Snowbirds Can Face Financial Decisions

By Deborah Jeanne Sergeant

Named for the migratory fowl they mimic, human “snowbirds” spend the colder part of the year in warmer climes and their summer up North. Living in a different state for the winter feels like an extended vacation and can allow upstaters to enjoy other benefits as well.

In many ways, snowbird living seems like an ideal retirement, except for one: the cost. Maintaining two residences can double living expenses.

“You have to contemplate where you want to own real estate if you want to buy something,” said Randy L. Zeigler, certified financial planner and private wealth adviser with Ameriprise Financial Services, LLC in Oswego. “Weather and weather patterns are changing. I have people who rent a summer home up here. Or some who have an RV and rent a lot. I’d say generally, the way to keep the costs down is to stay away from tourist spots.”

While the southern home is vacated, homeowners could also lease it to others, a strategy which Zeigler has observed helping snowbirds mitigate expenses. This is particularly effective if the home located near a desirable vacation hotspot or other attraction. This arrangement allows people the ability to travel during their summer in the North, such as renting different vacation homes or use an RV. However, fully equipped RVs cost as much as a standard house and the cost of fuel and maintenance can be high also.

When selecting the location for purchasing a home, “you’ve got to look at things like crime rates, real estate taxes, trends in real estate taxes in that area,” Ziegler said. “If you’re going to buy real estate, look at the community, population changes and trends. Is it growing or shrinking? What are the negatives and positives of the area and what will attract people in the future so you can resell it?”

He also encourages snowbirds-to-be to consider their healthcare needs and options. Some insurers will not cover non-emergency care in other states, for example. Checking with a plan administrator can help ensure sufficient coverage.

Robert A. Rolfe, financial advisor with Harmony Financial Services in Oswego, said that a lot of retirees are looking at Arizona.

“It’s very dry in the winter,” he said. “It’s hotter than blazes in the summer. There are the traditional folks who go to Florida or to buy or rent a mobile home in a park. I’ve had more talk about the Carolinas every year. And Tennessee is growing in popularity. Texas, Colorado, Louisiana and Mississippi are areas not as popular, but are good places to go. You want to find areas you want to enjoy but aren’t as popular. The panhandle of Florida is less expensive than the city areas.”

Visiting a few different areas can help future snowbirds decide what will work for their purchase some day. For those who decide to rent, Rolfe advises against renting through a real estate agency or booking company, as these charge fees. Online booking is much less expensive.

His clients represent a mix of people who rent during the winter, some who store an RV in the South for their summer dwelling and some who buy a second home in the South. Although buying can represent an investment, renting eliminates maintenance and increases flexibility if the snowbirds decide they want to try a different area. RVs offer many options.

Rolfe advises clients to begin planning early for their future snowbird life.