common than most people realize, and it points to something worth understanding before you find yourself in the same position.

Traditional mortgage guidelines weren't built for most retirees

Mortgage qualification in the United States runs on a single central question: How much verifiable income comes in every month?

That question made sense when the dominant borrower was a salaried employee in their 30s or 40s, with pay stubs, W-2s and a tidy debt-to-income (DTI) ratio. The whole underwriting framework, from DTI calculation to income documentation requirements to approval logic, was calibrated around that person.

Retirement changes the picture entirely. Social Security counts. Pension income counts. Required minimum distributions (RMDs) from an IRA count, provided they've already started, count.

But a brokerage account with $900,000 in it? That's negligible. A paid-off home worth $700,000? That can't show up as income.

In conventional underwriting, home value doesn't service a mortgage.

According to research from the Center for Retirement Research at Boston College, rejection rates rise consistently with age. Borrowers ages 60 to 69 are 1.54% more likely to be denied than younger applicants. Past 70, that gap reaches 2.7%.

Wealth is not the problem. The mismatch between where that wealth lives and what lenders are looking for is.

Asset depletion as a workaround

A methodology called "asset depletion" — you might also hear it called "asset-based qualification" or "asset dissipation" — exists specifically to bridge that gap. It's been around for a while, and most lenders are aware of it.

The issue is that not all offer it, and among those that do, the version available through conventional channels often doesn't produce enough qualifying income to matter. That distinction is worth understanding before you start shopping.

Here's the basic idea. A lender totals your eligible liquid assets (checking, savings, taxable brokerage accounts and retirement accounts after a standard discount for taxes and market risk) and runs a calculation.

Under conventional mortgage standards, the total gets divided across the remaining loan term to produce a synthetic monthly income figure. That number goes into the DTI calculation alongside whatever documented income you're already receiving. If the math works, you qualify.

To put some numbers to it: Say a retiree has $2 million in a brokerage account and wants to buy a home in Boca Raton, Florida. Under conventional asset depletion guidelines, that $2 million gets discounted roughly 30%, then divided across 360 months, producing about $3,900 a month in qualifying monthly income.

Combined with Social Security, that might not be enough to qualify for a home at the price point they're looking at in that market.

The same $2 million run through a non-QM, or non-qualified mortgage, framework, where lenders can divide by as little as 60 months rather than 360, produces closer to $23,000 a month in qualifying income.

That's a different conversation entirely. Instead of being ineligible to purchase a home, the buyer can easily qualify to buy a home in excess of $1 million. It's a huge part of why lender selection matters. While the assets didn't change, the calculation changes the qualification.

What counts as eligible is key. Liquid, accessible accounts generally do. A paid-off home doesn't since equity isn't income until you tap it.

Business assets, illiquid investments, and anything pledged as collateral typically get excluded. The discount applied to retirement accounts varies by lender, with most taking somewhere from 30% to 40% off the top to account for the tax liability and withdrawal timing.

What to do before you apply

Most big banks and conventional lenders don't offer asset-based qualification, or they offer a narrow version of it that doesn't serve most retiree profiles well.

The Fannie Mae and Freddie Mac framework for asset depletion divides eligible assets over 360 months, regardless of the actual loan term.

For most retirees, the monthly income figure that process produces is too compressed to move the needle on a purchase loan. If you're working with a lender whose only option is conforming underwriting, you might be hearing "no" when a different lender would have said "yes."

Portfolio lenders, meaning institutions that hold loans on their own books rather than selling them into the secondary market, can offer asset-based qualification, but they tend to carry higher rates than lenders operating in the non-QM wholesale space.

Non-QM lenders set their own underwriting guidelines rather than following Fannie or Freddie's framework, and because they distribute through wholesale channels, the pricing is generally more competitive.

Non-QM is not a synonym for high-risk. For a retiree with substantial assets and clean credit, it's often the channel that produces the best combination of qualification flexibility and rate.

The catch is that most consumers don't have direct access to these lenders, and the ones they can access typically have higher rates.

Working with a mortgage broker rather than going directly to a bank or portfolio lender matters here more than in most borrowing situations because you get more access to lenders, and more options often mean lower rates as lenders compete for your business.

Brokers have wholesale relationships across multiple investors and underwriting frameworks and can match your financial profile to the product built for it.

On the documentation side: Be ready. Lenders using asset depletion typically want two to three months of statements across every eligible account, proof of ownership and, sometimes, a written explanation for any large deposits or transfers in the recent statement period.

If your accounts are spread across four or five institutions, start gathering statements early.

One thing worth saying plainly: Drawing down the assets you use to qualify affects the financial picture those assets were meant to support long term. This decision sits at the intersection of mortgage strategy and retirement income planning.

A conversation with a financial adviser before you apply will help you think through whether the structure makes sense for your situation.

Who you talk to determines your ability to buy a home

Getting this right has less to do with how much you have than with understanding, before you walk into anyone's office, that the conventional mortgage path wasn't built for your financial profile.

The borrowers who find their way through it are usually the ones who went looking for lenders equipped to work with them.

Remember, a denial is not a verdict.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It’s easy to see why Florida is a haven for retirees. Between the year-round warm weather, miles of coastline, and zero state income tax, the Sunshine State is already home to roughly 5 million people 65 and older.

However, relocating doesn't guarantee a lower cost of living, even for those moving from high-cost northern states. Unforeseen expenses in Florida can easily derail an otherwise solid retirement budget.

"Florida is great because there is no income tax," says Andy Smith, a certified financial planner at Edelman Financial Engines. "But people have to look at the total cost of living instead of focusing on one particular tax advantage."

From HOA fees to hefty insurance premiums, before you make the move, be sure to budget for these unexpected expenses.

1. Sky-high HOA fees

Whether you live in a condo or a community, homeowner's association fees are a fact of life in many Florida communities, and that fee can get expensive.

Florida leads the U.S. with the most expensive HOA fees, with seven of its cities charging the highest HOA fees, according to Realtor.com. Take Miami, for one example. The owner of a $425,000 home in Miami pays $617 a month in HOA fees.

2. Surprise condo special assessment fees

Ever since the 2021 collapse of the Surfside condo in Miami, Florida, associations with buildings three stories or higher are subject to mandatory structural inspections and must have fully funded reserves. When condo associations don't, they can charge unit owners a one-time special assessment.

"Many of these buildings are quite old," says John Gillet, CEO and founder of Gillet Agency. "You should thoroughly investigate the condo before making a financial move."

If you can't get a sense of how the condo association is run, what the financials look like and the structure of the building and the unit, you should hire a consultant to research before buying, Gillet said. An assessment fee, if ever required, can range from a few hundred dollars to tens of thousands of dollars.

3. Rising insurance premiums

Expect to pay more than the national average for insurance in Florida, whether it's homeowners, health, or auto. That's across the board in the state, and even higher in certain metro areas. "Insurance is very, very expensive," says Michael Cabanas, a regional managing director at Fiduciary Trust and a longtime Miami resident. "If you live in a flood zone, flood insurance is required by law, and it's not cheap." The same goes for auto insurance. Florida is among the costliest states for auto insurance, according to a U.S. News & World Report ranking.

4. Year-round utility bills

Florida electricity rates are below the national average, but residents' monthly utility bills are among the highest in the country. The reason? Year-round heat and the need to stay cool.

"Instead of two or three months, you pay for eleven months out of the year," says Cabanas. "That's an expense some northeasterners may not anticipate when they move down here."

5. Lack of caregivers

Supply and demand are on display in Florida when it comes to caregiving. As retirees flock to the state, demand for caregivers is rising, driving up the cost of care. In fact, Florida ranks last in caregivers, with just 17 personal care and home health aides per 1,000 adults aged 65 and older. That compares to the national average of 65 per 1,000, according to America's Health Rankings.

6. Property tax resets

Florida caps annual property tax assessments for existing homeowners at 3%, but when a retiree buys a home, that number resets to the market rate. When they get their tax bill in year two, homeowners could be in for a big shock when their property taxes are double or triple what the previous owner paid.

Calculate everything before you make a move

Just because there are unexpected costs associated with moving to Florida doesn't mean you shouldn't make the move. Every town, city and state has different costs that may offset tax breaks. The good news is that with a little research, you can figure out what they are ahead of time and determine if the Sunshine State still makes financial sense for your retirement.

Related Content

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• Why Do People Retire to Florida? 9 Things You Must Know
• Average Spending by Age for Those 55 and Up: How Do You Compare?
• 3 Questions That Reveal if You’re Actually Ready to Age in Place

A lot of people get into real estate the same way my brother Brian and I did. You buy a few properties on the side, learn as you go and assume steady growth will come from owning real estate long enough.

Before founding Roers Companies in 2012, we built a portfolio of about 20 residential and student housing properties near the University of Minnesota. It was a side venture we grew while working in finance — Brian as a CPA and me as a CERTIFIED FINANCIAL PLANNER® (CFP®).

At the time, we knew our local market well and had a strong network, but we were still thinking fairly small. We were focused on managing individual rentals instead of building something durable in the long run.

Looking back, it's clear we needed to shift our perspective on risk and growth. Investors today have less room for error than they did a few years ago, which makes long-term planning and risk management much more important.

While every investor's journey is different, these are the three lessons that shaped our approach — and that every investor should understand from the start.

1. Smaller doesn't always mean safer

A lot of first-time investors start with a single-family rental, duplex or small multifamily property because it feels manageable. There's nothing wrong with that approach, but many people assume smaller automatically means lower risk.

In practice, smaller properties can leave you more exposed. If you own a duplex and one tenant leaves, a large portion of your income stream disappears overnight.

A major repair can wipe out most of the year's profit. Even routine turnover carries more weight when there are only a handful of units supporting the property.

That was one of the first lessons Brian and I learned as we expanded beyond lease-to-own and student rentals. Larger apartment communities brought more operational complexity, but they also created more stability.

Vacancies, repairs and day-to-day issues had less impact on the overall performance of the property because the risk was spread across more units.

For individual investors, that doesn't necessarily mean jumping straight into a 200-unit development. It means understanding that larger properties tend to absorb the ups and downs of ownership differently.

When one tenant moves out or an unexpected repair comes up, those issues don't have the same impact they do when you only have a handful of units.

2. Diversification isn't just for the stock market

Buying a resilient property is one decision. Building a resilient portfolio is another.

One of the most important experiences in our early years came during the oil boom in North Dakota. At the time, demand was surging, and we were developing in markets that were growing incredibly fast to house the influx of oil workers.

In the thick of the boom, it felt as if demand would never slow down. Then conditions changed.

That experience reinforced something that applies everywhere: No market stays hot forever, and no region is immune to economic shifts.

After that, we became much more intentional about diversification. We expanded into different states and different types of housing because we didn't want the future of the company tied too closely to one local economy or industry.

For us, that meant — and still means — building a portfolio that isn't overly dependent on any one market, property type or stage of the economic cycle.

Individual investors should think the same way. Too often, people build portfolios entirely around what's familiar or close to home. That can work for a while, but it can also leave investors exposed to risks they didn't anticipate.

This is especially true as regional markets navigate the supply-and-demand resets we're seeing today.

Diversification in real estate is not only about owning more properties. It's about reducing the likelihood that all your investments are affected by the same economic pressures at the same time.

3. Long-term value is usually built through operations, not luck

Many people enter real estate assuming the biggest gains will come from appreciation alone. Sometimes that happens, but relying on market appreciation as the entire strategy can create problems. Strong operators look closely at how a property performs.

• Can expenses be managed more efficiently?
• Are there upgrades that could make the property more competitive?
• Is management helping the property operate at its full potential?

Those decisions tend to matter more over time than hoping the market keeps moving upward.

Investors today also face a more competitive environment than they did a decade ago, especially in multifamily housing. In this sector, value is closely tied to the income a property produces.

Improving operations, reducing inefficiencies and making thoughtful improvements can all strengthen performance in a way that's far more reliable than trying to predict market swings.

That shift in thinking changes how investors approach growth. Instead of waiting for the market to create value, they focus on building value through better execution and better long-term management.

Real estate can absolutely be a strong long-term wealth-building tool, and experience has taught me that success usually comes from focus more than momentum.

The investors who last are usually the ones who show grit when markets change and avoid making emotional decisions when things get uncertain.

That approach might not feel exciting in the short term, but it tends to create far more stability — and success — in the long run.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

"John" called me on a Tuesday. He had just accepted an offer on a strip center he had owned for 26 years. He was happy about the price and miserable about everything else.

He did not want to find another building. He did not want to sign another lease, chase another tenant or fix another roof. What he wanted, in his words, was to never get another midnight phone call about a toilet.

Somebody had told him about a Delaware Statutory Trust (DST). He did not know what it was. He only knew it was supposed to make his problem disappear. By the end of our call, I told him a DST might be exactly right for him. I also told him that if one detail had been different, it would have been exactly wrong.

That is the honest truth about DSTs. They are a wonderful tool for the right person and a poor fit for the wrong one. The trouble is that most of the people selling them only describe the right person. So before you exchange a dime, sit with these five questions.

1. Are you actually done being a landlord?

Not tired. Done.

There is a difference. Tired is Saturday morning after a bad week. Done is a decision. You give up control completely. The sponsor makes every decision about the building, the financing, the tenants and the eventual sale. You collect monthly distributions and you wait. You cannot vote on a roof. You cannot fire the manager. You cannot decide to sell next spring because you found something better.

For the man with the strip center, that loss of control was the entire point. He had been the manager for 26 years and he was finished. For the next person, that same loss of control is a cage. If part of you still loves the hunt, the negotiation, the ownership, a DST will frustrate you. Be honest about which person you are.

2. Do you meet the DST accredited investor requirements?

Most DSTs are offered through private placements generally limited to accredited investors. The current thresholds are a net worth above $1 million not counting your home, or income above $200,000 a year as an individual, or $300,000 jointly with your spouse, in each of the last two years with the expectation of the same this year.

Most people selling an appreciated property clear this bar without thinking about it. But you have to actually meet it and be able to document it. If you cannot, the door does not open and no adviser can open it for you.

3. Is your money big enough to spread out, but not so big you should buy a building?

Most DSTs set a minimum investment between $25,000 and $100,000, depending on the offering. The properties themselves are large, often $30 million to $100 million, which is how a single investor ends up owning a sliver of an apartment complex or a distribution center they could never buy alone.

Here is the sweet spot. If your 1031 exchange proceeds are large enough to split across several DSTs, you get something a single replacement building can never give you: Diversification.

You can own a piece of an apartment community in one state, a medical building in another and an industrial property in a third, all inside one tax-deferred exchange. One bad tenant no longer ruins your year.

But there is a ceiling to the logic. If you are exchanging a very large sum and you genuinely enjoy ownership, buying your own replacement property may still be the better answer.

A DST trades control for convenience. The more capital you have, the more that trade is worth examining rather than assuming.

4. Do you understand DST illiquidity and are you at peace with it?

This is the question people skip and the one that causes the most regret.

A DST is not a stock. You cannot sell it next Tuesday because you changed your mind or because you need the cash. There is no real secondary market to speak of.

Your money is committed until the sponsor sells the underlying property, which typically happens somewhere between five and 10 years out, on a timeline you do not control.

If everything you are putting into the DST is money you will need to touch in the next few years, stop. This is the wrong vehicle. A DST is for capital you can leave alone.

Before anyone exchanges, I want to see that the rest of their financial life is liquid enough that locking up this piece does not keep them awake at night.

5. How does this fit your estate plan?

This question matters because the answer can change the whole calculation, and most people never get to it.

If the goal is income and simplicity for the rest of your own life, a DST can deliver both. But think one step further. Under current law, when you die, your heirs generally receive a basis adjustment that can eliminate the deferred capital gain for income tax purposes.

The gain you carried for years does not have to pass to them as a tax bill. The DST interest transfers at its value on the day you die, and the embedded gain can be wiped clean.

That single feature changes the math for a lot of families. A property you might have been afraid to sell because of the tax can be exchanged into a passive, diversified DST, held for income while you are alive, and then handed to your heirs without that gain following them.

If your spouse or children are part of the plan, a DST is not just an exit. It is part of an estate strategy worth discussing with your adviser and your estate attorney before you commit.

A word on DST investment risks

DSTs draw their tax treatment from IRS Revenue Ruling 2004-86, which lets you exchange real property for an interest in a DST without recognizing gain under Section 1031, provided the other 1031 requirements are met.

That treatment comes with a set of strict requirements, also known as the Seven Deadly Sins, and one of them matters most to you: Once the offering closes, the sponsor generally cannot raise new money or restructure the financing. If the property runs into trouble, the trust's hands are largely tied.

That puts enormous weight on one thing: Who the sponsor is. A DST is only as sound as the company managing it and the building underneath it. Distributions are not guaranteed. Real estate values can fall. Some sponsors have run into serious trouble, and their investors had little recourse.

Anyone who tells you a DST is safe is selling, not advising. The right question is not whether DSTs are safe. It is whether this specific property, run by this specific sponsor, at this specific price, is worth your money.

So, is a DST right for you?

Go back to John, the man with the strip center. He was done being a landlord, he was accredited, his proceeds were large enough to spread across three properties, he had plenty of liquidity elsewhere and he wanted what was left to pass cleanly to his daughter. Five for five.

For him, the decision to invest in a DST was close to perfect, and that is exactly what we did.

If you answered those five questions the way he did, a DST may be one of the best decisions you make in retirement.

If you stumbled on even one of them, that is not a reason to give up. It is a reason to slow down and look harder, because the wrong DST is far more expensive than no DST at all. The vehicle rarely fails those investors. The question they skipped does.

Related Content

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• Don't Defer Retirement if You're a Landlord, Defer Taxes Instead
• DST Inventory Just Hit a Record $3.9 Billion: What 1031 Exchange Investors Should Do Next
• Why Your Next 1031 Exchange Decision Might Not Be About Taxes (It Could Be About Life)
• A 1031 Exchange May Look Great for You on Paper, But It's Not Just About Taxes

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When planning for retirement, state taxes on your 401(k), pension, and Social Security benefits should be part of your strategy.

Yet while some states offer no retirement taxes on any of these sources, a zero-percent tax rate can lose its shine if you can't get a doctor's appointment when you need one.

After all, an average 65-year-old retiring in 2026 can reportedly expect to spend $185,500 on healthcare and medical expenses throughout retirement. And living comfortably on a fixed income requires balancing healthcare costs with other top retiree concerns, like housing and daily living expenses.

To help you navigate this balancing act, we cross-referenced states that don't tax retirement income against property tax data, cost-of-living metrics, and senior healthcare rankings. The final list highlights the five most tax-friendly states for retirees, ranked by the quality and accessibility of their older-adult healthcare.

How we ranked these retirement states

Our list draws from Kiplinger's analysis of states that do not tax retirement income. Among the 13 states meeting that baseline, we filtered for the ten with the lowest median property taxes paid on mortgage homes (using PropertyShark data referenced from the latest U.S. Census Bureau data points).

Cost-of-living data was drawn from the Missouri Economic Research and Information Center (MERIC) index, where a score of 100 represents the national average.

Then, states were ranked using the United Health Foundation's "America's Health Rankings Senior Report," specifically focusing on "Clinical Care for Seniors." This metric evaluates:

• Healthcare access: Including availability of dedicated primary care providers, home health aides, and care affordability.
• Clinical services: Including rates of routine cancer screenings, avoided care rates due to high costs, and flu and pneumonia vaccinations.
• Quality of care: Including hospice care usage, nursing home quality ratings, and preventable hospitalization stays (per Medicare beneficiaries aged 65 to 74).

Scores range around a national benchmark of 0.00. Positive scores indicate above-average healthcare performance, while negative scores reflect below-average metrics. However, it's important to note that these scores are statewide averages and are not indicative of any one area within a specific state.

This list evaluates state income tax only. Federal income taxes still apply. Consult with a qualified tax professional when necessary.

1. Washington: Outstanding healthcare, higher cost of living

Senior healthcare ranking: +0.528 (Top 10 nationwide)

Median property taxes paid: $4,556

Cost-of-living score: 114.6 (14.6% above national average)

Washington takes the top spot on our list. The Evergreen State exempts all retirement income from state tax, meaning your Social Security, pensions, 401(k)s, and IRAs remain untouched by local authorities.

Another retiree benefit is its healthcare system. With a score of +0.528, per the Clinical Care report, Washington's medical care for older adults is above average, placing it in the top 20% of all states nationwide, just behind Colorado.

Yet everyday affordability remains an issue.

• Washington's median annual property tax bill exceeds $4,500, and overall living expenses — like groceries and housing costs — run roughly 14.6% higher than the national average.
• Plus, Washington recently approved an increased capital gains tax structure ranging from 7% to 9.9% on certain high-value investments, which can make the state more expensive for higher-wealth individuals.

But if you're retired and can comfortably afford the often higher price tag of Pacific Northwest living, Washington delivers an ideal combination of state retirement tax income exemptions and top-tier healthcare.

Related: 10 Cheapest Places to Live in Washington

2. Pennsylvania: Strong healthcare and moderate living costs

Senior healthcare ranking: +0.320 (#16 nationwide)

Median property taxes paid: $3,311

Cost-of-living score: 96.2 (3.8% below national average)

Pennsylvania slides into second on our list. The Keystone State exempts retirement income from state tax, including Social Security, pension payouts, and 401(k) or IRA distributions.

Senior healthcare access also remains strong here. With a score of +0.320, older adults may expect high-quality medical care, placing the state in the top 32% nationwide, according to data from the United Health Foundation. Plus, the average cost of living sits nearly 4% below the national average.

• But while retirement income is exempt from state taxes, all other income sources (like interest and dividends) are subject to a flat 3.07% state income tax.
• Additionally, the median property tax bill, while lower than Washington, remains 11% above the national average according to data from PropertyShark.

For retirees, Pennsylvania may offer a more balanced financial profile than higher-tax northeastern neighbors, like New York. However, elevated property tax bills can be difficult on a fixed income.

3. Iowa: Affordable living with above-average care

Senior healthcare ranking: +0.185 (#21 nationwide)

Median property taxes paid: $2,897

Cost-of-living score: 88.6 (11.4% below national average)

Iowa may be a true hidden gem for budget-conscious retirees. The state exempts retirement income from state taxes for residents aged 55 and older, meaning you don't have to wait long before you get state income tax relief.

On top of that tax exemption, Iowa boasts the lowest property tax bill among our top three states on this list, at just under $2,900. This is right below the national average, according to the U.S. Census Bureau, and the savings don't stop there. The Hawkeye State's cost of living is more than 11% below the national average, according to MERIC.

And perhaps more importantly, low cost doesn't automatically mean low healthcare quality, either. Iowa's senior healthcare ranking sits in the top 42% of the nation (ranking 21st overall in the Clinical Care United Health report), supported by lower rates of preventable hospitalizations.

• While Iowa ranks high nationally for average senior clinical care, its rural geography can create more care disparities for some areas than in, say, Washington or Pennsylvania.
• Plus, if you're used to a top #20 state for prime medical care, Iowa falls just short of that in the Clinical Care report.

Yet for fixed-income retirees seeking a balance of affordability and dependable healthcare (at least in more urban areas), Iowa may be considered a standout choice among tax-friendly states.

4. Florida: Low taxes, but rising costs and healthcare strain

Senior healthcare ranking: -0.103 (#31 nationwide)

Median property taxes paid: $2,730

Cost-of-living score: 100.7 (0.7% above national average)

Florida remains a classic choice for retirement because it levies no state income tax at all, protecting not just retirement distributions but also interest and dividends (and who doesn't love the weather?).

However, the Sunshine State's significant influx of retirees in recent years has created new friction points.

• Rapid population growth stretches the doctor-to-patient ratio, lowering Florida's senior healthcare access score to slightly below the national benchmark, according to the United Health Foundation.
• Additionally, rising housing expenses and skyrocketing home insurance rates have pushed Florida's overall cost of living slightly above the national average, according to MERIC.

So while Florida remains viable, a 2026 retirement plan in the Sunshine State might mean preparing for higher everyday expenses and longer waits for medical specialists than in previous decades.

Related: 10 Cheapest Places to Live in Florida

5. South Dakota: Maximum tax relief, lower healthcare access

Senior healthcare ranking: -0.263 (#35 nationwide)

Median property taxes paid: $2,724

Cost-of-living score: 94.1 (5.9% below national average)

Like Florida, South Dakota levies no state income tax on personal income (though its cold weather stands in sharp contrast to the Sunshine State).

South Dakota also has the lowest median property tax bill on this list, per U.S. Census Bureau data, and a cost of living roughly 6% below the national average.

One drawback for seniors requiring medical care in the Mount Rushmore State is medical availability, per the Clinical Care report.

• South Dakota ranks 35th in older adult clinical care, with a score below the national average.
• Rural geography and fewer medical centers mean accessing specialized care can require travel.

But if your primary goal in retirement is stretching your dollars as far as possible and you are comfortable with traveling for specialty care, South Dakota may offer your retirement nest egg significant financial benefits.

Read More

• How All 50 States Tax Retirement
• States That Won't Tax Your Death
• 5 Retirement Tax Traps to Watch in 2026
• How to Prepare Your Retirement Taxes for a Longer Life

In 1964, The Beatles released A Hard Day's Night, a soundtrack to a whirlwind year that captured the frenzy of Beatlemania.

Buried among the album's better-known hits is a John Lennon song called "When I Get Home." The song is energetic, upbeat and driven by a simple desire: After a long and exhausting journey, he just wants to get home.

More than 60 years later, many young Americans share that same desire. The difference is that today's journey home is proving far more difficult than Lennon could have imagined.

For generations, buying a first home was considered one of the defining milestones of adulthood. It wasn't easy, but it was attainable. A starter home represented more than four walls and a roof. It was a foundation for building wealth, raising a family, and creating a sense of stability and belonging.

After nearly four decades of working with families, I have observed that most families build their wealth primarily through two pillars.

The first is the home equity they build as prices rise over time and mortgages are paid down a little each month.

The second is the regular deposits they make to their 401(k) plans through payroll deduction over decades of employment.

Today, that first step onto the property ladder is becoming increasingly difficult.

Hurdles for first-time buyers

According to a recent Zillow report, there are now 242 cities across the United States where a starter home costs $1 million or more. Before the pandemic, that number stood at just 80. In just a few years, the number of cities where a modest entry-level home carries a seven-figure price tag has more than tripled.

The challenge facing young families extends well beyond the purchase price itself. Home values have risen substantially over the past decade, but so have many of the ongoing costs associated with homeownership. Property taxes, insurance premiums, utilities and maintenance expenses have all climbed, making ownership more expensive even for families that can afford the mortgage itself.

Then there is the mortgage.

For much of the decade following the Great Financial Crisis (GFC), prospective buyers could borrow money at historically low interest rates. While home prices were rising, monthly payments remained relatively manageable because financing costs were exceptionally low.

That equation has changed dramatically. Higher interest rates combined with higher home prices have pushed monthly mortgage payments to levels that would have seemed unimaginable only a few years ago.

Many younger buyers view mortgage rates near 6% as unusually high, but historically, they are not. When I began my career in 1987, mortgage rates were often between 9% and 10%, and rates above 5% were considered normal for much of the following two decades.

The difference today is that buyers are confronting those rates after spending more than a decade anchored to the exceptionally low borrowing costs that followed the GFC. Economists call this recency bias. When rates returned to more historically typical levels, many buyers experienced sticker shock.

As a result, many young families find themselves squeezed from both directions. Saving for a down payment has become more difficult because everyday living expenses consume a larger share of household income.

Student loan payments, childcare costs and rising insurance premiums often leave little room for accumulating the savings needed to buy a first home.

At the same time, even those who successfully save enough for a down payment often discover that the monthly mortgage payment remains out of reach.

Real cost of delayed homeownership

In many ways, this story is about more than housing.

Homeownership has historically been one of the primary ways middle-class Americans build wealth. A home is often the largest asset a family will ever own. It provides the opportunity to accumulate equity, benefit from appreciation over time and create financial flexibility for future goals.

Delaying homeownership by five, 10 or even 15 years can have meaningful consequences for long-term wealth creation by delaying the accumulation of equity and the compounding effect of home price appreciation.

According to research from MBS Highway, an organization that conducts economic research and forecasting on the real estate and mortgage markets, homeowners tend to have substantially higher net worth than renters over time. Property ownership serves as a forced savings plan, an inflation buffer and a stability anchor for long-term financial security.

This is one reason housing affordability has become such an important economic issue. It is not simply about real estate markets or mortgage rates. It is about whether younger generations will have access to the same wealth-building opportunities that previous generations enjoyed.

Helping others break into the market

Of course, every generation faces its own challenges. The path to homeownership has never been perfectly smooth. Markets change, interest rates fluctuate and economic conditions evolve. Yet the combination of higher prices, higher financing costs and higher ongoing ownership expenses has created a particularly difficult environment for today's first-time buyers.

I have had many conversations with clients who have children and grandchildren struggling to buy their first home. They understand the frustration and, at times, the feeling that the math simply doesn't work.

In some cases, families that have used the financial planning process and are confident they have achieved their own retirement goals are exploring ways to help younger generations with down payments or other housing-related expenses as they work toward financial independence.

Many young families are simply looking for a place to start. They are looking for a place to put down roots, build a life and create a sense of permanence. In other words, they simply want to get home.

Back in 1964, Lennon sang about the anticipation of finally reaching the place where he wanted to be. For many young Americans today, that same destination remains the goal. The challenge is that the road home has become far longer and more expensive than it was for the generations that came before them.

Related Content

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• Think You Can Afford That House? Run These Numbers First
• Running on Empty: Why Your Retirement Plan Might Be Closer to E Than You Think (Another Lesson From the School of Rock)
• Does the Market Feel Like We Do? It Does Not, and This Is Why That Matters (Another Lesson From the School of Rock)
• A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The allure of retiring to Florida can be strong. Palm trees, sandy beaches, warm weather and zero income tax drive retirees in droves.

But for some, Florida isn't what they expected. Sure, they save money on income taxes, but the hefty homeowners' association fees and skyrocketing insurance premiums more than cancel that out. That doesn't include the hurricanes, persistent humidity, heavy traffic and overcrowding.

These retirees want what Florida promised, but on a more manageable scale. They can get that from what is known as "half-back" states, which offer tax-friendly policies, mild weather and a lower cost of living.

For Northeasterners, they sit perfectly between Florida and their old hometowns, keeping them within an easy day's drive of the grandkids. They might not check off every box that Florida offers, but what they lack, they make up for in their own unique charm and appeal.

If you're ready to say goodbye to Florida's heat and high HOA fees, here are four half-back states that might be right for you.

Why Georgia is a top pick for ex-Florida retirees

Georgia might tax your income, but it offers other advantages that make it appealing to disillusioned Florida residents, including no tax on Social Security benefits, no estate or inheritance tax and low property taxes.

There's also the Georgia homestead exemption, which lowers property taxes for homeowners through the reduction of some county and school taxes. It is offered at a set amount by the state of Georgia, but some counties offer higher amounts. People age 65 and older might be granted an additional exemption.

Beyond taxes, Georgia offers warm weather without the extremes of Florida. Winters are mild, with temperatures dropping to around 60 degrees. Summers are hot, with temperatures reaching into the 90s, but not as humid as Florida.

Homes are more affordable in the Peach State. A two-bedroom house costs about $335,358, while a one-bedroom rental is around $1,440 per month. That compares with $378,126 and $1,693, respectively, in Florida.

Georgia also gives retirees something that Florida can't: geographic diversity. Retirees can live near the historic streets of Savannah or in the peaceful Blue Ridge Mountains. In Georgia, you get it all: mountains, the coast and small, charming towns dotted all over the state.

North Carolina: Milder seasons without the humidity

You won't get the year-round summers that you do in Florida, but you also don't have to worry about oppressive humidity in the Tar Heel state. North Carolina offers retirees a four-season climate, but milder. Temperatures hover around 50 degrees in the winter and 90 degrees in the summer.

While North Carolina taxes your income, it exempts Social Security benefits and doesn't have an estate or inheritance tax. You can purchase a two-bedroom home for around $340,430 in North Carolina, which is cheaper than in Florida. Prefer to rent? A one-bedroom apartment is about $1,362 per month in the state.

Just as in Georgia, you get the best of both worlds in North Carolina — the Blue Ridge Mountains, which offer stunning views and great hiking trails, and the Atlantic coast. There's also city life, thanks to Charlotte, home of the Carolina Panthers professional football team and the Charlotte Hornets, its professional basketball team. It's even closer than Florida if you're visiting friends and family in the Northeast.

South Carolina: A taste of Florida closer to home

South Carolina gives you a taste of Florida with miles of sandy beaches, southern charm, plus a slice of the Blue Ridge Mountains. Home to historic coastal cities and pristine golf courses, South Carolina is a popular destination for half-back retirees because of the mild weather and low cost of living. Temperatures during the winter are around 60 degrees; In the summer, they hover around 90 degrees.

South Carolina taxes your income, but you don't pay taxes on your Social Security. You can also deduct up to $15,000 of your individual income or $30,000 for couples filing jointly. Your heirs won't have to worry about paying an inheritance tax. The average cost of a two-bedroom home is $309,323, while a one-bedroom apartment goes for $1,412 per month.

Tennessee: No income tax and mountain living beyond the coast

You won't find sandy beaches in Tennessee, but you will find a mix of rolling hills, mountain peaks and the birthplace of country music.

Home to Dolly Parton's theme park, Dollywood, Tennessee offers retirees a mild climate, a low cost of living and quick access to friends and family in the Northeast. In Tennessee, retirees can choose to live in the mountains of Gatlinburg or Pigeon Forge, or at the center of world-class music culture in the rolling hills of Nashville.

As with Florida, Tennessee doesn't have a state income tax, nor does it tax Social Security or withdrawals from retirement accounts, such as 401(k)s and IRAs. There is no inheritance tax, and property taxes are low. You can get a two-bedroom home for an average of $338,769. Monthly rent for a one-bedroom apartment is $1,365.

Is a half-back move right for your retirement?

Florida might have been your lifelong dream for retirement, but don't beat yourself up if it didn't work out. You aren't alone. The good news is there are plenty of half-back states you can call home. Some offer you the sandy beaches of Florida, warm summer months and a vibrant coastal lifestyle. Others offer geographic diversity, a lower cost of living and proximity to family and friends.

But before you move to one of these half-back states, do your homework, crunch the numbers and test drive before making it permanent.

Methodology: To select the best half-back states for retirees, we looked at the proximity to Florida, the average price of a two-bedroom home based on Zillow, and the average rental price for a one-bedroom apartment, according to Apartments.com. We also looked at the average temperatures in the winter and summer months, activities for retirees and the tax treatment in the state.

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Recent changes in the housing market bring good news for home buyers. According to Realtor.com’s June 2026 housing trends report, asking prices are easing and buyers have more leverage than they've had in recent years.

The national median listing price was $430,000 in June, down 2.5% year-over-year. It marks the eighth consecutive month of year-over-year asking price decline.

Falling asking prices may be a sign that sellers are becoming more flexible. Rather than holding out for pandemic-era prices, they're adjusting to current market conditions, giving buyers more opportunities to negotiate and some welcome relief on price.

1. More sellers are cutting prices

An increase in price cuts is an encouraging sign for buyers. In June, about 18.8% of active listings had a price reduction, suggesting that more homes are sitting on the market longer and sellers may be becoming more willing to negotiate.

Buyers can use that information to their advantage. A home's price history, the number of days it has been on the market and any previous price reductions can all help you gauge how much negotiating power you have.

If a property has been listed for several weeks or has already seen multiple price cuts, you may have room to negotiate a lower purchase price or ask the seller to cover closing costs, pay for repairs or offer other concessions.

2. Buyers have more homes to choose from

According to the report, active home listings increased 1.9% year over year and 4.1% from May. More homes on the market give buyers more options and reduce the pressure to make rushed decisions or waive important protections, such as a home inspection.

Increased inventory can also reduce competition, making bidding wars less common and giving buyers more room to negotiate. Even so, inventory remains below pre-pandemic levels nationally, and conditions vary widely by region.

In the South and West, active listings now slightly exceed pre-pandemic levels, giving buyers considerably more choice. In contrast, the Northeast continues to face a significant housing shortage, with active listings still 47.3% below pre-pandemic levels, the largest inventory gap in the country.

3. Homes are no longer taking longer to sell

For the past 26 months, homes took longer to sell than they had a year earlier, but that trend leveled off in June. The median home spent 53 days on the market, unchanged from the same month last year. While homes aren't lingering longer than they were a year ago, time on the market remains an important indicator for buyers.

A home's listing history can provide valuable clues about a seller's motivation. Properties that have been on the market for 60 days or longer may be overpriced or attracting less buyer interest, making sellers more open to negotiating. Even homes that have been listed for 30 days without an offer may present opportunities to ask for a lower purchase price, seller-paid closing costs or other concessions.

Rather than focusing only on the asking price, look at how long the home has been listed, whether the price has been reduced and how similar homes in the area have sold. Together, these factors can help you decide how aggressive to be with your offer.

4. The summer slowdown could work in your favor

Buyers shopping this summer may have another advantage: the seasonal slowdown. Housing activity often cools in July as vacations, family schedules and the back-to-school season pull attention away from home shopping. June's increase in price reductions and slower pace of new listings suggests that seasonal shift may already be underway.

A slower market can give buyers more breathing room to compare homes, negotiate with sellers and avoid the intense competition that's common during the spring buying season.

If listings continue to linger on the market and price reductions become more common, buyers may find even more opportunities to negotiate on price, closing costs or other seller concessions.

5. Your local market matters most

While buyers have more room to negotiate in many parts of the country, market conditions still vary widely by region. Since the national price peak in June 2022, asking prices have fallen 7.3% in the West and 3.5% in the South.

In contrast, asking prices have continued to rise, increasing 10% in the Midwest and 12.6% in the Northeast.

That's why national housing headlines only tell part of the story. Before making an offer, research what's happening in your local market. Review recent comparable sales, track how long homes are staying on the market and pay attention to price reductions in the neighborhoods you're considering.

A local real estate agent can also help you understand current market conditions and advise how aggressively to negotiate.

How to use your leverage when making an offer

Knowing you have more negotiating power is only half the equation. Using that leverage strategically can help you secure a better deal without stretching your budget. Before making an offer, keep these tips in mind:

• Research comparable sales. Look at recent sales in the neighborhood, how long the home has been on the market and whether the seller has already reduced the asking price. These details can help you determine how competitive your offer needs to be.
• Lean on your real estate agent. A local agent can provide insights into market conditions, recent comparable sales and the seller's negotiating position to help you decide on a fair offer.
• Negotiate more than the price. Depending on the market, you may be able to ask the seller to cover closing costs, make repairs before closing or provide credits after the home inspection.
• Don't rush to waive contingencies. Unless you're competing in an exceptionally hot market, think carefully before giving up protections such as a home inspection just to strengthen your offer.
• Keep affordability first. More negotiating power doesn't automatically make a home affordable. Before shopping, determine how much home you can comfortably afford based on your income, expenses and long-term financial goals. If a home still stretches your budget after negotiations, it's better to walk away than overextend yourself financially.

Your mortgage interest rate plays a major role in your monthly payment.

Use the tool below, powered by Bankrate, to compare today's top mortgage offers:

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One of the most interesting — and truly dramatic — highways in Southern California lies due north of Los Angeles. Known as The Grapevine, it is a steep, winding, five-mile section of Interstate 5 that goes through the Tehachapi Mountains, rising more than 4,000 feet via the Tejon Pass.

While not apparent at first glance, there are several small communities along the route.

In one of them, two neighbors were locked in a struggle over the refusal of one to recognize that an "implied easement" had been established nearly 30 years ago. Similar legal issues go back — way back — to Ancient Rome and the English common law brought to America in which the basic principles of using a neighbor's property without a written deed were established.

A paradise … until he moved in

In the small mountain community, longtime readers "Jill" and her husband, "Ricky," live in a mobile home on Lot A, which they bought from "Sally" more than 20 years ago. Sally had owned that land and the adjacent parcel, Lot B, for many years. Initially, she rented out a mobile home on Lot B, but she recently sold the lot to "Matthew."

A driveway is located between Lots A and B, with a portion of it on Lot B. For more than 30 years, Sally and all her tenants, including Jill and Ricky, either walked or drove across that Lot B portion to reach the nearest road.

Aside from a forested, 45-degree downward slope that is impossible to safely walk down or drive over, there is no other practical way to reach the nearest road. In other words, without access to that portion of the driveway on Lot B, Lot A would be landlocked.

"This wonderful place was a little paradise for everyone in the area until six months ago, when Matthew became our next-door neighbor," Jill said. "Overnight, our lives became a living nightmare with his behavior."

'You are using my property without permission'

Matthew became the neighbor from hell. He'd pound on their door and send them nasty texts, demanding to be paid $16,000 for their use of his driveway.

In addition to other assorted threats that I read in his texts, he threatened to lock a gate between the two lots, which would prevent the couple from leaving their property.

I had several telephone conversations with him, and the expression "as stubborn as a mule" fit Matthew, though I would say he was as stubborn as an entire barn of mules.

Given the facts and history of usage of that driveway, in my legal opinion, he didn't have a chance of collecting 1 cent from them.

Of course, the legal question boils down to this: Could he charge them anything for walking or driving over that small section of driveway that is, indeed, located on his property?

I referred my readers to Bakersfield, California, real estate attorney Fawn Dessy, who answered that question with two words: "Absolutely not!"

Creation of an implied easement

"This common situation in rural areas gives rise to what we call an implied easement," Dessy said.

She cited a classic definition that law students never forget: An implied easement is found when a property owner was previously using one part of their land to benefit another part and then divides and sells the parcels. Its use legally continues. It is usually not written in a deed but is recognized since it is based on prior use of the land.

Dessy listed the specific legal requirements to establish an implied easement:

• Common ownership. Both the parcels must have originally been owned by a single person or entity.
• Severance. The parcels must have been separated through, typically, a sale.
• Apparent and continuous use. Before the parcels were split, the use was visible, obvious and ongoing.
• Reasonable necessity. The easement must be reasonably necessary for the occupants on the parcel that is benefited by its use, such as getting to and from a highway.

Dessy's letter to Matthew

Dessy sent a polite, yet no-nonsense, letter to Matthew, citing controlling cases and urging him to take no actions that would in any way harm my readers.

Over the next few days, Matthew and I had reasonably pleasant telephone conversations in which I tried to reason with someone whose mind was made up, regardless of the facts. Then a question occurred to me: Had he been aware of that easement before buying Lot B? Did the information appear in the listing and sale agreements?