ER Permanent Relocation vs Seasonal Rentals?

[BuzzBear]

With around 1 year until ER, we're struggling with the choice between permanently relocating to an area (e.g. Western North Carolina) that doesn't get our harsh Chicago winters....
...or staying put for most of the year, and renting a place in warmer climes during the winter.

Growing up in NY, I know the classic retirement (if not ER) pattern was to rent or relocate to Florida. But relocating to an area with so many "traditional" retirement-aged folks may not be attractive to an ER'r, right? And dropping straight south is not as obvious here in the Midwest... Arkansas? Texas?

Any words of wisdom?

Maybe we'll just buy an RV and put off making a decision...

 

[W2R]

With around 1 year until ER, we're struggling with the choice between permanently relocating to an area (e.g. Western North Carolina) that doesn't get our harsh Chicago winters....
...or staying put for most of the year, and renting a place in warmer climes during the winter.

Growing up in NY, I know the classic retirement (if not ER) pattern was to rent or relocate to Florida. But relocating to an area with so many "traditional" retirement-aged folks may not be attractive to an ER'r, right? And dropping straight south is not as obvious here in the Midwest... Arkansas? Texas?

Any words of wisdom?

Maybe we'll just buy an RV and put off making a decision...

Think about what you want in a retirement location, and what you like to do as you ponder where to ER. Then try visiting a few places!

Don't forget Tennessee and Alabama.

 

[megacorp-firee]

I'm in the same boat. ER'ed since July of last year. Spent 2 months in Las Vegas (subsidized our stay ). Rented a condo and a car. It was a blast. Then did not want to spend winter in the midwest (like you). We have been in Asia (touring and visiting family) since Nov. Will be back home in April.
We have toyed with the idea of relocating to LV. However my kids and family are predominently in the midwest. We may do that, but we would probably rent there 1st. We will ponder this this spring/summer.

One of the ideas was to rent out our house and rent in LV or vagabond around... a month here, a month there. I have the traveling bug.

So this is a very timely post. Will be interested in others opinions and ideas.

 

[BuzzBear]

Hmm, Alabama

Think about what you want in a retirement location, and what you like to do as you ponder where to ER. Then try visiting a few places!

Don't forget Tennessee and Alabama.

Thanks for the ideas, Want2Retire.

We've already started the process that you suggest, already visited the area surrounding Asheville, for example. Eastern TN has the same pretty mountains (and better taxes), but the Gatlinburg area has become a bit too touristy.

But Alabama, hmmmm. I suspect the weather there would not be right for year round relocation - my wife is one who often says "whoo, it's warm in here...", if you know what I mean. But it brings up another relocation model that we've considered: Maintaining homes in two locations - one for cool months, one for warm months. Again, I think that's a common East Coast plan, but so far, I haven't met anyone here in Chicago who uses a variant of that. Maybe I've been sheltered.

MegaCorp, we may ultimately put off making a decision and use your "bumming around" strategy. Like you, I'll be interested in hearing how others attacked this. (BTW, I presume your screen name tells a story, huh?)

 

[hankster]

We love living in the Pacific Northwest, until November thru February! I often think about the best way to have a little winter nest somewhere in the desert southwest (Arizona, southern California) I know we'll never be able to afford a second home, but I could see renting something for the winter and just flying home occasionally to see the kids, check the house and take care of odds and ends that can't be handled by phone, fax or internet. I even (gasp) considered w*rking part time in that area to help subsidize the rental expense.

Hank (Old man winter don't wanna let go this spring)

 

[Moemg]

Before we retired we looked at several places in Florida . We came on vacation several times and then rented for six months before we bought . My sister on the other hand came for a two week vacation and signed on the dotted line to build . Her decision was not so good . She is now in the middle of nowhere . The only thing going for the area is that the weather is good . I landed in a great area with tons to do and great amenities . Lots of places look great on a two week vacation but day to day living may be different . One of the things we did when trying to decide is we got the local newspapers . When we read the Venice Gondolier we knew this was the place for us .

 

[megacorp-firee]

(BTW, I presume your screen name tells a story, huh?)

Not at all. A dull semi-successful corporate drone. Never got high enough to make any major changes, but was part of the megacorp cogs and gears that made it work. My plan was to do 30 years and retire (with honors ) from megacorp and that's what I did.
I had 5 or so careers @ megacorp and rose thru the ranks. My claim to fame was I could get sh*t done within the megacorp environment. My final assignment was a HQ lackie in charge of getting other areas of the company to work together for the common good. After spending more time in this job then I really needed to or wanted to (since I knew I was pulling the rip cord @30) I was on autopilot and bored to death. In my youth, I would have looked for another job to reinvigorate myself and get myself motivated. But I overstayed my welcome in this job and lost my passion. I still did my typical A1 job, but I really didn't care anymore. I left megacorp on good terms. I was offered all sort of things to stay, but declined. Fast forward to June of 2007 and I pulled the rip cord. End of that part of my life and the beginning of FIRE.

FIRE is great. I am still figuring out how good it really is.
I highly recommend this to everyone.
Good luck to you.

 

[Walt34]

One older half-sister and her husband did the "retire and move to Florida" thing, built a very nice house there, invited everyone to visit often... but few could. Their five kids were all in their 20's - 30's and didn't have the leave time or the money to travel more than perhaps once per year.

So they gave up and moved back to northern VA. I think they could have kept both houses but not everyone (myself included) thinks two houses are worth the bother of upkeep.

 

[Midpack]

We're near Chicago and 2-4 years from FIRE, so we're in the same boat. We are narrowing our choices right now, but no place is perfect, and what might work for us may not appeal to anyone else. As for two homes (whether one is rented or not), it's more costly and whether we could afford it or not, it just rubs my LBYM underpinnings the wrong way. So we're doing some looking around over the next few years and moving one of these days.

My corollary question, everyone says to move to your new adopted town and rent for a year before deciding and purchasing a house. Obviously ideal, but sounds awfully costly with rent going into a landlord's pocket and the cost of moving belongings twice. We'll have to weigh the cost vs the risk of buying in the wrong place unless someone has a clever answer.

 

[Moemg]

My corollary question, everyone says to move to your new adopted town and rent for a year before deciding and purchasing a house. Obviously ideal, but sounds awfully costly with rent going into a landlord's pocket and the cost of moving belongings twice. We'll have to weigh the cost vs the risk of buying in the wrong place unless someone has a clever answer.

It's a lot cheaper than having to sell and move again because you hate your location .

 

[W2R]

It's a lot cheaper than having to sell and move again because you hate your location .

Exactly. It might help to consider the cost of renting for a year and moving twice (once to the rental, and once from the rental to the new house) as part of your total moving expenses.

 

[lazygood4nothinbum]

I know the classic retirement (if not ER) pattern was to rent or relocate to Florida. But relocating to an area with so many "traditional" retirement-aged folks may not be attractive to an ER'r, right?

i'm not sure where you get your image of florida, but when i google images on florida

yahoo image search "south beach" gets this:

pic credit: By rross233 on Flickr

i thought this was a gay computer; i gotta install better filters.

or when i yahoo image search "daytona beach" i get this:

pic credit: By mich-tipps.de on Flickr

fort lauderdale, you ask?

pic credit: By MrClean1982 on Flickr

yup, just a bunch of old farts waiting for god.

this message brought to you by the florida chamber of commerce. thank you for your consideration.

 

[Notmuchlonger]

Thanks Lazy.

We plan on renting in various areas we are interested in. The whole move then be unhappy seems to be the more expensive route. Then again we want to do some meandering before we settle down so your mileage will vary.

 

[RunningBum]

It's a lot cheaper than having to sell and move again because you hate your location .

Or what might even be worse, move and not like it, but not hate it enough to make you want to move, and be stuck in a place you really don't want to be in.

 

[honobob]

yup, just a bunch of old farts waiting for god.

God's in Florida?? ......Not year round tho, right?

 

[AltaRed]

I am with the posters who recommend renting first to be sure relocation works. Moving twice and paying a year's rent is petty cash compared to a buy/sell mistake. While climate is the obvious motivator to make a change in retirement, the shock of a new location and lack of friends and family interaction (if one enjoys that interaction) can be a rude awakening. They will NOT come to visit nearly often enough.

I have yet to decide whether to rent a winter home in the south to escape the Canadian winter, but I will always rent (never buy) and maybe try 2 months first, then extend that in subsequent years if it works out. I also believe I will want to try different places to see what fits best for me.

 

[chinaco]

It seems to me that the answer depends on where you want to be. We intend to rent rather than buy for several reasons.

• We want to be in our current location permanently because family lives here.
• We want to be somewhere else during certain seasons. And that somewhere else may vary.

For us renting seems to make the most sense...

 

[Midpack]

It's a lot cheaper than having to sell and move again because you hate your location.

Or what might even be worse, move and not like it, but not hate it enough to make you want to move, and be stuck in a place you really don't want to be in.

Not that clear to me.

If you rent and then buy, you will pay to move twice. So if you get it right the first time you avoid about $10K in moving costs (the second time), not to mention the inconvenience of two moves in a year.

So what's left is paying real estate commission twice vs renting for a year (a little hard to rent for less than that no?).
- Est commission second time = $300,000 x 6% = $18K
- Rent a home for a year = $1500/mo x 12 mo = $18K

So if you buy a house and get it right you save $28K (rent and second move). If you're wrong, it still costs you about $28K (second commision and second move) not to mention the inconvenience/uncertainty of having to sell the first house.

I'm making some assumptions just to put $ to the discussion, but what am I fundamentally missing?

 

[REWahoo]

I'm making some assumptions just to put $ to the discussion, but what am I fundamentally missing?

I'd say one big unknown is your assumption that you would be able to sell the unwanted home when you wanted to at a price at least equal to what you paid. That's not a given in today's market, and may not be for some time to come.

 

[Moemg]

Not that clear to me.

If you rent and then buy, you will pay to move twice. So if you get it right the first time you avoid about $10K in moving costs (the second time), not to mention the inconvenience of two moves in a year.

So what's left is paying real estate commission twice vs renting for a year (a little hard to rent for less than that no?).
- Est commission second time = $300,000 x 6% = $18K
- Rent a home for a year = $1500/mo x 12 mo = $18K

So if you buy a house and get it right you save $28K (rent and second move). If you're wrong, it still costs you about $28K (second commision and second move) not to mention the inconvenience/uncertainty of having to sell the first house.

I'm making some assumptions just to put $ to the discussion, but what am I fundamentally missing?

The first move is expensive because it's usually a long distance move . The second move is usually closer so a lot of the boxes can be moved in your car and only the furniture has to be moved . A lot of people even sell most of their furniture when considering a move like this and rent furnished . We sold most of our furniture but kept enough to furnish a small place with the basics while we looked . We also did not unpack anything but the basics until the second move . We were so glad we did it this way . We ended up in the perfect neighborhood and location for us .

 

[hankster]

It seems to me that the answer depends on where you want to be. We intend to rent rather than buy for several reasons.

• We want to be in our current location permanently because family lives here.
• We want to be somewhere else during certain seasons. And that somewhere else may vary.

For us renting seems to make the most sense...

Exactly like our situation. Mmmmm....February in Hawaii, March in Phoenix for spring training baseball, August on the NW Pacific coast to escape the hot, dry summer weather inland, etc.

 

[emi guy]

Not that clear to me.

If you rent and then buy, you will pay to move twice. So if you get it right the first time you avoid about $10K in moving costs (the second time), not to mention the inconvenience of two moves in a year.

So what's left is paying real estate commission twice vs renting for a year (a little hard to rent for less than that no?).
- Est commission second time = $300,000 x 6% = $18K
- Rent a home for a year = $1500/mo x 12 mo = $18K

So if you buy a house and get it right you save $28K (rent and second move). If you're wrong, it still costs you about $28K (second commision and second move) not to mention the inconvenience/uncertainty of having to sell the first house.

I'm making some assumptions just to put $ to the discussion, but what am I fundamentally missing?

Your assumption seems to include a cash purchase price of $300,000 (since there was no monthly mortgage mentioned). By renting first, the $300,000 that would have been used to buy the property could be used to arbitrage the monthly rental payment. $300,000 x 0.05 = $15,000 toward the rent, reducing that cost.

 

[Rich_by_the_Bay]

One of the things we did when trying to decide is we got the local newspapers . When we read the Venice Gondolier we knew this was the place for us .

What a great suggestion.

I can see where this would be a quick way to get a feel for the lifestyle, scope of recreation and other amenities, and the local priorities. And free of the hype you get when working through the promotional interests.

Plus, the same dirty laundry that sells newspapers is the dirty laundry that everyone tries to play down when you are in the real estate market.

BTW - we drove through Lakewood Ranch yesterday on our way back from Port Everglades. Pretty imposing community - huge, spread out all over, and some of the homes seemed very attractive. It definitely has that "development" feel loud and clear both for good and bad. Overall favorable impression, though.

 

[Midpack]

Your assumption seems to include a cash purchase price of $300,000 (since there was no monthly mortgage mentioned). By renting first, the $300,000 that would have been used to buy the property could be used to arbitrage the monthly rental payment. $300,000 x 0.05 = $15,000 toward the rent, reducing that cost.

Very good point, you've got me there...thanks.

 

[Zoocat]

Do you think you really need to be gone all winter? I don't like winter either, but this year a 3 1/2 week vacation in S. America did the trick for me. Broke up the winter enough so that it didn't feel like a death march until Spring.