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Should You Buy a Snowbird Home for Retirement?

Abby Hayes

As you approach retirement, you get to decide where you would like to live. Many retirees prefer to stick close to home, especially if they have family and close friendships in their current community. But some people also want to escape to a better climate when the weather turns chilly. You might be able to live near family and escape the snow by buying a second home to use during the coldest winter months. Here's how to decide if you should purchase a second home for retirement.

[See: Best Places for Snowbirds to Retire.]

Benefits of Buying a Second Home in Retirement

The main benefit of owning a second home in retirement is the flexibility of residing in a specific location whenever you want to. You can take off for your vacation home at the time that suits you best, and you can stay as long as you like. Here are some other benefits to consider:

Possible profits. A second home in a desirable area could be a money maker as an investment. If you buy when property values are rising, your second home could turn into an asset, and you could sell if your retirement portfolio falls short later. Plus, you could rent one or both of your homes when you aren't living there, bringing in extra income throughout retirement.

A sense of community. Some retirees don't want their snowbird experience to have the same sense of anonymity as a vacation. Settling into a second home lets you get to know your neighbors and the community, so that going to a warmer location feels like coming home.

A place for family to gather. Empty nesters often want to provide a place for friends, children and grandchildren to gather. Having a second home in a great location gives you the opportunity to host family vacations and gatherings easily and affordably.

[See: 10 Retirement Hot Spots in the U.S.]

Issues to Look Out For

If the thought of a permanent vacation home near your favorite beach or mountain appeals to you, a snowbird retirement home may be just what you need. But before you decide, consider these potential downsides:

Additional costs. A second home comes with all the same expenses as a first home, including a mortgage, taxes, maintenance and furnishings. Be sure to count the costs before you invest in a second home, and make sure you can balance out those costs with rental income or pay them with your retirement budget.

Maintenance on two homes. Maintenance is costly, and it also takes time and energy to handle. You will need to stay on top of ongoing maintenance needs for two homes and coordinate services, sometimes at a distance. You might try to do some of the home maintenance yourself, but that could cut into your time for relaxation.

Lack of flexibility. Having a second home gives you the option to take off on a vacation whenever you want. But it may also lock you in to vacationing in only one location. If a second home ties up too much of your retirement income, you may be unable to afford to travel to exciting new locations.

[See: 10 Tips for Finding a Great Place to Retire.]

What Works Best for You

Having a second home in retirement works wonderfully for some people, and it may be an excellent investment. But the expense and maintenance aren't worthwhile to everyone. If you decide to purchase a second home in a snowbird location, rent for a year to get familiar with the market there before you buy. Come up with a detailed plan for financing, maintaining and perhaps renting your second home well before you purchase it. If a second home turns out to be too much work, it's much easier for those who rent first to walk away.

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