Four Things Retirees Should Consider Before Buying a Vacation Home
By: Jim McKinley
You feel you deserve it. After so many decades of earning a living, you can finally retire, relax, and celebrate. And what’s a better way to spend your retirement years than at a home away from home, a place where you’ve always wanted to spend a few weeks out of the year? In other words, you’re looking into purchasing a vacation home.
However, purchasing a vacation home is no different from purchasing a regular home. There’s the search, the offer, financing, any renovations (which can get expensive), keeping the place maintained (especially when you’re not there), property taxes, and insurance. Even if you’ve saved well for your retirement, purchasing and maintaining vacation property can be risky, according to Lisa Brown of Kiplinger.com. Moreover, financial expert Dave Ramsey provides a list of questions you need to ask yourself before you invest in one.
However, if you’ve got the finances in place and the willingness to make it work, you can have the vacation home you want if you follow these steps.
Remember That It Is Still a Home Search
The process of searching for a vacation home is no different from the one you followed when you bought your first house. You’ll need to find a realtor who knows the market and your needs. Also, be ready to look at all kinds of properties, from the fancy and stylish to the ones that need lots of work. And since this is a vacation home, you need to consider the distance between it and your other home. Ideally, the properly should be about three hours of highway driving time away (about 180 to 200 miles) from where you currently live.
Consider Renovation Costs
Rarely will you find a vacation property that’s move-in ready, and if you invest in a fixer-upper, you’ll probably need to do some extensive renovations, especially the kitchen and the bathrooms. Will you hire a professional or take care of them yourself? Depending on the location, hiring a professional could be expensive. For example, the cost of remodeling a bathroom in Reno ranges anywhere from $5,733 – $13,925, and it costs an average of nearly $22,000 for a kitchen remodel. And if you’re going to do the work yourself, you’ll need to plan to stay a few days while you renovate. Writing at The Washington Post, Justin Pierce provides a means of estimating the cost of a renovation in terms of money and time. He suggests being extremely realistic in terms of the cost of each item you need and how long it will take you to work.
How Will You Keep the Property Maintained?
Just like any other home, you’ll need to keep the place maintained, and that ranges from keeping the grass cut to making sure the HVAC unit works. And if you buy a vacation home within a neighborhood association, you must keep your property maintained or else you could face fines from them. Since you’ll be away most of the time, you might need to hire a local caretaker or property management company to check on the property when you’re not there.
What Type of Insurance Will You Need?
Just as you would with any other home, you need to insure your vacation hideaway. Consider, though, that because of the type of property it is, and where it is located, insurance might be more expensive. To save money, the Insurance Information Institute suggests that you first try to find a property that has less risk, bundle your regular and vacation home policies, and install an alarm system, something that always reduces policy costs.
While buying a home can be complicated and stressful, buying a vacation home can be even more so with the number of other things to consider, namely location, renovation expenses, maintenance, and insurance. Still, if you can afford and maintain it, having a vacation home during your retirement is a joy you deserve for work well done.
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