My original post on financing a second home in retirement is now too old to add comments to, so I'm creating this new follow up post.
I'm commenting on the process of finding a place to buy, my thoughts about the place I chose, and how I plan on financing it.
My goal:
- Find a second home to purchase in an area that I like, and figure out the best way to finance it as a second home in retirement.
What I did:
- I rented from VRBO in January and February in two areas of Florida that I was interested in based on multiple factors. (Venice/Sarasota, and Bonita Springs).
- I looked at about 10 properties while I was vacationing down there.
- I ended up making an offer, and I'm in the process of purchasing a slightly older (1989) town home in the community that I stayed at in Bonita Springs.
My comments/thoughts about the home I'm buying:
- I really liked the town home as soon as I walked into it. I also stayed in this community for a month in a different town home, and I very much enjoyed the area, and people I met living there.
- The town home has a big open main level floor plan with a beautiful screened in porch, a big outdoor private patio with tropical bushes and plants all over, and a sun deck off of the upper level master bedroom. All facing the south. I want lots of sunlight all winter.
- It does have both bedrooms upstairs, so it is not a single level. The bedrooms are large, and they have their own separate bathrooms. There is also a half bath and laundry room on the main level.
- The main level has beautiful large tile floors throughout.
- I wanted a two car garage, but it only has a single detached.
- Some updating will make it even better, but it is perfectly acceptable as is. It came furnished, so I can use it right away, and change the furnishings more to my liking over time.
- I'm obviously excited to have a place to stay in warm weather throughout the winter months. I'm basically diving head first into being a snowbird.
- The association for the town home seems to be run well. Everything looks well maintained. The costs have been kept very low in my opinion, and they cover the lawn care and the maintenance of two beautiful community pools. One of the pools is a short walk from my place. I believe this is a much better setup to leave unattended for 6 months, compared to a private home.
- My plan is to keep my main residence in Minnesota. I have too many social connections there. The town house was priced low enough that I can afford to keep and maintain both places.
- I'm looking at this as a winter cabin. I already have friends and family talking about visiting me down there, and I would like that. Even if that doesn't happen, I will be much more active in the winter in the warm climate of SWFL. I'm walking or bike riding outside every day, and visiting the pool or beach most afternoons. I still like home projects, so I will have a place to work on at my discretion. I also very much enjoy coffee out on the patio in the mornings, and possibly a few drinks out on the porch in the evenings before dinner. That isn't happening in Minnesota in January.
Financing:
- The price was low enough that I could just pay cash, but I would use up all of my liquidity and Roth accounts doing this. I don't like that idea.
- I'm going to put 20% down, and take out a new mortgage against my paid off home in Minnesota. The rates are still very low. I went through a pre-qualification process, and they acted like it will not be a problem. So far, so good. Maybe worse case I will have to put more cash down.
- I still have the option of selling or downsizing my main residence in Minnesota if I feel financially tight with the new payments. I haven't had a house payment in 20 years. I think I will be fine.
Thanks for all of your previous comments, and of course I would enjoy hearing opinions on what I've gotten myself into.
Take care, JP
I'm commenting on the process of finding a place to buy, my thoughts about the place I chose, and how I plan on financing it.
My goal:
- Find a second home to purchase in an area that I like, and figure out the best way to finance it as a second home in retirement.
What I did:
- I rented from VRBO in January and February in two areas of Florida that I was interested in based on multiple factors. (Venice/Sarasota, and Bonita Springs).
- I looked at about 10 properties while I was vacationing down there.
- I ended up making an offer, and I'm in the process of purchasing a slightly older (1989) town home in the community that I stayed at in Bonita Springs.
My comments/thoughts about the home I'm buying:
- I really liked the town home as soon as I walked into it. I also stayed in this community for a month in a different town home, and I very much enjoyed the area, and people I met living there.
- The town home has a big open main level floor plan with a beautiful screened in porch, a big outdoor private patio with tropical bushes and plants all over, and a sun deck off of the upper level master bedroom. All facing the south. I want lots of sunlight all winter.
- It does have both bedrooms upstairs, so it is not a single level. The bedrooms are large, and they have their own separate bathrooms. There is also a half bath and laundry room on the main level.
- The main level has beautiful large tile floors throughout.
- I wanted a two car garage, but it only has a single detached.
- Some updating will make it even better, but it is perfectly acceptable as is. It came furnished, so I can use it right away, and change the furnishings more to my liking over time.
- I'm obviously excited to have a place to stay in warm weather throughout the winter months. I'm basically diving head first into being a snowbird.
- The association for the town home seems to be run well. Everything looks well maintained. The costs have been kept very low in my opinion, and they cover the lawn care and the maintenance of two beautiful community pools. One of the pools is a short walk from my place. I believe this is a much better setup to leave unattended for 6 months, compared to a private home.
- My plan is to keep my main residence in Minnesota. I have too many social connections there. The town house was priced low enough that I can afford to keep and maintain both places.
- I'm looking at this as a winter cabin. I already have friends and family talking about visiting me down there, and I would like that. Even if that doesn't happen, I will be much more active in the winter in the warm climate of SWFL. I'm walking or bike riding outside every day, and visiting the pool or beach most afternoons. I still like home projects, so I will have a place to work on at my discretion. I also very much enjoy coffee out on the patio in the mornings, and possibly a few drinks out on the porch in the evenings before dinner. That isn't happening in Minnesota in January.
Financing:
- The price was low enough that I could just pay cash, but I would use up all of my liquidity and Roth accounts doing this. I don't like that idea.
- I'm going to put 20% down, and take out a new mortgage against my paid off home in Minnesota. The rates are still very low. I went through a pre-qualification process, and they acted like it will not be a problem. So far, so good. Maybe worse case I will have to put more cash down.
- I still have the option of selling or downsizing my main residence in Minnesota if I feel financially tight with the new payments. I haven't had a house payment in 20 years. I think I will be fine.
Thanks for all of your previous comments, and of course I would enjoy hearing opinions on what I've gotten myself into.
Take care, JP
