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Want to buy my home in retirement now
Old 02-09-2012, 06:58 PM   #1
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Want to buy my home in retirement now

I am planning to retire early in about six or seven years and I am thinking seriously of buying my retirement home now for cash given the historically low prices. I have been thinking of the Port St Lucie area. I plan on renting it out until I retire. Has anybody done this? What do you think?
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Old 02-09-2012, 07:20 PM   #2
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Has anybody done this? What do you think?
We're hanging on to a huge hunk of dead equity because there's no compelling reason not to, and our daughter might want it in 20 years. It returns about 4% cash-on-cash for our efforts. Five years ago that seemed pretty stupid. Now it seems a lot smarter. Five years from now... I don't know.

We live in an area surrounded by military bases, and we've had great tenants with low maintenance expenses. Can you look forward to similar conditions? Will the money you'll save now be greater than the money you'll spend over the next 6-7 years taking care of an investment property? I guess a portion of that analysis would depend on whether you plan on mortgaging your retirement property or the opportunity cost of paying for it in cash.

Another minor issue might be the possibility that you'll feel obligated to spend every spare moment there over the next 6-7 years taking care of the property.
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Old 02-09-2012, 07:48 PM   #3
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A rental house can be a pain. I know, I've had one.

I don't have a crystal ball, but I don't think housing prices will change that much. ...and even though you're considering retiring in 6 or 7 years, a lot can happen during that time (lifestyle, opinions, etc..).

Don't rush into a decision. Just my 2 cents.

Good luck with whatever you decide to do.
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Old 02-09-2012, 08:06 PM   #4
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Thanks so much for the replies. I have the same concerns about maintenance and the responsibility for a rental in another state. However, I feel that we probably wont have the opportunity to buy so low again.
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Old 02-09-2012, 09:27 PM   #5
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If you decide to buy now and rent it out, a property manager to oversee the property and handle EVERYTHING will be a necessity for you. When the cat is away, the mice will play. That also applies to landlords and tenants, and the further away your are, the more they will play. Your property manager should be very selective in vetting prospective tenants. Also, don't forget about those hurricanes, so you will need plenty of insurance. Good luck.
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Old 02-09-2012, 10:31 PM   #6
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I think you need to look at what price the properties where selling for at the high of the market to understand the high mark for values. I also think you need to plan on doing an overhaul of the house in 6 years when you plan on taking the tenants out to start using it. Keep in. Mind th cost of the repairs and management along the way. Personally I really like the idea if the numbers make since based on the potential savings subtract the cost to overhaul and repairs along the way. I do think that values will rise over the next five years. The question really is how much. That being said any time you can buy something you and at the very low of the market it is worth considering. Especially when you are buying for cash and know you will want to buy soon anyway.
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Old 02-10-2012, 05:41 AM   #7
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I am planning to retire early in about six or seven years and I am thinking seriously of buying my retirement home now for cash given the historically low prices. I have been thinking of the Port St Lucie area. I plan on renting it out until I retire. Has anybody done this? What do you think?
Have you lived in this area and are you certain it fills your retirement location needs? There is nothing wrong with your plan as long as the numbers are realistic, but there is also no reason to believe real estate prices are going to increase anytime soon, so there is no need to rush.
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Old 02-10-2012, 06:04 AM   #8
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My two cents: We've looked at owning a second home in FL for a long time. We decided that renting a place for our 'wintering' 3 months a year works best, despite low property "opportunity" prices.

Our concerns: 1) we're still relatively young and might want to winter (or summer) someplace else from time to time. 2) hard to manage long distance 3) FL is still in flux...I'd hate to fly in after a few months to discover that some creepy neighbors moved in...with the foreclosures, you're never sure who will move in next door. 4) etc.

We'd rather just pony up our $10K for 3 months in a nice beachfront and walk away till next year.
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Old 02-10-2012, 06:48 AM   #9
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How about just a decent size lot now at a good/strategic location? The assessed tax will be low without a house on it yet, and you can sell it later if you do change your mind (as long as you don't overpay for it at the first place). OTOH, the lot/land in St. Lucie area is not cheap. Some 2-1/2 acres are still being listed over 1 mil. A half acre one is listed for 20k. But without further information, it's hard to say it's a good deal or not.
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Old 02-10-2012, 10:36 AM   #10
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These are all really good input. I have a lot to consider.
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Old 02-10-2012, 11:07 AM   #11
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These are all really good input. I have a lot to consider.
While it's a great time to buy in many regions, like others have said, there's probably no rush. Prices aren't likely to increase much if at all in the next few years (or more) and neither are interest rates (if a mortgage is part of the plan). You have time to research and solidify your plans...good luck.
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Old 04-05-2012, 04:42 PM   #12
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I've been thinking about the same thing, but have decided to wait for perhaps a year or so, and educate myself about the area I'm interested in in the meantime.

Every housing article I read (that isn't written by realtors) suggests that things are going to get a lot worse for the housing market before they get better.

Americans brace for next foreclosure wave | Reuters

Inventory has come down and prices have stablizied and are even moving up slightly in select pockets here in No. Cal., (Silicon Valley is experiencing another tech boomlet, for example), but with unemployment still high generally and another wave of foreclosures on its way, I don't see any reason to rush.

I'd be delighted if someone could convince me otherwise though...
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Old 04-05-2012, 05:27 PM   #13
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I would concentrate on finding the perfect location instead of buying something now in anticipation of prices rising soon. I bought a retirement condo in 2002, still work part time, and do not rent it. I don't regret buying back then because I knew exactly where I wanted to buy, but I could buy the same place now for approx 30k more. BIL bought 60 acres with a house last year and now doesn't want to rent it. He's having a hassle maintaining a second home. Unless there is a runaway price increase, I would explore all possibilities before I pulled the trigger.
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Old 04-05-2012, 07:29 PM   #14
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I would concentrate on finding the perfect location instead of buying something now in anticipation of prices rising soon. I bought a retirement condo in 2002, still work part time, and do not rent it. I don't regret buying back then because I knew exactly where I wanted to buy, but I could buy the same place now for approx 30k more. BIL bought 60 acres with a house last year and now doesn't want to rent it. He's having a hassle maintaining a second home. Unless there is a runaway price increase, I would explore all possibilities before I pulled the trigger.
You are so right about this.
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