Should Retiring Snowbirds Rent or Buy: Irma Provides Ample Lessons

Im having a difficult time deciding between the two. ... nice article. After selling our condo I want to invest my money somewhere safer than in stocks but don't know if buying another home is a better choice over all. All the rent or buy calculators will tell you buying is a better investment in the long run unless you can find a low cost rental. Also no options for a reverse mortgage if you rent, but then you have more privacy with having your own land and you can have as many animals you'd like. ..

I have a small condo since 2000. So far it has been cheap to keep, with HOA fees, insurance and upkeep. It is only 970 sq.ft. I would like a larger living area but hard for us to decide to buy a house or condo. I have lived with both for 40 years. It is true, you do buy with your pets in mind. Our generation need our animals. I would like to see more condos accepting more animals, but the owners are usually the ones that have to be reprimanded not the animals. Good luck to everyone.
by Mari Sept.14, 2017

What about the BIG pro of owning?......writing off your mortgage on income tax, if you have a mortgage. You don't even mention that aspect.

My flood coverage is $250,000 for the dwelling. the article states there is a $200,000 cap. Minor difference but still significant fact.

Editor's comment: Fred, you are so right. That figure was on our Fact check list and we overlooked it. Standard flood coverage is $250,000. We will correct the article and thank you so much for keeping us straight!

My reply might sound gruff (retired coach): We retired in NW Florida fully aware we could get knocked out by hurricanes, tidal surges, lightning strikes, etc. You live, you die! There are no easy outs at our end of life's spectrum so get your plans figured out, make your stand, and sprint toward the finish line! Now, get out there and live your dream. Let's roll...

We are in the process of selling our acreage homestead in Katy, Texas...an area hard hit by Harvey. We were not there when the storm went through, we were traveling in our motorhome which we purchased when hubby retired last September. We joke that the motorhome is a very expensive dog house, because it was really the only practical way to travel with 2 very large bullmastiffs. Our plan (which is always a work in progress) is to shift seasonally with the weather, keeping our home with us wherever we go and renting the space we park upon. So in a way, we are doing a bit of both owning and renting. As Mary11 stated above, we are concerned about where to invest the proceeds of the sale of our home once that occurs so we may consider buying property in one of the seasonal areas we decide to frequent. Currently Florida is our first winter trial destination, and Ontario is the summer choice.

Thanks for the article; this is a very important subject. The rent -vs- buy question is important for both vacation homes and primary homes. Everyone's situation is different when evaluating the financial, logistical & emotional aspects of this choice. But, on the financial front, renting is usually a better choice. There are a lot of rent -vs- buy calculators on the web and many of them seem to be biased in one way or another; you really have to look under the hood at the assumptions & factors they use. But, the simple analysis method that JL Collins uses (see link below) is neutral & straight forward. For full disclosure, although we have bought/sold several houses around the country, we decided to rent during retirement. YMMV. Hope this link, and JL Collins related blog posts, are useful for you.

http://jlcollinsnh.com/2012/02/23/rent-v-owning-your-home-opportunity-cost-and-running-some-numbers/

Why be a snowbird at all? My wife and I decided to move down to NE Florida, Palm Coast, full-time. The summers here are not any hotter than the summers in the suburbs in Philadelphia. And the beaches here are much less crowded and also with a lot less flying bugs trying to bite you, than the New Jersey seashore beaches, (especially on days when there is a "land breeze") which is where all the Philly suburbanites go to for their summer vacation.

I would love to find a long term rental in an active 55+ community in FL. Does anyone have suggestions where I should look?

There are a few things in your article I have to comment on. I researched the entire country when looking for a better place to live in retirement than Texas. I looked at cost of living, taxes, insurances, crime, traffic, weather, real estate, rentals, activities, etc. I originally saw the town of Green Valley, AZ on TopRetirements. I continued to research around the US and we would visit places that met most of our requirements, plus researched everything I could find on Green Valley. We wanted a warm place that was less expensive to live in than Texas and had low humidity so I could breathe. West Coast, East Coast, Florida, and North of the Mason Dixon Line were ruled out for weather reasons. The states pretty much left to choose from were Nevada, New Mexico, and Arizona. We made multiple trips to Nevada. We liked Henderson and Green Valley NV. Eventually they were ruled out because of the traffic and costs. We loved Albuquerque NM but it didn't feel right and had or could have cold weather and snow in winter. Next was to get hubby to visit Green Valley, AZ which I had researched at that time for 4 years. After visiting for a week we knew this was IT.....it felt right. In your article you state almost every are of the country has its own natural disasters. The area around Green Valley is an exception. During Monsoon, Tucson floods. but Green Valley's forefathers used their brains and drainage is excellent in Green Valley. The rains during Monsoon are nothing compared to the normal rains in Texas. No ice or snow (except on the mountain tops....not down here). Low humidity and I can breathe. Occasionally there will be a wildfire, but they are up in the mountains. Phoenix has sand storms. We don't. In fact, I can have my doors open all day and never see any dust on the furniture. As for renting versus owning........... At first my mind was made up to rent as I was sick of the high taxes, insurance, and heavy maintenance costs of owning a home in Texas. However, when I found out it would cost from $1,500 to $2,500 a month to rent a decent place, and we couldn't have our cat, thoughts shifted to being a homeowner again. Wow!! What a difference. We bought a townhome larger than our 3 bedroom home in Texas and in an even nicer neighborhood. Thanks to the 2008 real estate crash, we got it for a steal. Taxes are 1/3 of the house in Texas and insurance 1/4th. We have a beautiful Southwestern yard. Everything is less than we paid in Texas......electricity in Texas averaged $200 a month, here about $110 with the lowest around $75 and the highest $148 but most between $75 - 100. Small things like pest control...I paid 80 quarterly in Texas and $35 quarterly here. We are so thankful to TopRetirements for starting us on the right path for our Utopia. The humidity and air are such that I can breathe. Weather is beautiful...even in Monsoon as rains are short and sweet I can wear flip flops year around. Our social calendar is full. What a way to live out our final years.

Joanne, glad that you found your paradise retirement. ....I lived in Florida for 10 years and living with air conditioning for 6 months out of the year got old. Don't want to retire anywhere with temperatures more than 80 in the summer month's. The cost of living in southern oregon is comparable to Green Valley but closer to the ocean and very green. Everyone's needs are different and one place may be enjoyable for a while bUT maybe not long term. Most retirees don't usually stay in the first place that they choose. Just enjoy it as long as you can....

Wil Fetch, you cannot deduct your mortgage. It is just the interest you are paying. And they have been wanting to either limit it or cut it out altogether. I would keep a eye out on the "tax reform" being discussed right now.

I lived in Florida for several years. The town was very pretty but honestly now that I'm retired I have no desire to live there. After awhile the storms, the traffic the bugs and heat got to be a real pain. I was young and found it to be quite boring after the newness wore off. I need variety. We did consider a winter condo there for about 5 minutes then remembered, to us, the negatives out weighted the positives. My mother lived there for years. Dealing with replacing the roof, windows and car windows due to storms that we never even heard about in the north just was not worth it to me. We are considering renting for a couple of months but then we would like to try different areas of the country. I learned from a friend that winters different places all the time, she said neighborhoods change it's nice to move on if things start going downhill. And again the variety. I can't stand temps above 80 so living in a warm state all year is definitely out.

Joanne Hice, Green Valley AZ is wonderful. I am glad you found a place where you can breathe easy. Very cost effective too!! Beautiful environment. As for this article on the pro's and con's of living in Florida, my solution would be to live in an RV and evacuate with the Hurricanes. I am not one who would buy any coastal home. Flooding from storm surges is never going to be a way of life for me.

Kate, I agree with you 100%. There are many places in the US where you won't have constant weather problems. To be sure There's no perfect place but some are better than others for the long run .....I think the best option is to either rent or buy a condo that you can rent out while you are vacationing.

Right now I'm leaning toward staying in the Mid-Atlantic region away from the coast. No really violent weather here!!

As my wife and I position and plan for our upcoming retirement, we have discussed rent vs buy. We have also looked at location. We love the water and have spent many summers at the beach. We also live in Katy, TX and the area was hard hit by Harvey, but we were not damaged. The last couple years have convinced us that we want to buy on a lake and then vacation on a beach. Buying on the beach isn't a question of if, but when you are going to deal with a devastating storm. We are not interested in being homeless in retirement! So, buying on a lake, in the south with warm winters, and then you can travel wherever you want for other climates or conditions. Our kids love to ski. We won't buy a place in the mountains, just rent one for a couple weeks during the winter. My advice is to figure out your home base, spend a reasonable amount to be comfortable and then rent places for things you want to do. So much simpler with all the options these days that have already been mentioned.

For those of us who have savings we would not qualify for subsidized apartments for low income Seniors. Neither would we qualify for other government programs. However, some states, like Georgia are kind to Seniors and no longer saddle them with school tax. I have no idea what other States do that. My town in CT lowers the town tax depending on your income. The max for a married couple is $42,900, for a single it is $35,200. As usual, there is a marriage penalty. We will look into that next year. One home owner has to be 65 years old as of January. For this tax reduction assets are not counted. I believe you have to supply proof of your income tax income each year or two and if income increases, you have to pay full taxes. So, you have to be careful with savings withdrawals.

One idea that could help retired people be more comfortable financially might be to buy a multifamily house. Live in one unit and rent out the other(s). If you plan to sell your house anyway, a multifamily could be the answer. I personally hate the idea but many people do very well. I hate the idea because sounds carry through walls and I don’t want to hear people argue, babies crying, foot steps above me, loud music, smokers and having to deal with all of that. I would advise to have an attorney draw up a really good rental agreement that covered all the cons that might occur. I have also known people who have bought inexpensive condo’s and had a rental company deal with the renter. The rental company takes care of repairs, collecting rent and all the ugly stuff you might not want to deal with.
.....Louise

We purchased a beautiful, roomy, gently used RV to travel a bit while escaping the worst of our hometown's summer heat and winter cold. Most campsites with full hookups range from $50 - $70 per night. Some RV resorts are pricier, others are far less.

As noted in the article, while we humans can only be in one place at a time, bills continue to accrue in homes that we own but aren't occupying. So while $2100 per month ($70 X 30 days) for an RV site might seem high for a snowbird home, bear in mind that one pays only for the time there. No year-round HOA fees, RE taxes, utility bills, etc.

We tend to pack up and move at least every 4-5 days anyway. There are always new places to go, people to see and things to do! It's rather like picking up our mini-home and moving it to new vacation spots whenever the urge strikes. For us, this is a terrific, relatively inexpensive, relatively commitment-free vacation home.