Note: This is Part 1 of a 2 Part series. Part 2 is “The Worst Places to Retire: Weather and Natural Disasters“.
September 14, 2017 — The devastation caused by Hurricane Harvey in Texas and Irma in Florida will provide many painful lessons for snowbirds and Sunbelt retirees. Those experiences impact where to live, what type of housing to choose, and whether to rent or buy. This article will explore those factors. We are grateful to Alan E for suggesting this topic. See bottom for more related articles on renting vs. buying and natural disasters.
Where to live
Almost every area of the country has its own set of natural disasters to worry about; it is hard to find a place that is immune to at least one of these: earthquake, hurricane, tsunami, blizzards, floods, sinkholes, tornadoes, droughts, wildfires, etc. When it comes to choosing a place to retire, it really boils down to picking your poison.
Over the long term Florida and Texas have had more devastating hurricanes than anywhere else, although in recent years New York, New Jersey, and Connecticut had more. Because Florida is a peninsula with coasts on three sides, the entire state is vulnerable. There is relatively little high ground – the highest point in the State is Britton Hill, a towering 345′ above sea level in the Panhandle.
Obviously the State has many attractions – except for Hawaii it has the warmest winters in the U.S., many towns offer very affordable living, and there is a huge variety of communities to choose from.
If you choose Florida to retire in, sooner or later you are going to face a hurricane, which will include wind, flood, and tornado hazards. There is not much high ground to choose from, but you can study FEMA maps and other flood records and try to avoid places that have a history of flooding. A city might successfully avoid a bad hurricane for a long time, but eventually its number will come up.
Type of Housing
If you are buying, here is where your careful due diligence can pay off. Mobile and manufactured homes offer the most affordable housing choices, but as Irma victims are finding out, they are the most vulnerable. Obviously newer models built to stricter safety standards fare better. Single family, attached homes like townhomes or villas, and high rises generally offer more protection – depending on how and when they were built. A lot has to do with location – if the land is low or unprotected, the damage will be worse.
Knowing when your home is built and what type of protections it provides is critical. Wind resistant windows, shutters, and other types of protection are essential, yet many older buildings do not have them. It is important to know when the home is built and to what code. Newer homes have much more stringent standards that can prevent roofs from blowing off and walls coming down. Some features can be retrofitted, but that process can be expensive.
Living in a community with a Home Owners Association might offer more protection than living on your own. That is because the Association probably generally insures the outside of condominiums. Most of the time you will still be liable for damage to the interior from wind and flood. If shared facilities and other resources are damaged, at least the expense of repairing them will be shared.
Wherever you live in Florida, insurance against wind and flood will be expensive. Often it is available only from the insurer of last resort, Citizens Property Insurance Corp.
Lessons from Irma
Hurricane Irma provides a good lesson on the advantages of renting vs. buying, whether it is a second home if you are a snowbird, or a year-round residence. If the rental you reserved for this coming winter was damaged you might be out of luck for a place to spend the winter (and possibly lose your deposit). But you would be free to try to find another (which are probably in short supply). On the other hand, if you own a place that is damaged, your problems have just begun. It might be a total loss, and chances are you are either uninsured or don’t have enough coverage (flood insurance is usually capped at $250,000). If it is damaged, you are going to scrambling to find materials to protect it, secure and vet a contractor, and worry. Not to mention that you probably won’t have a place to live this winter either!
Buying vs. Renting – Pros and Cons
Is it better to buy a place than to continuing to rent? Countless snowbirds and retirees are wrestling with this issue. Here we will attempt to lay out some of the key issues to help cope with this conundrum.
Cons of Buying (which generally make them pros of Renting)
These are some of the big negatives that come with buying a place for the winter. Most of them reflect the negative sides of the beauty of renting, which is truly Lock and Leave. If something bad happens to the property you are renting, like a hurricane – it is not your problem!
– Cost of entry. The biggest disadvantage that comes with buying is, obviously, the cost. Assuming you are a snowbird and live somewhere else the rest of the year, do you have sufficient free capital or borrowing power to own two homes?
– There is risk. If there is a hurricane or other natural disaster, and these do tend to occur fairly frequently in areas with warm winters, you will have to pick up the pieces. If the damage is severe enough, you might not even be able to repair it sufficiently to be able to live there yourself the next season.
– Your investment sits idle a great part of the year. Although in some resort markets you might be able to rent your home or condo in the summer months, that is generally not the case. Which means you have a valuable asset that costs money in taxes, air conditioning, utilities, and maintenance – even when you are not there. You also have to insure the property and pay Community Association fees year-round.
– Maintenance issues. Whereas if the pool malfunctions when renting it is the landlord’s responsibility to fix it, if you own the place you now have a big headache. This also applies to finding your weed and pest control service, etc. And, every so often you are going to have to upgrade your furnishings, paint, put on a new roof, or replace an expensive air conditioning unit.
– If you end up not liking your town or community, you are stuck. Now you either have to suck it up or move, which is always a hassle. On the other if you are renting, your exit is easy and automatic. And, you get an easy opportunity to check out an area without making a major investment.
Pros of Buying (and negatives of Renting)
– Number 1, you will have a place to live. That brings considerable peace of mind. It also eliminates the danger of losing a place you really like – when the owner decides to spend more time there or rent to his brother-in-law.
– Minimum hassle. You don’t have to wait to hear back from landlord, or scramble through VRBO or realtor sites trying to identify possible rentals. It also avoids traipsing through multiple inspection tours.
–No rent increases or annoying landlords. You are the landlord and in control.
– Plenty of storage. Your bikes and other toys, your spices, and a set of clothes are all there. Unless you have pets, you can usually fly back and forth in the spring and fall. You avoid a 3 day drive in an overloaded car loaded with all your stuff.
– Room for your pets. It is generally quite hard to find a rental that will accept pets. And although most community associations have some pet restrictions even for owners, you stand a much better chance of bringing along Felix or Fido if you own your own place.
Hurricane Irma highlights all the advantages of renting your retirement home instead of buying it. But the many problems our friends have had with rentals over the years (although there are plenty of happy situations too), we can understand why many boomers are tempted to buy a winter home and avoid the rental market. It is a difficult decision with many competing factors. To help everyone understand these issues more clearly, we hope our Members will share their experiences and outlook in the Comments section below.
PS – one of our readers asked about how to find a rental in a new location. Here was our advice:
First of all, renting before you buy is a great idea. There are lots of good ideas in the related articles below. With AirBnB, VRBO, and HomeAway it is easier than it used to be, particularly for short term rentals. Seasonal and monthly rentals can be tough in hot snowbird markets.
What Do You Think?
Do you plan on renting or buying? Does Hurricane Irma, a warming planet, and rising sea levels make you change your mind? Use the comments section below to post your reactions and thoughts. What does your crystal ball tell you?
Worst Places to Retire on Basis of Weather and Natural Disasters
Cost of Renting vs. Buying in 10 Cities
Time to Rent or Buy?
Snowbird’s Dilemna: Rent or Buy?
Baby Boomers Face a Dilemma: Buy or Rent
How to Retire in Style and on a Budget
Should You Buy or Rent (Kiplingers)