Using Home Equity to Reinvent Yourself

The Los Angeles Times writes about baby boomers using the increased equity in their homes to finance a reinvention of their lives. Notwithstanding recent housing woes, most boomers who have lived in their homes for more than a few years have a great deal of equity and are capable of using some of that to pay for a new start somewhere else.

Take the example of former record producer Tom Werman.

"For 23 years I was out there, and for 20 of those years, I was knocking out records," he recalled. "I never thought my career would end . . . I was wrong," said Werman, who walked away from his job as an independent music producer, explaining that the business had changed and that he no longer related to it.

At that point more than five years ago, Werman, 62, and his wife Suky, 61, decided to leave their home of more than two decades in Studio City and open a high-end bed and breakfast in Lenox, Mass., a resort town in the Berkshires. The couple, both originally from the East, had visited Lenox and, when research showed it to be a popular B&B destination, took the plunge.

Today, their B&B is on an 11-acre farm, which they bought for $1.5 million. It includes four three-room suites and a two-bedroom cottage with living room, kitchen and porch. The couple live in a 2,500-square-foot unit attached to the main house. There is also a 14,000-square-foot barn. To finance the deal, the Wermans sold their Studio City home for more than $1 million and their home on Nantucket Island, Mass., for $2.5 million.

The Times article notes that despite the financial ability to relocate to a different region for a restart, it is still somewhat uncommon for baby boomers to do so. Only slightly more than 1% of people 55 and older move to a different state and the majority of those move to be closer to family.

Even if boomers decide not to take the plunge and reinvent themselves as the Wermans did above, it is always nice to know that this option exists.

Link to LA Times article (might require registration)