Buying a second home and planning to use it for retirement is a risky proposal. What you will want to live in five or ten years down the road may be totally different that what you THINK you are going to want. Family, health and financial situations change – often and sometimes rapidly.
Better you should buy for appreciation and income, and buy a property that will be easy to market when the time does come to retire.
Last evening, I met a charming couple from Scotland. They were interested in investing in a condominium in Florida. Rod, the husband, told me that he would like to buy a condominium or a home here in Southwest Florida that he could rent out and eventually move into in twenty years. This is a common request that I have from investors. They would like to buy an income property that will pay for itself, not need any management, need little maintenance, and be in wonderful shape when they are ready to retire to.
This is just not practical. For one reason, it is very difficult to predict what type of home or condominium would best suit you twenty years from now. It would be difficult to pick the location, or even the lifestyle. Secondly, this market is seasonal and to expect the rental income to carry the mortgage and expenses will require quite a large down payment. I call this the “BUY NOW, LIVE IN LATER” approach.