Many people, when planning retirement, consider purchasing a second home. This often stems from a desire to explore, or to ‘get away’ from home – but without sacrificing the sense of comfort and familiarity that only a home can bring. Fancy hotels and luxury resorts are all well and good, and it’s great to have people cleaning up after you and cooking for you, but after a while, most of us start desiring our own space again. This is when having a second home, or holiday home, can become appealing.
A holiday home can provide years of fun, memories and enjoyment for your family, and perhaps also for the generations that follow. They allow you to escape your everyday life, but on your own terms. They can however, also lead to stress, worry and upset – and not just financially.
Even if you can afford a second home, should you get one? Here are 3 reasons why you might want to carefully consider your options before going ahead:
Comparing the cost of staying in your own property for a few weeks, against paying for the whole family to stay elsewhere, can make it look like an absolute steal to have your own place, and for those few weeks it probably is – but the bills still need to be paid even when you are not there. Mortgage payments, gas and electric, maintenance, decorating…it all needs to be paid for, even when you’re not there.
You’ve retired. Do you really want a new job, albeit one where you are most certainly going to be your own boss? You might be happy to take on the admin tasks for running your second home, but – presuming you are going to rent it out when you are not there – you will have all manner of tasks to action. There’s finding people to rent it, checking their references or credibility, dealing with anyone who slips through the net and doesn’t treat your property with the care you expected and managing repairs and house maintenance. If you are happy to do, or arrange, this type of handiwork now that you are retired then great! If not though, you might want to think about the costs involved in getting someone else to manage the property on your behalf.
As exciting as it can be to buy a new home, the excitement will eventually fade. Having a familiar point for family gatherings can be wonderful and we’re by no means saying you won’t love it, but as time passes, it will naturally seem less like you are going away on holiday, and more like you are just partaking in your regular routine, or walking into an extension of your regular house.
If you are set on a second property, think about the area around it too. Are you a keen golfer for instance? If so, a home near a cluster of great golf courses will ensure you always have something to do, rather than just sit at home. Do you like eating out? If so, check out the local area and be sure to purchase somewhere with a vibrant restaurant scene.
Whatever you do, make sure that your holiday home is more than just a nice house, so that you have a better chance of retaining that “getaway” feeling each time you go back.
Finally, whatever decisions you make in your retirement and wherever you decide to spend your time, make sure you contact us to keep us in the loop so that our lifestyle financial planning process can help you get there as smoothly as possible.
This article does not constitute financial advice and should not be construed as such.