Here's one facet of the real estate market you can be pretty certain of. Ten years from now, prices will be far higher than they are today.
That's particularly true of properties with spectacular views. But whether you are looking for a cottage in the mountains or a house on the beach, the place doesn't have to generate the same rate of return you demand for other investments. You are buying a lifestyle.
That situation has put people in their 40s, 50s and 60s into the market. While sales of primary residences fell last year, vacation home sales rose nearly 5 percent, says the National Association of Realtors. The typical buyer of a vacation or retirement home was 44 years old.
There's no question that second homes come with expenses, so you have to ask yourself if you can afford one. Don't rush into buying. If money is tight, however, you could consider buying now and collecting years of rent to defray your costs. For the first time in years, higher rents mean they will cover, or almost cover, the costs of mortgage, taxes, insurance, and maintenance.
The benefits of a vacation/retirement home are many. The transition from work to retirement is eased because over time you have met people and become part of the community.
Buying while you still have children at home is a plus. They look forward to being at the vacation place. As they grow up and change jobs and cities, it will always be a gathering place. It will be a place to come for a vacation and for Christmas or Thanksgiving.
In today's market, many sellers are eager to make a deal.
Milton B. Yates
www.miltonyates.com
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