Why buy a second home?
After your retirement you may want to move to a new place. If so, you can consider investing in a second home before you retire. This home can be located anywhere – in your neighborhood or in an adjoining county or a different state altogether. When you visit a place for a vacation you may like it so much that you really wish you could settle there. This is one of the reasons why the trend of purchasing Second Home is in vogue these days. They are in demand like never before amongst those baby boomers who are ready to invest in real estate.
For many retirees, a second home can be a chance to make the best of two worlds – their own neighborhood in which they are most comfortable and a new destination, which is fun to explore. You can spend summers with family and friends and enjoy winters in a warmer climate.
Even if buying a second home involves spending a lot more money before retirement, you will be wise to consider it as an investment. If, for example, you buy a second home five years before you retire, you will be able to earn money by renting out your property for the next five years, and cover a part of the mortgage costs.
Before investing in a second home, it will be a good idea to try renting one first in the neighborhood of your choice. Test the waters to see if the new place suits you and whether you’re comfortable traveling between your two homes.
What do the statistics say?
Many baby boomers approaching their retirement have decided to make real estate investments. Sales records for the year 2006 compiled by the National Association of Realtors revealed that of the total home sales, almost 40% were second home purchases. Most of the buyers were age 52 and above. Their approximate income was $82, 800 per year. They planned to make the second home their retirement home and most of these properties were located within 200 miles from their first homes.