Quote:
Originally Posted by MNViking
Good morning, I am seeking information from those who are more seasoned and experienced than myself in this area. Allow me to paint the scenario, and if interested I would value input, and thoughts or considerations I may have not looked into or even thought of.
Situation: Age 55, with a wife of 42. Looking to purchase in the Villages and do not want to spend more than $300k for a home down there. This would be a second home, and used as such, not sure of renting it out yet as the distance of caring for and who to watch over it may/may not be an issue. That being said, it will eventually be our retirement home, and visits until that time, or we are allowed to work from our current jobs and office down there. That is neither here nor there for the conversation. (Unless something is valuable I should know.)
I owe less than $105k on current home.
I have roughly $150K sitting fairly liquid to use on a purchase of the home down there to minimize the mortgage loan.
Questions and thoughts I am seeking are:
Should I pay off the current home, and not have the mortgage, and take out the full mortgage on the future retirement home and put at least 20% down to avoid PMI on that home?
Do I not pay off the current home, and then put $100k+ on the down payment on the future retirement home? Keeping roughly $40k+ in a money market for any boo-boos that may occur for a rainy day fund?
I am trying to ascertain the info to help make a better education decision for the finances, and since I am not in that industry, I don't know what I don't know. Therefore the questions may not be right?
Feel free to ask questions and I will check back and respond. What decisions did you all make, or what are the thoughts on what is best?
I appreciate the information?
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If you want to think about this as your actual retirement home, you might wan to wait until you have the resources to buy your dream home. If you are ok with this being purely an investment that you stay in 4-6 weeks a year, that would hopefully appreciate in value, adn that you might sell-up in the future, then that would be a easier way of looking at it.
I'm assuming that the 4-6 weeks that you want to stay here would be in the Jan-March window, which is the most lucrative window for landlords here.
So you are looking at fully furnishing the house, and doing short term rentals through a local property manager, and all the associated expense, but taking away about $4-$6k in gross profit right off the top.
Summer months rent for less than $2k/mo if at all. But if you have a pool you can still get some AirBnB traction in the summer. The least expensive pool home right now is $340k.
From a pure short-to-medium term investment and headache perspective you would be better off putting that money in a HYSA or CD or something, as others have said. But if you think that hard assets will appreciate a lot in the coming years and you don't already have real estate investment in your portfolio then it is still worth considering.