The Best Advice for Retirees Looking for a Vacation Home

Stephanie Oliver
Published on March 17, 2021

The Best Advice for Retirees Looking for a Vacation Home

Reaching retirement is a major milestone. Why not reward yourself with your own oasis? Stephanie Oliver of Ferguson Realty can help make your coastal living dreams come true. If you’re ready to celebrate by investing in a place to get away from it all, here’s how to work it out so your vacation home is a blessing and not a burden. 

Sort your finances

Chances are you’re looking forward to enjoying your getaway, and that’s what it should be all about — fun, relaxation, and enjoyment. If it’s a stress on your finances, that’s bound to suck the wind out of your sails, so make sure you’re in a good position financially and budget appropriately for your new place. 

Many people expect to rent out their second home when they aren’t using it, but if you become fully dependent on that income to make your payments, that can equate to stress. On top of that, there are expenses like upkeep, utilities, and insurance. If you aren’t close by, a property manager can come in pretty handy.

With all that in mind, Financial Samurai recommends focusing on a vacation property that is a lifestyle addition, rather than a financial bonus. That way, you’re less likely to get in over your head. Plan on an investment of no more than 20 percent of your net worth. If you’re already retired, you might want to err on the more conservative side and aim for around 10 percent of your net worth. 

Hire a pro

Who will handle the maintenance at your vacation home? A stellar property manager can make all the difference in easing your mind. They tend the maintenance, cleaning, lawn care, and so forth. This ensures that someone has an eye on things when you’re far away. What’s more, your property manager can oversee booking arrangements and the check in and check out process, as well as handle any hiccups that arise along the way. 

Topping it all off, better property managers provide tools that allow you to keep tabs on your property from whatever electronic device you choose — tablet, laptop, or smartphone. You never need to wonder or worry since information is just a tap away. 

Renting your place

Beyond the general upkeep, there are some basic considerations if you intend to rent out your vacation home. First of all, you want to begin with some business basics. Choose a name for your business, determine what business structure suits your needs, and register your business with your state. 

When selecting a business structure, many people who own vacation rentals prefer an LLC. It provides tax advantages. If you decide to add a partner, it won’t require shifting your status. You can even use an LLC to purchase other properties. Launching an LLC is easy and affordable, too, since you can do everything through an online service. 

Depending on how frequently you rent the place, there are tax benefits you can glean, as well. Those little incentives can make your getaway more affordable, sweetening the pot. This rental income calculator can help you get a better feel for the overall picture, and visiting with a tax accountant can help you sort the ins and outs of what benefits you might be eligible to receive. 

You should also take into account how your insurance will be affected. Sometimes your existing homeowners policy will allow for short-term rentals, while other policies will require a rider. If you elect to rent the property for longer periods of time (like six months at a pop) or rent it out routinely, your status then changes to being a landlord. This means you’ll need a landlord policy to protect the dwelling from things like fires, storms, and so forth. For best results, contemplate your options before you dive in. 

As a retiree, it’s time to savor all that you worked hard for, and that enjoyment can include a vacation home. Decide what you can afford, who will maintain it, whether you’ll rent it out, and how that will play into the bigger picture. With some careful strategizing, your getaway can be a fun and enjoyable way to celebrate your retirement years. Schedule a call with Stephanie of Ferguson Realty today to discuss your beach home goals.

Simply go to the “Contact” page by clicking on the “About” tab above, and she’ll get you whatever you need!

This article was contributed to my blog with kindness by Lisa Walker, at NeighborhoodSprout.org. She is a mom of two boys, and created her business to help renters and homeowners, as well as as improving neighborhoods, through custom articles. Thanks, Lisa!

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