Lots of people buy their retirement home well In advance of retiring. Who knew? Before I started our Sarasota area property management company back in 2012, I had no idea that so many people shopped for and purchased their “someday” retirement homes well in advance of actually moving down to Florida. It’s quite common! I estimate that roughly 20% of the properties that we lease and manage belong to out-of-state owners who plan to retire to their property within the next 3-5 years.
A small minority do this with the intention of renting the property out seasonally and using the property themselves during the off-season. But the majority realize that what looks good on paper doesn’t necessarily translate well to the real world. Typically, the expense of furnishing, servicing, and keeping the utilities active year-round, plus the excessive wear-and-tear that inevitably occurs with high-turnover properties like vacation rentals, makes renting annually the more practical and financially sensible choice for most. Especially when it is a home that they plan to move into someday.
Some Real-World Examples
Example #1: For a couple of years we’ve managed a Sarasota townhome in the “Soliel” community for a Pennsylvania owner who decided to take a look at some new construction while on a vacation visit. He purchased the property knowing that it would be several years before his retirement, but he liked what he saw so much he decided to go ahead and buy early. His real estate agent recommended that he work with us and we’ve been managing the property since the completion of the build.
Example #2: A Northeastern owner and his wife purchased a beautiful Lakewood Ranch property in anticipation of their retirement several years from now. We’ve been managing this property for a few years, and we’ve installed excellent tenants.
Example #3: The owner of a Palmer Ranch lakefront townhome recently moved into his property from Chicago. We leased and managed the home on his behalf for three years, and he couldn’t be happier with the experience.
Not Your Typical Investment Property
As property managers and property owners ourselves, my team and I at Real Property Management of Sarasota & Manatee understand the nuance of managing these types of pre-retirement investment properties. While a hard-core investor might be most concerned with the numbers (e.g., vacancy rates, net operating income, cash-on-cash returns, etc.) the owners of these types of properties have an added layer of concern — they love their properties and are one day going to move in and call them home.
This type of owner might be willing to forgo an extra dollar of profit if it means ensuring a good quality tenant at a fair rental price. As the owner, it is imperative that you choose a property management and leasing company that understands this nuance. The property manager you choose must be willing and able to provide an extra degree of TLC and attention to detail to ensure a well-maintained property, and an optimal tenant fit.
What To Look For When Seeking a Property Manager
If you are considering purchasing a home in the Sarasota – Bradenton – Venice – North Port area before your retirement, you’ll need a good property management company to care for the property in your absence. As someone trained as an attorney who has been in the business for 30 years, here are some things I suggest you consider when talking to prospective managers:
- Are they dedicated property managers, or are they primarily a sales brokerage company that does property management on the side? Ask them what percentage of their business they dedicate to property management, and what percentage they dedicate to sales — if anything less than 95% of their business comes from property management, you might want to consider another company. (HINT: 50/50 isn’t good enough — you want a dedicated property manager.)
- Are they members in good standing of N.A.R.P.M. (National Association of Residential Property Managers)? In my opinion, anyone who calls themselves a professional property manager, but who fails to join the National Association of Residential Property Managers, is automatically suspect. The purpose of the organization is to raise the standards within the property management industry through training, standardization of industry best practices, and the promulgation of a property manager code of ethics. I have yet to meet a top-notch property manager that was not a member of NARPM.
In Conclusion
More and more people are choosing to pre-plan their retirement by purchasing their ‘one-day, forever home’ several years in advance. They are finding that teaming up with a great property management company that is familiar with the nuances of such circumstances is a great way to get on the right track early and ease the transition when retirement eventually comes.
Your Next Steps
If you need property management and/or leasing services, but don’t exactly know what all it entails or how to get started, I am happy to speak with you. You can contact me here, or you can call my message line at 941-216-0005 – I will return your call.
More and more people are choosing to pre-plan their retirement by purchasing their ‘one-day, forever home’ several years in advance. They are finding that teaming up with a great property management company that is familiar with the nuances of such circumstances is a great way to get on the right track early and ease the transition when retirement eventually comes.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
