When the snows of winter visit the great white north, Canadians think of warmer climes. A few weeks in the sun is quite appealing. A pleasure reserved for those of us who live where the seasons change. Sitting by the cool waters of the pool or chasing a wee, white ball across a grassy meadow, we look forward to our all too brief winter getaways with much anticipation.
But, wait. When we retire we will have more than the usual two or three weeks to enjoy the sun. So how do we deal with so much free time during our cold winters? Well we can become ‘snowbirds’ spending all or part of our winters in the sun. However, there’s a catch. Maintaining a home, especially a second home, can cost money.
I’ve spent quite a lot of time in the greater Phoenix area. As a financial planner, I have some advice for those of you thinking about a getaway to the Valley of the Sun or any other major winter sun spot.
A significant expense for sun seeking seniors is housing. Be it a modest travel trailer or a luxury mansion you will face some inevitable costs. You can pull your home behind you and stay at some of the many trailer parks catering to homes on wheels. But, when your stay in the sun is measured in months rather than weeks you may want to look at something more economical.
Many buy a mobile or manufactured home and place it on a pad which they rent by the month. The northern area of the city of Mesa near Phoenix has many such parks. The big attraction is their low selling price. You buy the model home of your choice and then rent the ground it stands on from the mobile park owner. You hook up utilities and usually pay for these separately. And your ‘pad fees’ will include the land that your home sits on plus the amenities available to residents of the mobile park.
The main downside of this method of acquiring a place to live is that the mobile home depreciates much like a car. Since you don’t own the land on which it sits you won’t benefit from any appreciation which might occur. Much of the price appreciation of regular housing is in the land. Usually the price of mobile housing goes down over time even when regular housing is going up in value.
There are many such units available in the Greater Phoenix area now. However, in my opinion they are not a good buy even at low prices. There is the worry that if many units become vacant the owners of the park will increase pad rents in an effort to make up for lost revenue from vacating mobile home owners. Or possibly limit the amenities which they provide.
That leaves regular housing. Right now there are some relative bargains to be had in apartments and houses in the Greater Phoenix area.