By Les Christie, CNN Money

Friday, October 21, 2011

Taking advantage of today’s beaten down home prices and record-low rates, baby boomers are buying their dream retirement homes — years before leaving the workforce.

“We’re seeing people purchasing homes five, six, seven years or more ahead of retirement,” said William Filbin, a Re/Max broker in Marco Island, Fla.

It’s an opportunity that’s hard to resist: Home prices nationwide are down 32% from their mid-2006 peak, according to the S&P/Case-Shiller home price index. Meanwhile, mortgage rates are at historic lows with the 30-year fixed-rate hovering around 4.2%.

The question is: What to do with the property when you have so many years to kill before retirement?

To help cover the expenses of an extra mortgage and other bills — like utilities and property taxes — some pre-retirees are renting their homes out on long-term leases; others who bought in vacation hot spots rent to vacationers, said Mike Sannes, a Keller Williams broker with Big Bear Real Estate in San Bernardino County, Calif.

It doesn’t always cover all the costs, but it helps.

Here are six couples who decided to take advantage of today’s market in order to get their dream retirement home now.

Living large on the water for less

Courtesy: Re/Max Results Realty, The Campbells
The Campbells plan to rent out their Marco Island, Fla. home until they are ready to move in.
Name: Pat and Lisa Campbell
Where they bought: Marco Island, Fla.
Ages: 50 and 46
Price they paid: $510,000

Pat Campbell and his wife, Lisa, weren’t planning to retire for at least a decade, but when they saw a contemporary ranch house with its own dock and a pool on South Florida’s Marco Island, they knew they had found the place they were going to spend their golden years.

The four-bedroom, 2,100-square-foot home’s value had come down significantly since the housing boom. In 2007, real estate website Zillow valued the home at nearly $1 million. The Campbell’s paid half that amount. Not only that, but the couple landed a 30-year fixed mortgage with an attractive 4.62% rate.

With two kids in high school, however, the Campbells won’t be quitting their jobs and moving in anytime soon. Instead, they plan to rent out the place for a month or so at a time. They’ll also use it for their own vacations.

Renting it out will require active management, though — booking time with guests, hiring cleaning services and maintenance workers. Pat has a simple solution for the problem: “My wife is going to handle all that,” he said.

Overnight success in Sun Valley

Courtesy: Elkhorn Springs; The Whytes
The Whytes didn’t think twice before buying their condo in Sun Valley, Idaho.
Name: Jerry and Karen Whyte
Where they bought: Sun Valley, Idaho
Ages: 70 and 68
Price they paid: $310,000

Jerry and Karen Whyte will admit that the decision to buy their Sun Valley, Idaho retirement condo may have been a little hasty. But they have no regrets.

“We were in Palm Springs over the holidays when my son-in-law called me from Sun Valley and told me ‘If you’re interested, you better come right now,’” said Jerry, a financial adviser in Huntington Beach, Calif.

So the couple did. They packed up the car and drove 900 miles overnight to see a two-bedroom condo that had been marked down from $650,000 to $310,000 after being on the market for three years.

Taken by the “spectacular mountain views” and the terrace, they bought the place the next day.

Jerry doesn’t plan on retiring for another three years, but the Whytes figure they will still get plenty of use out of the place during vacations, holidays and other special occasions; both their oldest and youngest daughters live in the area.

Patience pays for a lakefront mansion

Courtesy: Meadows Realty; The Ambroses
Mike and Debbie Ambrose waited two years to buy this lakefront mansion in Weirsdale, Fla.
Name: Mike and Debbie Ambrose
Where they bought: Weirsdale, Fla.
Ages: 64 and 56
Price they paid: $455,000

During a vacation in central Florida in May 2008, Mike and Debbie Ambrose fell in love with a beautiful 5,000-square-foot four-bedroom home on three acres on Tiger Lake. But the $1.25 million asking price was too steep. Plus, neither of them were ready to retire quite yet.

Over the course of the next couple of years, however, the market eroded and the house failed to sell. By March 2010, the home’s price was slashed to $455,000 and the Ambroses &mdash now closer to retiring &mdash pounced. They landed a 4.5% rate on their mortgage, which only sweetened the deal.

Mike plans to retire next year. Debbie, who is eight years his junior and a massage therapist, wants to keep working once they make the move from their home in Stamford, Conn. She figures even laid-back Floridians could use a massage every once in awhile.

A million-dollar condo at a fire-sale price

Courtesy: The Jumets; The Sage
Jan and Julie Jumet couldn’t resist buying a luxury condo in downtown Scottsdale, Ariz.
Name: Jan and Julie Jumet
Where they bought: Scottsdale, Ariz.
Ages: 45 and 45
Price they paid: $490,000

Jan and Julie Jumet started dreaming about retiring in Scottsdale six years ago while visiting some college friends.

At first Jan, a financial adviser who runs his own business, thought buying a retirement while they were still in their 40s didn’t make good financial sense. But then the housing bubble burst and the couple struck gold.

The Jumets found a high-end, two-bedroom, two-bath condo in downtown Scottsdale within walking distance of all the best shops and restaurants.

Units like this one were intended to sell for close to $1 million, said Jan. But since the original developer went bankrupt, the Jumets paid about half that amount. They even got incentives, such as a three-year warranty on repairs and two years of homeowners’ association dues. “We lucked out with this market,” he said.

Over the next five years, the Jumets plan to gradually spend more time in Scottsdale, especially in winter when the temperatures at their current home in Darlington, Pa., dip well below freezing.

And since Jan can work remotely with most of his clients, he plans to start building up a client base in Arizona as well.

Until they move in full time, the couple is considering whether to rent out the place when they’re not using it for their own vacations.

Finding a silver lining to a tragedy

Courtesy: Meadow Realty; The Elrods
Carol Elrod said buying a house in Ocala, Fla. is like owning a “piece of the rainbow.”
Name: Gene and Carol Elrod
Where they bought: Ocala, Fla.
Ages: 66 and 65
Price they paid: $165,000

Two years ago, Gene and Carol Elrod’s retirement plans took an extreme turn. During an ope

ration to repair an aortic tear, Carol started bleeding out. The incident left her a paraplegic.

The Elrods realized they’d now need a place where Carol could easily get around in a wheelchair — no carpets or stairs — and with smooth access to the outside so she can get fresh air.

When talking about their future home, the couple immediately thought of Florida, where they had often visited. “My mother and I for years would get off the plane and the first thing she would say is ‘We are now over the rainbow,’” said Carol. “If she was still here today I would tell her that I now own a piece of the rainbow, and it is bright, warm, magical and a wonderful place to be.”

Not only that, but the central Florida town is especially affordable after being hit hard by the housing bust.

In June, the couple bought a 2,000-square-foot three-bedroom home for just $165,000. The house has a swimming pool and a screened-in porch. Even more importantly, it’s all one level and has tile flooring so Carol can maneuver her wheelchair with ease.

The couple hopes to move into the place full time in about two years when Gene retires from his job as a human resources executive with a regional drugstore chain. Until then, they’ll continue to live up North most of the year, using the Florida property as a vacation home.

A bargain by the beach in Delaware

Courtesy: Coldwell Banker Resort Realty; The Mikolajczeyks
Stan and Donna Mikolajczeyk got more house than they expected for in Lewes, Del.
Name: Stan and Donna Mikolajczeyk
Where they bought: Lewes, Del.
Ages: 52 and 45
Price they paid: $325,000

Stan and Donna Mikolajczeyk didn’t think they’d be spending their retirement in such a big home, but the market offered them the opportunity to think bigger than they had originally planned.

“Our intent was to downsize, but we fell in love with this place, which is the same size — 2,500 square feet — as our house now,” said Donna Mikolajczeyk.

The couple just signed a contract to buy a place in Lewes, Del., a short trip from Rehoboth Beach.

Home prices have come down in the area by close to 20% and the price of this house fell 10% since it was first listed late last year. The Mikolajczeyks locked in a rate of 4.01% for a 20-year loan.

Donna, who works as a secretary in the nursing department at Danbury Hospital in Connecticut, doesn’t figure she’ll retire for about seven years. Stan, though, is eager to leave the 13-hour days of running his Brooklyn supermarket behind.

Until they move in permanently, Donna has a plan.

“I would like to rent the place out for six or eight weeks during the summer,” said Donna. Even though the house is a few miles from the beach, it can still bring in rents of $1,500 to $2,000 a week during the high season, which would pay for a lot of the expenses, she said.

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