2nd Home Investment Property » Vacation Retirement Investment Home
Second Home - Investing in a Retirement Home Early
For those who don't plan to retire for decades, purchasing a retirement home has many benefits. For one thing, a retirement home can be used as a vacation and weekend home. And, as the kids get older, it's a great way to entice them to visit.
Retirement Home Sales
Baby boomers, still 20 or so years from retirement, have fueled a boost in vacation home and retirement home sales. According to the National Association of Realtors, reports for 2006 recorded 1.07 million vacation homes sold. Vacation and retirement home sales were up 5 percent from the previous year. Following are some interesting statistics on second homes:
- 80 percent of these buyers will use the home for vacation.
- 35 percent said they were more interested in diversifying investments.
- 25 percent said they invested for tax benefits.
- 30 percent of buyers see these homes as their primary retirement residence in the future.
- 20 percent plan to rent their vacation or retirement homes.
The Investment Decision
Many young home buyers view this as making a good decision with their personal finances. Instead of investing in the market, they are choosing to invest in their future real estate needs.
Home buyers also look at these purchases as an investment in family. Investing in a retirement home early allows them to enjoy the asset prior to retirement. Second homes are a great way to spend quality time with family and friends. In addition, the location of the second home may not be as affordable in the future.
The Cost
Second home buyers are not people tapping into their tax-deferred IRAs or 410(k) plans, they are using funds they would have put into investments with no special tax benefits.
They key question is whether you can afford to pay for your future homeownership needs today. When researching the cost, factor in maintenance, insurance and taxes, along with the price of the retirement home. If you can't afford to live in two homes, consider investing in a retirement home and renting it out. The rental income may even provide you with extra income in addition to covering the cost of the home. Although this scenario does not provide much opportunity for you to use the house before retirement, it allows you to buy in a community that may be less affordable as you near retirement. Keep in mind that unique properties, such as those located on lakes, golf courses, or in recreational settings, tend to appreciate more than those located in subdivisions.
A home is an asset as well as a source of enjoyment and satisfaction. If your finances permit, investing in a retirement home now could result in a great investment for your family in the future.
Hilary Basile is a writer for MyGuidesUSA.com. At http://www.myguidesusa.com, you will find valuable tips and resources for handling life's major events. Whether you're planning a wedding, buying your first home, anxiously awaiting the birth of a child, contending with a divorce, searching for a new job, or planning for your retirement, you'll find answers to your questions at MyGuidesUSA.com
Find tips and resources for buying or selling a home at http://buyingandsellingahome.myguidesusa.com
Source: www.isnare.com