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My husband and I have begun our house hunt to purchase our retirement home -- 30 years ahead of time. It's not that we are long-term planners. We just know a good deal when we see it. According to CNNMoney, homes are the most affordable they have been in decades.
Here in Florida, we can purchase a three-bedroom, two-bathroom house in a nice subdivision that is less than 10 years old for just $65,000. To me, that's like buying a home for the price of two cars. If we can finance two cars, we can finance our future retirement home. The National Association of Home Builders/Wells Fargo Housing Opportunity Index recently hit a record level of affordability, CNNMoney reported.
My husband and I feel comfortable carrying two mortgages since we only have 12 years left to pay off our primary mortgage. Furthermore, rental properties are hot right now in my area. We could buy a home for $65,000 to $75,000 and rent it out for $1,000 to $1,200.
Renting to family members
We also have two sons who will be getting out of college in a few years. They would appreciate cheap rent as they are getting settled in their careers. Since we plan to reside in the home one day, we prefer to see it occupied by friends or family.
Managing our rental property
As far as managing the rental property in the next few years, I have mixed feelings. Some of my friends and relatives have rented out to people who have taken good care of their properties. A professional property manager can take care of headaches. But an unethical property manager can constantly overcharge you for "repairs" and take advantage of the situation. Some friends have said they make nothing after paying the property manager and repair costs.
Taking advantage of low rates
Still, my husband and I see the value of downsizing to a smaller home as we grow older. We won't retire for another 30 years, but we know interest rates will never be this low again. Our mortgage company said our interest rate would be slightly higher with the investment property since it would not be our primary residence. Still, the rate could be as low as 5 percent.
Staying away from 55 and older communities
I'm not interested in purchasing a retirement home in a 55 and older community even if I was old enough to do so. Buying a home in a restricted community would be, as the name suggests, too restrictive. We may want to rent our home out to a family with children. Moreover, I would rather live in a diverse community with people of all ages even when I'm a senior citizen one day.Although we could retire in place, we are having fun with our house hunt. We are avoiding homes with CDD (Community Development District) fees as well as homes that have been in foreclosure since they require too much work. We can find incredible deals on Florida homes. It's unlikely we will ever find a home in the future for the cost of two cars. So, the time to buy our Florida retirement home is now.
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