Thoughts Behind a Vacation/Retirement Home

September 02, 2010

Well we made it back in one piece, fully rested and ready to take on the world.  Well at least our decision on what to buy and where to buy.  So here’s our verdict: we are going to purchase a house that we can visit occasionally (vacation) and also retire to.  (Remember, my wife wants to retire ideally in 5-7 years.)  This creates an additional component to our decision.  We don’t want to necessarily foot the entire bill for the mortgage, insurance, possible HOA, etc, so this home will also need to be in a location that will provide us with rental income from other vacationers.  And who said financial decisions like this were easy?

Now that we know what this home is for, we need to decide where we are going to buy. Being beach people, we decided that we would like to, at the very least, have an ocean view and ideally be within walking distance.  Having decided this, the decision turns back to the financial aspect.  When we look at any investment choice, it is always about the fundamentals for my wife and me.  Fundamental 1: Does the investment match your goal? Yes, we want a home close to the beach.  Fundamental 2: Do your homework.  This is where we are at now.  What area(s) will allow us to find a place close to the ocean that we would enjoy living in and additionally would provide us some good rental income to offset our costs of owning?  Our short list includes areas of Florida and Texas.  How did we come up with these two?

First, we had to recognize that while my wife wants to retire, I don’t plan on it for a much longer time, which means we have to stay relatively close to a major airport.  Second, we need to look for areas that are not overpriced, as we cannot be overly reliant on rental income – we will be working our numbers as if we didn’t have rental income.  And finally, we need to be in an area that provides us both the active lifestyle and social interaction that we both enjoy.  That’s how we decided on Florida and Texas.  Now we will need to visit both internet sites and actually go to areas that meet our specs.  Fun!

Stay tuned for Part 3, where I will show you how we make the numbers work (hopefully!).