Buying a second home isn’t always a luxury. In fact, it can be a smart way to plan for your retirement and where you’ll downsize in your golden years. With interest rates still low and housing prices starting to climb, now may be the time to think about buying the home where you’ll spend your retirement years.
The Vacation Home Plan
Maybe you’re not keen on retiring where you live now, but you have a favorite vacation spot that would be perfect for life after the rat race. Chances are, you’re not the only one who likes to vacation there. Sites such as HomeAway.com and VRBO.com list vacation homes for short-term rental, which could help you save on taxes. Rental income that spans less than 15 days is not taxable as income, but then, expenses for that time period can’t be used as deductions. Rental income totaling less than half the year, however, can cover up to 75 percent of a homeowner’s mortgage costs while still leaving the home available for the owner’s vacation plans.
The Downsizing Plan
Many soon-to-be retirees want to stay close to where they live now, but know they may need or want to downsize to cut down on bills, cleaning and yard work after retirement. This is an easier proposition for the highly independent investor, since he’ll already be familiar with his hometown and its desirable neighborhoods. The key is keeping your retirement cottage rented to pay down as much of the mortgage as possible before you need to move in.
The Rental Next Door
Some forward-thinking buyers think a half-rented duplex is the way to go. By living in one unit and renting out the other, it’s possible to have the mortgage, taxes and insurance completely paid by the rental unit. The catch to this retirement plan is location desirability; there aren’t many great neighborhoods for retirees that also feature duplexes, or that are attractive to renters. Of course, if you plan to rent to other retirees, that makes this option a little more feasible.
Regardless of your rent-to-retirement plan, property management is the key to making your post-work life more enjoyable and relaxing. The professionals at Class A Management can help you with market and property research everywhere in Texas. Call us today at 817-295-5959 or e-mail, info@classamgmt.com.