Thinking about a 2nd home for snow-birding

[merlin3942]

Hi everyone,

I'm now about 4 years into "Life after FIRE", and so far, have really been enjoying it. We started snow-birding in Florida to escape the harsh mid-west winters right after retirement, and each year, extend our visits a little more. This year we are up to about 10 weeks, and we are already looking to secure a 3-month rental for next year (we've found it's best to book the next year's rental before leaving the area this year to have maximum choice of properties). We've talked in the past about the possibility of buying a 2nd home in Florida, knowing that we'll probably never want to stay here more than 3 or 4 months max. The plan would be to reserve the place for ourselves during "high season", and then hire a local management company to rent it out and look after it when we are "back home" the rest of the year. I'm not relying on rental income to pay the mortgage on any property we might buy, but mostly to have someone looking after it when we're not there.
Any income that might produce would be "pure gravy".

So this year, we started going around to open houses, just to see what's available, how much homes would cost that we might be interested in owning, etc. We've not contacted a local realtor yet, but that will probably happen soon, as I think that would be more efficient. Before doing that, I thought I'd tap the wisdom of this board to hear about others' experiences in doing this sort of thing, before a realtor starts trying to talk me into anything. In particular, I'm wondering whether I should think about working with my mortgage banker back home to get "pre-approval" funding in place, or if it makes more sense to try and find/work with a local mortgage lender in Florida? Anyone else have good or bad experiences to relate as far as long-distance renting via property management companies?

Any/all advice, experiences, warnings, etc, appreciated!

p.s. I should mention that our "primary home" is currently mortgage free, and financially, I'm confident we can easily take on the debt and other expenses of a mortgaged 2nd home ... just trying to weigh the pros/cons of doing that, as opposed to continuing to rent. The cost of renting a place we want to stay next year for 3 months is about $15K, and I realize we could continue to do the rental thing for quite a few years for the cost of owning a 2nd home. But there are a lot of pluses to having your own place, rather than having to try and find a new place each year (seems like inventory gets less and less, and you have to start looking/booking earlier and earlier).

 

[joeea]

In particular, I'm wondering whether I should think about working with my mortgage banker back home to get "pre-approval" funding in place, or if it makes more sense to try and find/work with a local mortgage lender in Florida?

You should always get pre-approved and it makes sense to ask your mortgage banker back home about their rates first.

That said, you should always shop around for the best deal you can get for a mortgage. Local lenders in Florida would make sense, but the internet opens up lots of possibilities too.

just trying to weigh the pros/cons of doing that, as opposed to continuing to rent

For the past 8 years we have owned a second home on the beach. It's been great - more work, more expense, but tolerable. But it's only a little over an hour away from our primary residence, so we can get there quickly whenever the need arises. I wouldn't have felt comfortable owning a Florida property and worrying about getting to it should a flood or hurricane occur.

BTW, our second home worked out so well we are in the process of selling our primary residence and moving there full time.

 

[PatSea]

My wife and I are Midwest snowbirds who will be completing our 10th year of renting in Punta Gorda /Port Charlotte Harbor on Thursday and returning home. We started out renting for January but the last several years we have rented January and February. We have had the same discussion as you prior to retiring about rent vs buy. Obviously there are pros and cons to both approaches and it's not one size fits all.
We have finally found a nice home on the water, which gives us boat access in our back yard. We have rented this same home for three years and have a very good relationship with the owner. And the best part of renting is that when we leave on Thursday we don't have to worry about the house, hurricanes, replace the HVAC, security, the list goes on. The home will be waiting for us next January 1 when we arrive, and we know what to expect. We have made friends with the neighbors. I don't have access to the cost numbers but it appears the maintenance cost of a house is higher here than in the Midwest. There's lawn mowing, irrigation system maintenance, pest control, trim the palm trees, run the air conditioner year round , pressure wash for mold, pool maintenance even when the house is unoccupied.
Renting works well for us.

 

[Moemg]

The chance of renting a place in Florida off season is very low unless it is near Disney .Instead of buying a house look at condos or a house that comes with maintenance . Florida taxes for non residents is extremely high . I would consider snow birding but skip January .It is our worse month weather wise .

 

[omni550]

I bought a snowbird condo in FL in 2015. Like you, I have a paid-off home up north.

I secured a 2.89% mortgage through Third Federal https://www.thirdfederal.com/ (an Ohio-based S&L with offices throughout Florida. I'd been retired for 9 years at that point and had no issue getting pre-approved. I recommend checking them out.

I now spend 6-6.5 months in FL and sometimes return in the summer for a few weeks.

If you are considering renting out your place, be sure to check out the rental rules before you buy: some communities allow unlimited rentals, others limit rentals to 3 per year and they have to be for a minimum of 30 days, and other communities fall somewhere in between. And trust me, nosy neighbors will often rat you out, if you think you can circumvent the rules.

Places with daily/weekly rentals tend to attract a different demographic than those with long-term stays. Even if you end up not renting your place, consider that your neighbors likely might and you will be dealing with the noise, parties, etc that may ensue with transient renters.

Management companies here usually charge a 20% fee, which, when added to the state taxes on rentals, etc. really cuts down on the profit.

If you are concerned about having someone keep an eye on your place while you are gone, that is sort of a cottage industry in FL with all the seasonal snowbirds leaving their places vacant for months.

omni

 

[Cut-Throat]

Any/all advice, experiences, warnings, etc, appreciated!

You have got to ask yourself, if you really want the hassle of owning another home. The maint, upgrades etc. etc. --- Suddenly your 'vacation' turns into life back at home. Do you want to 'think about' (Worry) your place when you get home... Financially you will spend a lot more than renting.


I know, as I am a snowbird and thought about this a lot... Today I am in Hawaii.... and don't really want to get locked into 1 place..... We spent 4 winters in Florida, Then 3 Winters in the Bahamas, Last year in Australia, and this year Hawaii, next year is Antigua....



When I own a home in Florida, I will move and it will be my primary residence.. I have no desire to own more than 1 home.



It's very easy to 'Get into' real estate and usually very hard to 'get out'.

 

[superdave]

We rented in Myrtle Beach this Jan/Feb, but lost our desire to winter any more than 2 weeks at a time. We just missed our social infrastructure back home.

That being said, we did check out annual unfurnished rentals in Myrells Inlet. Beautiful new 1 bedroom apt for $950. Seemed like a reasonable way to go longer term, especially if you had a family that could use the place at times.

 

[Cut-Throat]

We rented in Myrtle Beach this Jan/Feb, but lost our desire to winter any more than 2 weeks at a time. We just missed our social infrastructure back home.

That being said, we did check out annual unfurnished rentals in Myrells Inlet. Beautiful new 1 bedroom apt for $950. Seemed like a reasonable way to go longer term, especially if you had a family that could use the place at times.

Without furniture, linens, dishes pots and pans tv..... the costs add up pretty fast.

 

[tmm99]

Without furniture, linens, dishes pots and pans tv..... the costs add up pretty fast.

Load your car with camping gear and get a dining table/chairs from Good Will? That would be kind of roughing it?

 

[EastWest Gal]

I bought a snowbird condo in FL in 2015. Like you, I have a paid-off home up north.

I secured a 2.89% mortgage through Third Federal https://www.thirdfederal.com/ (an Ohio-based S&L with offices throughout Florida. I'd been retired for 9 years at that point and had no issue getting pre-approved. I recommend checking them out.

I now spend 6-6.5 months in FL and sometimes return in the summer for a few weeks.

If you are considering renting out your place, be sure to check out the rental rules before you buy: some communities allow unlimited rentals, others limit rentals to 3 per year and they have to be for a minimum of 30 days, and other communities fall somewhere in between. And trust me, nosy neighbors will often rat you out, if you think you can circumvent the rules.

omni

If you are in Florida more than six months, aren’t there steps you can take to establish yourself as a permanent resident, thus saving on taxes?

 

[Dtail]

If you are in Florida more than six months, aren’t there steps you can take to establish yourself as a permanent resident, thus saving on taxes?

Florida is not one of those 6 months +1 day makes one an automatic resident. There are different rules to establish residency.

 

[pb4uski]

We rented for a month in Naples in 2015 and 3 months in Sarasota in 2016.... at the end of our 2016 rental we were looking for a 2017 rental about 10 minutes north of where we rented in 2016... in the same neighborhood as some friends. There was nothing to be had for the 2017 season.... but we stumbled into a FSBO opportunity.

After crunching the numbers we decided to buy. We paid cash. Our carrying costs (HOA, property taxes, insurance, power, etc. are about $8,500 a year... about 3 months rental in season. Since we paid cash, I guesstimate the opportunity cost (lost investment earnings net of appreciation) to be about $5,000 a year. We spend about 6 months here so our net cost is ~$2,250/month.

More costly than renting, but we don't need to worry if our place will be available next season, we can leave our stuff here for the off-season, and if I want to put a nail in the wall I just do it. Plus it is available for our kids or friends to use when we are not here (but tht hasn't happened so far).

From what I understand, it is harder proving that you are no longer a resident of the state you are leaving than becoming a Florida resident... but if you change you car registration, licensing, voting, homestead, banking, direct debits, etc to Florida and unclaim homestead and voting in your home state you are well on your way. We'll likely be doing this in 2020.

 

[pb4uski]

..... I have no desire to own more than 1 home. ...

I didn't either, but the condo is easy peasy... a little bit of prep for the off-season (clearing the fridge is the hard part tho we do leave some things in the fridge/freezer).... the just don't forget to lock the door.

 

[omni550]

If you are in Florida more than six months, aren’t there steps you can take to establish yourself as a permanent resident, thus saving on taxes?

Florida is not one of those 6 months +1 day makes one an automatic resident. There are different rules to establish residency.

+1

For my particular situation it's practically a toss-up financially as to where to establish residency when it comes to Michigan and Florida.

I just choose to spend ~ 6months in Florida as the weather is so delightful. And as the snowbirds are here January-March, it's really pleasant when they have flown home.

omni

 

[pb4uski]

....For my particular situation it's practically a toss-up financially as to where to establish residency when it comes to Michigan and Florida.

I just choose to spend ~ 6months in Florida as the weather is so delightful. And as the snowbirds are here January-March, it's really pleasant when they have flown home. .....

For us for now Florida residency is not better because our ACA health insurance would be a lot more expensive in Florida, wiping out any tax benefit. Once we are on Medicare, then there may be a small financial advantage for income tax savings... partially offset by higher car insurance.

I consider us 6 monthers snowbirds too... just a different breed.

 

[merlin3942]

Thanks to everyone who has responded to this thread. It is wonderful to be able to consult the collective wisdom/experience of folks on this board who have "been there, done that" in making decisions like this. We are still considering our options, but it's likely we'll spend at least one more snow-birding season as "renters" while we sort out what makes the most sense for us long-term.

 

[dm]

We ended up just moving to Florida full time. Instead of keeping a house up north we just take vacations in the summer. But there are many snowbirds so it must work for them.

We are in Punta Gorda and it’s getting crowded. And the prices seem to be going up.

 

[omni550]

For us for now Florida residency is not better because our ACA health insurance would be a lot more expensive in Florida, wiping out any tax benefit. Once we are on Medicare, then there may be a small financial advantage for income tax savings... partially offset by higher car insurance.

I consider us 6 monthers snowbirds too... just a different breed.

I'm on Medicare now.

Michigan has the highest car insurance rates (no-fault) in the US, whereas FL is 3rd. https://www.insure.com/car-insurance/car-insurance-rates.html

It still is practically a toss-up for my particular situation.

I'm now starting to think of myself as a part-time FL resident....as I own property and spend 6-7 months here.

omni

 

[RAE]

Any/all advice, experiences, warnings, etc, appreciated

When I read your post, Merlin, I had to chuckle, because you are following almsost the same exact path my wife and I followed after I retired some 9 years ago now. We rented on the Texas Gulf Coast for the first 8 years after I retired...........started renting for about 6 weeks the first winter, then 10 weeks, then 12 weeks. We live in Michigan, and it is not fun going back home in early March, to snow and ice. This year we decided to rent a place on the Florida Gulf Coast, for about 13 weeks. We fell in love with the area here, and were planning to rent this same place again next winter, when an opportunity came along to buy a house nearby for a good price. I had no intention of buying anything down here, but after several days of long discussions with DW about it, along with some other folks knowledgeable about the real estate market here, we decided to take the plunge and buy the place. It was a cash deal, so no mortgage. So now we are having some work done on the place before we head home in a few weeks, and we are excited about having our own place to come back to next winter. We will probably extend our stay to about 5 months next winter, and for every winter after that, since we have our own place now. Yes, there are maintenance costs, but we should be able to handle them in our budget, so I have no regrets about buying the place. As someone said, buying a place like this is a lifestyle decision, when it comes down to it. We have no desire to stay in Michigan during the long winters anymore, so we were going to be down here one way or another, either renting or buying a place. Continuing to rent would have been okay too, but owning a place just gives us the flexibility to come and go as we please (and leave stuff down here to use next winter also). And there are some opportunities to rent the place out during the summer months when we are gone (scalloping is big in this area from July - Sept), but any decision about that is down the road for us. I know that buying a second place for the winter months is not for everyone, but I think it will work out for us.

 

[Bamaman]

We have many ER friends with condos on the Alabama/Florida Gulf Coast that they predominantly rent out in high season--Summer. They stay at the properties after Labor Day and in Fall/Spring--when rents go down and when it's not so hot.

What's amusing is that the condos are not nearly as well furnished as well as their main homes back home. They say the renters just don't take care of their property and that they see no reason to use high quality furniture.

Most use management companies to market the rentals, and I hear no complaints about hassles keeping the properties up. The panhandle properties have most always been short term rental markets, and they don't seem to have the HOA problems that owners in South Florida might have renting out condos.

 

[Koolau]

Heh, heh, what do you call it when you live more or less full time as a snow bird but then keep a place on the frozen tundra (back home.)? Actually, we only "go back" during summer, so it's just hot and our full-time rental "hovel" in the midwest has AC. It sounds expensive to rent, but our rent costs less than our HOA dues here in Paradise. It's not for everyone, nor is such a "sweet" deal available to all. It does work for us so far but YMMV.

 

[imoldernu]

A caveat...
If you are looking for a managed community, although the price would be reasonable, understand the new hazards of owning in a manufactured home community.
https://www.npr.org/2019/01/23/6870...ers-are-upset-about-rising-costs-to-rent-land

The article erroneously describes only "mobile home parks"... To be correct, it should have included Manufactured homes, for most of the developments owned by the corporations mentioned in the article.