Appreciation of property values

[DougR]

We recently visited TV Lifestyle Preview Program and plan to come back for more visits - we love this place and can't wait to make the permanant move! However, I am still 10 years from retirement (give or take a couple years). If we purchase a new Villa now and primarily rent it, how much ROI (return on investment) is being seen after 8-10 years? With the Developer still building, it seems that one might have a tough time selling a used home for even a slight profit because a buyer could spend the same amount purchasing a new construction. (given that the Developer is still building new homes 8 years from now)

[ijusluvit]

IMHO, purchasing in TV as much as 10 years ahead of retirement makes it impossible to predict whether you are going to be better off than if you had waited longer to buy. You can't predict the better financial path.

OK, you love TV (join the club!). But there are a million other variables: including the number of baby boomers who want to buy here, the economy in general, the cost/return realities of renting out your place for that long a period, etc. And, will you like the place you bought 10 years later?

But maybe you're like us. We bought five years ago when we retired, but still can't spend more than a couple of months a year in TV yet. We rent our home and because it's a wonderful place and we have a good management company, we cover a lot of our expenses and can afford to improve the place. When we do come between tenants, it's like a glorious vacation. Buying when we did was the smartest thing we ever did.

So go for it! Just take your time and get the best place you can. Be sure it has good rental potential. I think it will be another year before the boomer demand and the economic climate will result in big price increases. When you do retire, whether you have a few more dollars because of when you bought will be far less important than the fun and satisfaction you've experienced by having your own place in our little paradise. Good luck!

[l2ridehd]

As ijustluvit stated, very difficult to know the answer to your question because there are so many unknowns in the coming years. However you can certainly look at history to help you decide.

1. Interest rates will probably not get any better then they are right now. So if you plan to have a mortgage, now is a good time.
2. Based on past real estate price cycles, highs and lows do occur on an 8 to 10 year cycle. Right now we are at a low with most indications being the curve is starting to move up. So with your time line, now is a good time to buy.
3. The rental market in TV is strong and there is really no indication that will change near term. So you should be able to cover 60 to 80% of your cost. With tax rules probably getting tougher that may change.
4. Based on recent deficit spending significant inflation will happen. How bad and how long is still unknown. This will also cause interest rates to rise. Also will continue to have a negative impact on employment. This will also cause home prices to rise longer term.

So based on that, if you have a secure source of income and can afford to buy now. I would.