How to make the most of your retirement home

The 2008 housing market brought on a whole lot of foreclosures and defaults on loans. One of the positive things that have come out of this whole housing debacle is the fact that – right now – housing prices are at an all-time low.  If you are thinking of getting a new home or even a second home now that you are ready to retire, the time is now! 

There are many fantastic ways that you can find a dream retirement home and save money on the overall cost of the house purchase. One such way is by working with a company that can help you get financed at the lowest possible rate.  Or you can even consider finding a home that you can rent-to-own. Another idea is to find a retirement home that is easy to maintain, such as those within gated communities that are often in the suburbs of desirable communities.

You can save massive amounts of money on your retirement home by having the association pay for things like home and lawn maintenance, repairs and property taxes because the price is built in with your monthly mortgage payment.  It may sound like a lot at first, but if you take a look at the big picture it will save you both time and money.  The last thing you want to do is spend your retirement years raking the lawn everyday or worrying about whether your social security check will cover extraneous expenses for unexpected repairs. 

One trend we have seen more and more includes buying a home and renting it out as a second home or as a vacation rental until you’re ready to move in. By the time you are ready to retire, the home may be close to paid for.  Or at least this will significantly help to offset the cost of ownership. 

Homeowners who have another home aside from their main living home can rent it out for anywhere between 10 to 20 weeks a year and rake in an extra $20 – 30,000 of additional income.  Now that’s smart retirement investing!  Undoubtedly, many people could use that extra income right now.  That would be enough income for a retired person to live comfortably from year to year without having to pick up a part time job to make ends meet.

What’s even better news for homeowners is the new demand for rental property is skyrocketing each year. In fact, all you have to do is look at the numbers and see why retired people should consider purchasing a second home to rent out. In 2009, 66% of vacationers said they were going to use rental property instead of hotels.  For future statistics, that number has now gone up to 86% who plan renting in 2010.

When you do decide to get a retirement home, there are a couple of things to consider. First, look at the location of the home and the potential market it could be in.  Never buy a house solely for vacation purposes in an overcrowded area. Make sure the home is in a desirable vacationing place – like North Carolina – where the demand is high, but the cost of property taxes are relatively low compared to other states. Always consider and add all the money it’s going to cost you for the year, such as taxes, insurances, utilities and maintenances vs. how much money the rental home can generate for you; before you make any considerations. After you have completed these steps, you will then be ready to make the most out of your future retirement property.