After retiring from their middle management jobs with a health insurance firm, a Colorado couple had one aspiration topping their bucket list. They wished to acquire a second home in downtown Chicago, the city where they grew up.
“They wanted to live in a spectacular condo with breathtaking views of Lake Michigan and Millennium Park, a super-popular urban space with multiple art venues. This was their passion and dream,” says Rich Harty, the real estate broker representing the pair.
Harty found them just what they were seeking: a three-bedroom apartment atop the Legacy, a 72-story skyscraper within the famed Chicago Loop. There they chose a $1.1 million unit with a professional kitchen featuring huge windows.
“The deal almost fell through, until they saw those drop-dead gorgeous views from the kitchen,” Harty says.
Despite fulfilling their longtime quest for a place in Chicago, this couple insisted on retaining their big family house in Colorado. That’s because their grown children and grandkids still live nearby.
“It was only because they’d been savers who invested wisely through the years that they were able to consider purchasing an expensive second home,” Harty says.
Of course, relatively few seniors can afford ownership of two properties. Yet some who are affluent see the advantages of two-home housing in retirement.
“Retirees have more leisure time than younger people to benefit from the contrasting settings and climates afforded by dual-home ownership. Take the classic case of ‘snowbirds,’ who spend their winters in sunny Florida or Arizona and summers in cooler northern states,” says Mark Nash, the author of “1001 Tips For Buying and Selling a Home.”
But Nash cautions all seniors to think through the many implications of taking on ownership of a second home in their retirement years.
“Those who buy a second property with a fixed-rate mortgage know their principal and interest payments will stay constant for the life of the loan. But they also need to anticipate potential increases in utility expenses and insurance. Also, condo fees and homeownership charges can skyrocket,” he says.
Here are a few pointers for second home buyers:
-- Consider the upkeep burdens associated with two-home ownership.
Margie Casey, an experienced real estate broker based in the Florida Keys, says that wherever they choose to live, most retirees want low maintenance. Ideally, they like all exterior upkeep to be provided through a condo or homeowners’ association.
“People want the total freedom of ‘lock and leave’ homes,” Casey says.
Though they’re determined to retain their Colorado house, Harty’s clients had to face squarely the reality that their home has many deferred maintenance needs. Hence, they made sure they included these expenses into their housing budget.
-- Take note of the financial implications of your plan.
Casey reviewed numerous retirement communities on the website she founded: realestatescorecard.com. This helped her realize that any seniors considering two-home ownership should first discuss the financial implications with a professional adviser.
“A planner can help you calculate what you can afford and give you a second opinion on your plan,” she says.
Property taxes are also a big factor, especially if local jurisdictions are running budgetary shortfalls and may have to raise taxes.
“Once you investigate the taxes, you may decide to buy one state away from your grandchildren, assuming that lowers your cost of living,” Casey says.
-- Try to determine if condo living would suit you.
Michael Crowley, a Spokane, Washington, real estate broker, says buyers considering the purchase of a condo should exercise caution before making this choice.
“After living in a house for many years, residing in a condo is a monumental change,” says Crowley, who entered the real estate field in 1993.
To illustrate, he tells of a married couple he advised on the purchase of retirement property in Hawaii. The couple chose a condo development that seemed attractive. Before they concluded a purchase there, however, they rented a unit as a trial run.
“After a brief time renting, they realized they hated condo living. It felt way too crowded to them,” Crowley recalls.
Those contemplating a dual-home retirement plan should be doubly cautious about buying two condos at once.
“For Pete’s sake, don’t buy two condos if you’ve never ever tried living in an apartment. There’s too big a risk of disappointment,” Crowley says.
-- Review your transportation options before buying a second home.
Many a retiree has selected an ideal setting without taking into account airport access, which Casey considers a major mistake.
Relying on an out-of-the-way airport makes it harder to travel to distant locations for vacation or to see your children. It can also add to your air transportation bills, which are already rising steeply in the post-pandemic period.
“Try to live near an airport that’s a hub for one of the major carriers. That can save you a ton on air travel costs,” Casey says.
Another transportation factor to consider is proximity to major interstate roadways.
“Most retired people want to live within a two-hour drive of their grandchildren,” Casey says.
-- Lower your expectations for visits with your offspring.
Living near grandchildren is the No. 1 priority for many retirees. But Casey cautions those choosing a retirement habitat to be realistic about their expectations for how often they’ll see family, no matter how close they live.
“Your kids have busy lives. Sure, you can hope to see them often. But don’t focus your whole retirement lifestyle on seeing family. First and foremost, choose the lifestyle that works for you,” Casey says.
(To contact Ellen James Martin, email her at email@example.com.)