A Value Proposition?
With nightly rates at these properties starting at $200—and often costing upward of $750—snowbirding at a resort year after year can easily cost more than a down payment on a beachside villa. Still, it’s not as financially reckless as it sounds.
According to real estate consultant Jonathan Miller (a former Bloomberg columnist), the real estate market is softening in many seasonal-stay destinations, largely due to the advent of services such as Airbnb and Onefinestay. And monetizing a vacation home through these services isn’t for everyone. In cases in which properties sit dormant for months, owners can end up wildly out of pocket, particularly when you factor in down-payments, renovations, insurance in hurricane-prone markets, monthly parking or homeowners association dues, taxes, and other costs.
“There’s no way it makes sense to own an apartment unless you’re spending a significant amount of time there,” adds Miami-based Merrill Lynch financial advisor Patrick Dwyer about South Florida, largely considered the country’s snowbird mecca. “But even then, you’re still losing. The myth that you’re going to make money on your property is just that. Interest rates are going up, which makes the opportunity for your capital investment in real estate more challenging. Being able to go from resort A to resort B is better than locking into a fixed cost as you get older.”
With that in mind, the Leopolds have no doubt about what next winter will bring. “We intend to come back here: in the same way, in the same room, and living the same life,” Stephen says.
The Rathes will boomerang back to Belmond La Samanna, and Sea Island will welcome a repeat guest in Wyatt, as well.
“Before I retired, we drove to either Florida or South Carolina—but always just for a week or two,” she says. “Now that I’m able to make the trips longer, next year I think I’ll do three months. Before you know it, I’ll probably live here.”
This article provided by Bloomberg News.