The snowbird lifestyle used to be largely reserved for retirees. But in the wake of the pandemic, more people are working remotely full time. This gives people of all ages the opportunity to split their time between two cities or locations. Often, those who primarily reside in the northern part of the country choose to escape to regions with warmer weather during the wintertime months.
This setup won’t work for everyone. You may be a remote employee who can work from anywhere, but if you have school-age children, being a snowbird might mean having to pull your kids out of school or homeschool them for months on end. However, if you don’t have those constraints, the snowbird lifestyle may work for you.
Some people who call themselves snowbirds own a home in a northern state and escape for a month or so to a warmer short-term rental. For the purpose of this discussion, when we talk about being a snowbird, we’re talking about owning two different homes. Here are some benefits and disadvantages to being a snowbird you’ll want to keep in mind.
[How Snowbirds Can Prepare Their Homes For Winter Vacancy]
Pro No. 1: Building Equity in Two Homes
When you own a home, there’s the potential to sell it at a profit over time. When you own two homes, you have that opportunity times two.
Ivan Chorney, partner and real estate advisor of the Ivan and Mike Team at Compass in South Florida, has seen some property values skyrocket in his neck of the woods. If you can afford to own a second home, it gives you more financial options down the line.
Pro No. 2: Guaranteed Lodging Whenever You Want It
Chances are, you’re not the only one who likes to escape the cold. If you own a second home in a warm-weather destination, you can travel there on a whim, says Chorney. You don’t have to worry about not being able to find lodging, nor do you have to stress about paying an arm and a leg for a weekend hotel room.
Larry Mastropieri, a real estate broker in Boca Raton, says that in his area, “It can be hard to find a rental when you want it. … If you’re not ahead of the game, you might get shut out for a months-long rental.” When you own a place, you’re guaranteed lodging whenever you want to pop down.
[What to Consider Before Buying a Vacation Home]
Pro No. 3: A Second Social Network
When you own a home in any given area, you’re likely to get to know your neighbors and make friends over time. The benefit of owning a second home in another area is building a second social network.
“You know everyone on the same street. … You get to know the same people and develop relationships with them,” Chorney says. That can make for a more fulfilling experience than a series of different short-term rentals in your preferred warm-weather destination.
Mastropieri agrees. “You can build two separate communities, which is kind of cool,” he says.
Pro No. 4: Potential Rental Income
If you’re only using a second home for a few months out of the year, you have the potential to turn it into an income source. You’ll need to proceed with caution when going this route, which opens up a lot of questions about maintenance issues and becoming a landlord. And you should be aware that depending on the type of second home you buy, you might struggle due to restrictions placed by your condo board or homeowners association. But you may have a chance to pocket a nice amount of cash if you buy a home in a popular warm-weather locale.
[READ: How to Convert a House to a Vacation Rental.]
Pro No. 5: Diversified Investments
Many people consider their primary home an expense, not an investment. And for the purpose of investing, they put money into stocks, bonds and similar assets.
A perk of owning a second home, Chorney says, is that you’re diversifying your portfolio. It’s not easy to sell your primary home in a crunch, because you’ll be stuck without a place to live. But should the need arise, you could always sell your second home and pocket the cash. Having the option to wait out high interest rates, or rid yourself of a pricy mortgage, is an advantage in the current economic climate.
Pro No. 6: Owning an Asset You Can Pass Down
Both Chorney and Mastropieri feel that owning a second home in a warm-weather area you enjoy spending time in can be beneficial from an inheritance perspective.
“If you’re committed to the area, your family loves it. … You can buy a property that stays in the family,” Mastropieri says. “If you can afford it, there can be sentimental value.”
On the other hand, if you don’t invest in that second home, and your kids have the desire to vacation or spend time there once they grow up, it may not be affordable to them without having free lodging available.
Con No. 1: The Expense of Having to Maintain a Second Home From Afar
Any time you own property, you have to maintain it. But it can be challenging and costly to maintain a home you’re not occupying for many months out of the year.
Most of Chorney’s snowbird clients pay for a property manager to oversee their homes while they’re not there. “They tend to have somebody who’s coming by to check on the house once a week,” he says. But Chorney also warns that even if you hire a property manager, things could happen in between those visits.
“Even if you have cameras and a security system, there’s always a risk to not having people in the house every day,” he says.
Mastropieri echoes this sentiment. “There’s headaches around all of that, managing a property from afar.”
Con No. 2: The Feeling That You’re Wasting Your Money
In Chorney’s experience, one pitfall of owning a second home is not using it as much as expected. That, he says, can feel like throwing money away. This especially holds true for people who buy a condo as a second home and pay a monthly fee for different amenities they may not use regularly.
Mastropieri says that if you’re not confident you’ll use your second home much, the cost to rent on occasion could be significantly cheaper. “If you’re a snowbird and not using your property, you’re spending a huge amount of money,” he says.
Con No. 3: Being Limited to the Same Destination Year After Year
Maybe you’re a New York resident who loves to escape to Miami. That may be true for now. But what if you grow tired of the food and entertainment scene after a while?
When you own a second home, you’re committing to that locale. You may not be able to afford a short-term rental someplace else for a season if you’re covering two separate mortgages already.
“Owning in a second place means you’re obligated to go there over and over again,” Mastropieri says. But your lifestyle preferences could change over time. You don’t want to end up stuck in a location that no longer works for you.
Con No. 4: Struggling to Rent Your Property and Risking Damage
If you’re only able to use your second home for a limited amount of time during the year, you might consider renting it out when you’re not there. But Mastropieri warns that you might face some hiccups with this plan. In addition to local restrictions, there’s the risk of sustaining property damage in the course of multiple short-term rentals.
“It’s people messing your stuff up,” he says.
Mastropieri points out another issue you may encounter is “You want to use your place whenever everyone else wants to use it.”
Chances are you’ll be looking to rent out your home during the season when demand is lowest, since you’ll probably want to occupy it during the prime season. You might struggle to find tenants on that schedule. If you’re someone who would be reliant on rental income to afford your second home, you may want to opt for a series of seasonal rentals you return to year after year.
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10 Pros and Cons of Being a Snowbird originally appeared on usnews.com
