You’ve had a nice, long, profitable career, and now it’s time to call it quits. You’re looking forward to sleeping in, much less responsibility, and lots of time to relax with your family. The only question now is where are you going to spend that time? As you consider buying a vacation home, keep the following tips in mind.

Ka Malani

Pick the Right Location

What you have to figure out when you are looking for a vacation home is what features are must-haves for you. Location is usually primary among these considerations: do you want to be near the beach, on a golf course, or near the mountains? Do you want to be in a neighborhood or in a quieter spot? Would you rather vacation in the city like Waikiki or in a more beach town location like Kailua?

You should also consider how easy it is for you to get there from your primary residence, and if it is feasible to maintain the travel long term


Pick the Right Home

Once you have settled on the general location, it’s time to drill down to identify the specific house or condo you want to buy. Start by doing research on what homes are available in the area you want. Once you have a found a few options, take a trip to visit them. Working with a local real estate agent will give you firsthand local knowledge. It’s also a good idea to spend some time in the area you’re interested in to make sure it fits your lifestyle and interests. Spend a couple of weeks in the area, or even come back a couple of times to visit.

Think about what features the house will need as you get older as well. In most cases, you’ll want a single-story dwelling so you can avoid stairs. Look for aging-in-place features such as wide doors and hallways, large bathrooms, and non-carpeted floors.


Determine Costs

Remember that along with what you’ll be paying for the house, you’ll have costs above the mortgage even when you’re not there. Property taxes, electric, gas, trash pickup, landscaping, and other maintenance services still need to be paid even if you are offsite. You also may need to pay a management company to look after the house while you’re not there, especially if you are planning to rent the house out (long-term, 30 days or more, of course) when you’re away. This is one cost that’s worth paying. You don’t want to show up for a nice, relaxing weekend away and find that a burst pipe has ruined your floors.

Please note Transient Vacation Units (TVUs) have been prohibited outside of resort zones since 1986 in the City and County of Honolulu.  TVU’s are not permitted for less than 30 days.  It is critical to do your research to see if the condominium association allows for subleasing if you plan on purchasing a condo.  And, if buying a home, you must consider the neighbors and neighborhood.  (Please see DPP FAQ's and for more information.) 

One last cost you’ll want to keep low is insurance. Second homes are generally viewed as more risky than primary homes, so you may find insurance costs to be steeper than you expected. If your new vacation home has a security system installed, that may save you a few dollars on your policy. You should also check to see if you can get a cheaper rate by bundling this new insurance policy with other policies you have with the same company.

You can also make some of your money back to pay for these costs, especially the mortgage, by using your vacation home as a rental property when you’re not there. Just be aware that if you go this route, you’ll need to make sure the home has plenty of amenities to attract renters, such as a full kitchen, cable TV, internet access, and a washer and dryer. For modifications that you can’t do yourself, you’ll need a contractor. Ask around for recommendations, then communicate every detail of your plan with the contractor you decide hire.

A vacation home can be a tremendous idea for retirees to consider. Following the tips above will give you a good start on finding your dream home. You have worked hard, and it’s time to enjoy the fruits of your labors.


** Article guest written by Jim McKinley, Jim is a retired banker, and loves helping people make the most of their hard-earned money.  

Photo credit: Erin Evans with C21 Island Homes of Ka Malani in Kailua, HI