Considering that mortgage rates maintained an upward trajectory in June, hitting 6.92% for a 30-year-fixed-rate loan, and the current average price of a home in the U.S. stands at $360,681, according to Zillow, now is a great time to rent. Not to mention that in most of the nation’s largest cities, renting is now far cheaper than buying. 

Here’s a quick look at the top five cities where you can get the most out of your renting experience in 2024.

1. Charleston, SC

For the second year in a row, Charleston takes the top spot as the best city for renters thanks to a strong local economy and affordability. Charleston also has a lower cost of living than the national average, various career opportunities from leading employers and thriving tourism. The city also offers spacious apartments, green spaces, great schools, museums, fitness centers and cultural events that are attractive to renters.

2. Atlanta, GA

Atlanta claims the second spot in this year's report thanks to a strong local economy and high scores for the overall cost of living and housing. Atlanta also has a career-focused mindset with steady income opportunities for renters with major employers like Delta Air Lines, Cox Enterprises, The Home Depot, and UPS. It has a cost-of-living below the national average, large apartments and plenty of opportunities to get involved in a thriving community. 

3. Sarasota, FL

Sarasota, FL, comes in third on RentCafe’s list of best cities for renters in 2024. Ranking fifth in cost of living and housing and sixth in local economy, Sarasota just may be the perfect spot for renters looking for a city that offers a good work/life balance. The city has spacious, high-end apartments, gorgeous green spaces and quality schools. Thanks to companies such as PGT Innovations, Xfinity and Sun Hydraulics, renters have many career opportunities to choose from, and Sarasota’s thriving arts scene ensures that renters never get bored.

4. McKinney, TX

McKinney, TX, takes the fourth spot, ranking high in cost of living, housing, a higher quality of life, high-end apartments and quality schools. McKinney is an excellent choice for renters who want to escape the hurried pace of a large city without compromising on urban comfort. The city has become a big draw for both young professionals and students.

5. Scottsdale, AZ

Scottsdale, AZ, rounds out the top five best cities for renters in 2024. “The West’s Most Western Town” is a promising option for renters eager to balance work and leisure. It is a picturesque city in the heart of the Sonoran Desert and home to numerous resorts, restaurants and boutiques. The average size for an apartment in Scottsdale, AZ, is 952 square feet, but that can vary greatly from one complex to the next. Studio apartments are the smallest and most affordable options for renters. The list of largest employers is topped by companies in the healthcare and tourism spaces. There are also abundant opportunities for entrepreneurs.

What are the best places in the U.S. for renters to live in 2024?

Based on population, cost-of-living, apartment size, occupancy rate, share of new apartments and high-end apartments, these are the top 25 best places for renters in 2024.

1. Charleston, NC
2. Atlanta, GA
3. Sarasota, FL
4. McKinney, TX
5. Scottsdale, AZ
6. Round Rock, TX
7. Austin, TX
8. Chapel Hill, NC
9. Gilbert, AZ
10. Miami, FL
11. Charlotte, NC
12. Raleigh, NC
13. Fort Lauderdale, FL
14. Rochester, MN
15. Huntsville, AL
16. Greenville, SC
17. Plano, TX
18. Orlando, FL
19. Wilmington, NC
20. Durham, NC
21. Boise, ID
22. Marietta, GA
23. Denver, CO
24. Sioux Falls, SD
25. Jacksonville, FL

Best cities for renters in the South

With nearly half of the cities in RentCafe’s ranking located in the South, it’s no surprise that renters are flocking to warmer temperatures, a lower-than-average cost of living, spacious apartments and a high share of newly built units in these top ten southern cities.

1. Charleston, SC; 
2. Atlanta, GA 
3. Sarasota, FL
4. McKinney, TX
5. Round Rock, TX
6. Austin, TX
7. Miami, FL
8. Chapel Hill, NC
9. Raleigh, NC
10. Charlotte, NC

Best cities for renters in the West

Renters looking for cities where they can work hard and keep fit — the best of both worlds in the West, and home to 32 of the 150 spots on RentCafe’s list.  Here’s the top ten.

1. Seattle, WA
2. Boise, ID
3. Reno, NV
4. Salt Lake City, UT
5. Westminster, CO
6. Colorado Springs, CO
7. Denver, CO
8. Scottsdale, AZ
9. Phoenix, AZ
10. Gilbert, AZ
    

Best cities for renters in the Northeast

Competition is making it harder for renters to snag an ideal apartment in the Northeast. However, the region stands out with desirable locales such as Stamford, CT, and Boston, which rank high in quality of life. The top ten cities for renters to live in 2024 in the Northeast include:

1. New Haven, CT
2. Albany, NY
3. Pittsburgh, PA
4. Harrisburg, PA
5. Philadelphia, PA
6. Allentown, PA
7. Stamford, CT
8. Providence, RI
9. Buffalo, NY
10. Boston, MA

Best cities for renters in the Midwest

Meeting the needs of renters with affordable housing, a robust local economy and quality of life, the Midwest claims 27 cities on RentCafe’s list. These cities rank in the top ten.

1. Saint Paul, MN
2. Minneapolis, MN
3. Rochester, MN
4. Sioux Falls, SD
5. Madison, WI
6. Omaha, NE
7. Lincoln, NE
8. Ann Arbor, MI
9. Columbus, OH
10. Kansas City, MO

For more in-depth, customized data and charts, see the full report from RentCafe here. 

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Non-traded REITs proliferated in the decade after the real estate crash of 2008-09. Individual investors placed money with these groups largely through independent financial advisers and, in return, were told to expect distributions for a number of years after which the REIT would pursue liquidation of the portfolio or list to go public. The focus and energy were on raising equity, with investment and operations seemingly an afterthought. Their results were poor, underperforming public REITs and direct, private investments, with numerous examples of complete losses of investment.

After the collapse of American Realty Capital in 2014, other failures and accompanying arbitration awards led to a dramatic decline in non-traded REIT investment. Several years later, though, a number of large publicly traded financial firms entered the space, raising huge amounts of equity through the name-brand wirehouses instead of independent broker-dealers. A twist from the previous non-traded REITs is that this new structure is perpetual, with no planned exit.

While these newer sponsors differ in that they are experienced real estate investment companies with the institutional knowledge, infrastructure and track record to be successful, there are considerations investors in these perpetual-life non-traded REITs should be aware of.

Issues that investors need to know about

Share valuation issues. Current non-traded REITs offer monthly or quarterly share valuations, which are used to calculate both the price at which new investors come in and at which existing investors may endeavor to redeem and cash out. The share transaction price, or net asset value (NAV) per share, is solely determined by the company, which employs third-party valuation advisers, but the ultimate NAV is at the sole discretion of the company and is portrayed as exact.

NAV calculations are not exact and can be far from. Take for example a property declared to be worth $100 million. This is an approximation. No matter how experienced and smart the REIT principals are, that $100 million really means somewhere between, say, $95 million and $105 million. Leverage, in turn, magnifies that disparity. If the above property has 50% leverage, the equity is $50 million. If the ultimate value of the property is $95 million, that equity is worth $45 million. At $105 million, the equity is $55 million. This roughly 10% swing in property value, leveraged, translates to closer to a 20% swing in share equity value. NAV calculations are a good guess of what the share price should be, but they are far from perfect.

Legacy assets acquired at market peak pricing. When investing in a perpetual-life non-traded REIT, one is not investing in the real estate market as it sits now. A good portion of the real estate may have been purchased several years ago, which currently coincides with the peak of this last market pricing run-up. Some non-traded REITs have been slow to adjust their valuations — where overall commercial real estate values have fallen around 20% since November 2022, some non-traded REITs have stated much lower declines, perhaps materially light even taking into account different property-type allocations.

Current investors in a perpetual-life vehicle may believe they are getting into the market at this attractive time, taking advantage of the pricing correction that occurred over the last two years. But with many of those properties purchased at 2021 and 2022 market peak pricing, the assets are likely worth less now than what was paid for them.

While hotels and student housing bought in 2021, for example, may have been good investments as the COVID pandemic beat those property types down, conventional apartments and industrial/warehouses were likely much less so. There could be a good reason why the REIT’s legacy investments are currently attractive. Just don’t take the often shared “it’s better real estate” or “we’re really good managers” as a sufficient answer.

Questionable liquidity. Liquidity (the ability to get one’s investment capital back) in newer perpetual-life non-traded REITs is touted as sort of “no problem,” with passing reference to quarterly liquidity up to some percentage of assets. However, as we’ve seen over the last year, the ability to get your money back and the price-determining mechanism for such are not ideal.

While liquidity is offered, in practice an investor essentially must apply for an equity redemption, which could be approved fully, in part or not at all. Potential investor need for liquidity aside, this removes an important ability of investors to react quickly to changing market conditions, up or down, or changing views of the sponsor.

Dilutive nature of redemptions. Redemptions if met often strain the finances of the non-traded REIT to the detriment of remaining investors. The older REITs, which underperformed, at least had a stated target of company liquidation or public listing after some period. With today’s perpetual non-traded REITs, you get liquidity at the REIT’s sole discretion.

Often the REITs do not have the cash to perform on redemptions, requiring dilutive repayment of current equity with capital coming in from new investors. Note there is a cost of new equity in the form of commissions to financial advisers, so the net new cash to the REIT will always be less than the amount of cash redeemed.

Another way REITs handle redemptions may include sales of assets into poor market conditions or placing of new debt on properties at high interest rates.

None of these equity redemption methods is helpful to the remaining shareholders.

Conclusion

The major sponsors of today’s largest perpetual-life non-traded REITs are generally successful groups with decades of experience successfully managing institutional equity in closed-end real estate funds. They’ve got the institutional capabilities needed for success and strong track records. However, the four structural concerns noted above regarding perpetual-life non-traded REITs are only just now being tested, and the jury is out on how well it will go.

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If you expect to stay put for a while, even a minor remodeling project can enhance your enjoyment of the space. And if you plan to put your house on the market soon, you can give it a competitive edge by painting, updating lighting fixtures and appliances, or even refreshing a bathroom or two before listing it. 

Tips for sellers

If you’re making upgrades in anticipation of putting your home up for sale, do your research first to make sure it’s money well spent. After all, not all fix-it projects yield the same return on investment — and why plunk money down on a project that won’t provide a reasonable return when you sell?

“If you have a house that looks old or worn, your potential buyers will discount their offer by their estimate of what it will take to bring it up to par,” says Mari Adam, a certified financial planner in Boca Raton, Florida. “But while it’s great to make your house look fresher and up to date, you don’t want to over-improve it or do idiosyncratic projects that won’t appeal to a potential buyer.”

One way to help get the most value for your remodeling buck is to consult an experienced local real estate agent. A local agent understands the market, knows what’s selling and what’s not, and is familiar with the homes that will compete against yours. He or she knows what it will take to present your home in the best possible light and can make suggestions of projects to improve its marketability. 

In tight markets, where there is limited inventory and buyers still compete for available homes, it may not be necessary to make any improvements because buyers will snap up anything that becomes available. A local agent knows this and can be of tremendous value to sellers.

Another valuable resource is the annual Cost vs. Value (CVV) report from Zonda, a housing data and consultancy firm. This report analyzes 23 common home-renovation projects to determine how much value those projects retain at resale. 

Results of the CVV report are often surprising. For example, many homeowners believe that a kitchen or bath remodel will provide the most return on their investment. But the 2024 CVV report, released in April 2024 and based on 2023 data, found that a garage door replacement was the top-performing project. With an average cost of $4,513 and an $8,751 resale value, a homeowner completing that project will recoup a whopping 194% of the cost. 

The second- and third-ranked remodeling projects on the 2024 list were a steel entry-door replacement and installation of manufactured stone veneer, which returned 188% and 153% of their cost, respectively. It’s no coincidence that all three of the top-performing projects this year are exterior projects that help to improve a home’s curb appeal.

“A buyer’s first impression of a house is super strong,” says Clay DeKorne, chief editor of Zonda’s JLC group. “When buyers drive up to a house that looks really shabby on the exterior, they form an impression that directly affects how much they want to pay for it. The interior may be wonderful, but they have to overcome the impressions they form about the outside.”

Curb appeal is an example of the old adage, “You don’t get a second chance to make a first impression.” Prospective buyers assume that if a house is well maintained, with an updated exterior, fresh paint, flowers and manicured landscaping, that the owner has been equally attentive to routine maintenance of the rest of the house, DeKorne says. 

The CVV also indicates which home-improvement projects don’t deliver value. An upscale bathroom addition, for example — a project with an average cost of $107,477 — returns just 32.6% of that cost at sale, and an upscale primary suite addition, with an average cost of $339,513, has a return of just 23.9%. 

That’s why home sellers need to carefully assess their planned projects to make sure they don’t spend money they won’t get back upon the sale of their homes. The full Cost vs. Value report breaks down the average cost and resale value for projects by region as well as nationwide.

Making it your own

Even if you’re not planning to sell your house soon, the CVV report can help guide you if you’re on a budget; many of the projects with the highest return on investment are also among the ones with the lowest costs. And because you don’t have to worry about making renovations that appeal to a wide range of potential home buyers, you can choose upgrades that suit your tastes. 

“People love to renovate their kitchens and bathrooms because that’s when they can put their mark on a house,” says DeKorne. “All of the selections — the countertops, flooring, cabinets, fixtures — are personal, and the value you get is the enjoyment of living in the space you created.”

You can spend tens of thousands of dollars to create a kitchen you love, a place where you’ll spend countless hours dining, entertaining or socializing with friends and family. But if the buyer of your house doesn’t like the ornate cherry cabinets you selected and prefers a bright white kitchen, then that kitchen will have no value to the buyer. 

Homeowners planning to stay for a while should feel free to personalize their space, choosing designs and finishes that make their house a home, rather than keeping it neutral in an attempt to appeal to a broader audience of potential home buyers. 

Debby Belt, a senior associate at Hammond Residential Real Estate in Chestnut Hill, Massachusetts, says clients often ask her whether a certain renovation is worthwhile. “When I’m asked that question, the number one thing I say is, ‘Will you enjoy it?’ ” she says. “You can’t think of the future because by the time you sell your house, the styles might be different.” 

Below are four remodeling projects among the top 10 from the CVV report that recoup the highest percentage of their cost at resale. We chose them not only because are they decent investments, but also because they can make your living space more enjoyable if you plan to stick around for a while. (Or, in the case of putting energy-efficient appliances in your kitchen or adding new siding — which can also improve energy efficiency — the projects can save you some money on utility bills in the long run.) 

Plus, all these renovations have an average cost of less than $30,000, and some may run considerably less, allowing you to rejuvenate your home without breaking the bank. 

Give your kitchen a facelift

A minor kitchen remodel is one of only two interior projects that are among the CVV report’s top 10 performers (the other is a midrange bath remodel; see below). The kitchen remodel costs an average of $27,492, with a resale value of $26,406 and 96.1% of the cost recouped. 

Zonda based these numbers on the following specifications:

• A functional but dated 200-square-foot kitchen
• 30 linear feet of cabinetry and countertops
• Leaving cabinet boxes in place and replacing fronts with new shaker-style wood panels and drawer fronts, including new hardware
• Replacing a cooktop/oven range and slide-in refrigerator with new energy-efficient models
• Replacing laminate countertops
• Installing a mid-price sink and faucet
• Adding new resilient flooring
• Painting walls, trim and ceiling

This project, which requires no demolition except for removal of the counters and flooring, can be completed in four weeks, according to Lee Bardin, owner of Expert Renovation Team in Newton, Massachusetts, who has 30 years of design-build experience. 

While it’s a great way to refresh a dated kitchen economically, Bardin warns that old cabinet boxes might be in poor shape, with stains or water damage — and that will be visible as soon as you open the doors. An alternative to refacing is to spray paint the cabinets, drawers and doors with multiple coats of lacquer finish. Bardin says the finished look is great and the cost is less than that of refacing.

Upgrade to fiber-cement siding

Replacing existing siding with new fiber-cement siding has an average job cost of $20,619, a resale value of $18,230 and a return on investment of 88.4%. Zonda based these numbers on the following specifications:

• Replacing 1,250 square feet of existing siding with new fiber-cement siding (factory primed and factory painted)
• Installing trim pieces, using either fiber-cement boards or cellular PVC
• Ensuring a continuous water-resistive barrier, such as a house wrap, beneath the siding

Fiber-cement siding, while more expensive than vinyl, is durable and long-lasting, and it performs better in moist environments, according to Elizabeth Gomez, co-owner of Bridge City Contracting in Battle Ground, Wash. The most important component of the installation process, which takes about three to five days for a 1,250-square-foot siding job, is the wrap that goes under the siding because it weatherizes the house and protects it from moisture issues such as dry rot and black mold, she says.

If your existing siding is in good shape and you’re primarily interested in boosting curb appeal, one way to re-side a house cost-effectively is to do only the front. That’s what Danielle Kilian did in 2021, when she installed fiber-cement siding on the front of her 1,546-square-foot home in Vancouver, Washington, at a total cost of about $13,000, including painting and a new front door. “

The rest of the siding was in good-enough condition, and we did the front to update the look of the house,” says Kilian, events director for the Building Industry Association of Clark County. “The front is what is seen by neighbors and by ourselves when we come home. So that was the most important piece for us, and we were able to do it in an affordable way.”

Build a deck

The addition of a wood deck has an average cost of $17,615, a resale value of $14,596 and a return of 82.9%. These costs are based on the following specifications:

• Adding a 16-by-20-foot deck, using pressure-treated joists (which are more resistant to rot and insects), supported by 4-by-4-inch posts anchored to concrete piers
• Installing pressure-treated deck boards in a simple linear pattern
• Including a built-in bench and planter of the same decking material
• Including stairs and a complete railing system using pressure-treated wood posts, railings and balusters

The construction of a 16-by-20-foot wood deck takes less than a week, according to Michael Ebner, owner of Back to Nature Decks in Oreland, Pennsylvania. Once the deck is completed, he recommends sealing it and re-sealing every year or two to preserve it. 

Ebner notes that about 80% of his clients opt for a composite deck instead of wood, although the price is higher — an average $24,206 for a 16-by-20-foot deck with similar specifications as the wood deck described above, according to the CVV report. The composite will last longer, Ebner says — good for 20 to 30 years with no maintenance. So if you’re planning to stay in your house for more than 10 years, he says the composite is “a no-brainer.”

One tip Ebner has for homeowners who want a deck is to go big. “A 16-by-20-foot deck is decent, but with all the amenities people have now — grills and furniture and a fire pit — think about extending the budget a bit to make it bigger. You will always fill it.” The incremental price of building a slightly larger deck is not substantial, he says, adding about $40 to $45 per square foot to the cost.

Update a bathroom

A midrange bathroom remodel comes with an average job cost of $25,251, a resale value of $18,613 and a return on investment of 73.7%. These statistics are based on a bathroom remodel with the following specifications: 

• Updating an existing 5-by-7-foot bathroom
• Replacing all fixtures, including a 30-by-60-inch porcelain-on-steel tub with a 4-by-4-inch ceramic tile surround
• Installing a new single-lever temperature and pressure-balanced shower control, a standard white toilet, a solid-surface vanity counter with an integrated sink, a recessed medicine cabinet with a light, a ceramic tile floor, and vinyl wallpaper

Bardin says that what starts as a simple bathroom remodel may end up being more comprehensive if the plumbing or electrical systems need to be updated as well. He says this project typically takes about eight weeks because multiple subcontractors are involved and, in his jurisdiction, seven inspections are needed along the way.

Bardin has two tips for home-owners planning a bathroom remodel. First, for the sink, he recommends a single-hole faucet, not the type with a spout and two handles. He says the single position has fewer problems, lasts longer and is easier to clean. Second, if a tub/shower is being installed, he says it’s critical that it be no deeper than 14 inches because it’s challenging for a homeowner or guest to step over anything higher, especially with wet feet. He suggests that anyone who wants a soaking tub install it in the primary bath, not a secondary bath that children and guests will be using.

Updating a bathroom can add tremendous value to a home. Real estate agent Debby Belt first tried to sell an expanded ranch home in Chestnut Hill, Massachusetts, with dated bathrooms, although it had a beautiful new kitchen. The offers she received were low, so Belt suggested that the owner take the house off the market and refresh three bathrooms, which Belt described as “livable, but dreary.” After she re-listed the home, it sold for $140,000 more than it would have before the bathroom facelifts, ultimately closing in February 2022 for $2.6 million.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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More than 1 million people spend part of the year in Florida, and many of them are retirees. The Carolinas, Georgia and Alabama have also become popular destinations for snowbirds. As millions of baby boomers retire, southbound traffic on I-95 is likely to get even more intense. 

But while the snowbird lifestyle may be appealing during the dark days of December, features that make a destination a great vacation spot may not translate into a desirable long-term stay, says Andy Baxley, a certified financial planner in Chicago. “An ideal snowbird community is going to offer opportunities for community and engagement, not just relaxation,” he says. 

We’ve selected eight cities that offer appealing options for snowbirds, including quality hospitals and physicians, plenty of short-term rentals, retiree-friendly amenities, and low taxes. Because not all snowbirds want to flock to Florida, we’ve provided destinations in seven other warm-weather states across the U.S. 

As you review our picks — or explore some of your own — here are factors to consider before you start stockpiling sunblock. 

Buying versus renting in retirement: Renting will help you determine whether a community is a good fit before you decide to purchase a condo or house. Kevin McLoughlin, a certified financial planner in Sterling, Va., says he encourages clients who are thinking about buying a second home in a warmer climate to spend one winter renting. 

“Sunshine is a plus, but you’ve also got to create a sense of meaning if you’re going to stay for a month or two,” says Heather Gibson, a professor of leisure, tourism and sport at the University of Florida. 

In 2016, Steve Parrish, a professor and scholar in residence at the American College of Financial Services, and his wife, Carla, began spending what Parrish calls “long, working vacations” at rental properties near the beach in St. Augustine. In 2020, they bought a condo in St. Augustine and divided their time between Florida and Des Moines. They decided to move to St. Augustine permanently and sold both of their condos this summer, which enabled them to buy a single-family home in a St. Augustine gated community. 

Owning two homes can be expensive, even if you’ve paid off the mortgage on your primary residence and can afford to pay cash for your second home (more on that below). The cost of homeowners insurance has skyrocketed in many coastal communities, and insurers typically charge higher premiums for second homes; because second homes are usually vacant part of the year, they’re at greater risk for insurance claims. You’ll also have to pay property taxes, which may be higher than taxes in your home state. Maintenance and utilities add to the cost, too. Renting will help you get an estimate of the costs of owning two homes. 

Health care: Even if you’re healthy now, that could change while you’re basking in the sun, so make sure that you have access to good medical care during the winter months. 

This is particularly important if you’re enrolled in Medicare Advantage, a private insurance plan that typically requires beneficiaries to use in-network physicians and hospitals. If you have a Medicare Advantage plan, contact the provider to find out whether you’ll be able to get in-network care at a potential winter destination. Otherwise, you may have to pay extra for an out-of-network provider, or your care might not be covered at all. 

Some Medicare Advantage plans are specifically designed for individuals who will need coverage in more than one location, which is worth considering if you’re planning to be a snowbird. Another option is to enroll in original Medicare, which provides coverage anywhere in the U.S. as long as the provider accepts it. 

You’ll also want to sign up for a medigap plan, a private insurance policy that cover deductibles, co-payments and other expenses. Premiums for a Medicare–medigap combination will likely be higher than those for Medicare Advantage, but you could end up paying less for health care in the long run because you won’t have to worry about out-of-network costs. 

If you have a Medicare Part D plan to cover prescription drugs, you’ll also need to determine whether the coverage extends to your winter destination. These plans are typically based on your primary location, but many have extensive pharmacy networks. Arranging for mail-order prescriptions of medications you take regularly is also an option and could save you money.

Taxes: States in the South and Southwest have long appealed to affluent retirees seeking to escape high state tax rates. But to demonstrate that you’re a full-time resident of a no-tax or low-tax state, you must spend the majority of the year in that jurisdiction — six months and one day at a minimum. 

Even then, you should take additional steps to establish residency because tax agencies in high-tax states are increasingly challenging wealthier snowbirds who claim to be residents of no-tax states. Register to vote, obtain a driver’s license and register a vehicle in your new location. 

Other documents that could demonstrate that you qualify to be a full-time resident include statements from an account with a local bank and bills from utilities and local health care providers. Keep records of any transactions that could show you have ties to the warm-weather state. In one court case, a judge ruled that an individual demonstrated residency in Texas because his dog was registered there. 

Estate planning: Each state has its own laws and regulations governing estate planning, which complicates matters for snowbirds. For example, a health care directive or power of attorney that’s legally binding in one state may not be recognized in another. 

When the Parrishes were dividing their time between Iowa and Florida, they had powers of attorney for health care executed in both states and kept the documents in both places so they would be available if one spouse ended up in the hospital. 

Owning homes in more than one state can also create headaches for your heirs, since they may be forced to go through probate in both states. Placing the properties in a revocable living trust will allow them to be transferred to your heirs, under the terms of the trust, outside of probate.

Financing a snowbird nest

While renting a condo or second home in a warm-weather state may make sense for a year or two, at some point you may decide you’d rather have a place of your own. That way, you’ll always have somewhere to stay during the winter months. It could also provide a way to downsize if you decide to sell your home up north. 

After soaring during the pandemic, sales of second homes dropped sharply in 2023, according to an analysis by online real estate mortgage broker Redfin. Early figures for 2024 indicate that demand for mortgages on second homes remains tepid, Redfin says, primarily due to high mortgage rates. The drop in demand has forced some sellers of vacation homes to lower their prices and offer more concessions to prospective buyers, says Daryl Fairweather, chief economist for Redfin. 

However, the same factors that have depressed the market for second homes can make buying one more challenging. Although mortgage rates have edged lower recently, the average rate for a 30-year, fixed-rate home loan remains at about 7%, and rates for second homes are typically 0.5 to 0.75 percentage point higher than those for primary homes. 

That’s not a concern if you can afford to pay cash for your second home. But some retirees may be reluctant to withdraw that much from their savings, and taking a large distribution from a traditional IRA or other tax-deferred account could trigger a large tax bill. Other options: 

A traditional first mortgage: Being out of the workforce isn’t necessarily a barrier to buying a second home, says Bill Banfield, chief business officer for Rocket Companies, parent company of Rocket Mortgage. 

Income from Social Security, a traditional pension, or continuous withdrawals from a retirement savings account can demonstrate to a lender that you can repay a mortgage, says Banfield. Retirees who don’t have a regular income stream but have a large amount of assets may also qualify. 

A home equity loan: A home equity loan is a lump-sum loan based on the amount of equity you have in your home and its fair market value. In general, lenders will allow you to borrow up to 85% of your home equity. You’ll repay the loan in monthly installments at a fixed interest rate over a period of anywhere from five to 30 years.

As is the case with mortgage rates, interest rates for home equity loans have risen since the Federal Reserve started hiking short-term rates in March 2022. Recently, the average rate was 8.61%, according to Bankrate.com. Your own rate will vary, depending on your credit score and payoff terms. 

Some retirees use a combination of cash and loans to buy their second homes, Banfield says. For example, you could withdraw money from your savings to cover a portion of the cost and finance the rest with a first or second mortgage. 

A reverse mortgage: Many retirees use income from a reverse mortgage to age in place, but you may also be able to use it to purchase a second home, says Steve Resch, vice president of retirement strategies at Finance of America Reverse, a reverse mortgage lender. 

To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have significant equity in your home, and the home must be your primary residence. You can convert your home equity into a lump sum, monthly payments or a line of credit. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. 

You can use the proceeds from the reverse mortgage to make a down payment or make an all-cash purchase, Resch says. However, the reverse mortgage must be on your primary residence, so you must continue to live in your northern home for at least half of the year. (If you’re away from your primary residence for longer than six consecutive months for nonmedical reasons, the loan usually becomes payable in full.) 

HECM regulations prohibit borrowers from taking out more than 60% of the available proceeds in the first year, which could limit the amount available for an all-cash purchase. One way to get around this problem is to take out the reverse mortgage a few years before you plan to buy a second home. 

A reverse mortgage doesn’t have to be repaid as long as you spend at least half of the year in your primary residence. However, up-front closing costs are higher than those for a home equity loan, so a reverse mortgage usually isn’t a good choice if you plan to sell your primary residence in less than five years. 

SOURCES: Figures for living costs are based on the Council for Community and Economic Research’s Cost of Living Index. The average for all participating places is 100. Population data comes from the U.S. Census Bureau. Typical monthly rent and mortgage payments are provided by Zillow. Hospital information is from Medicare. 

Florence, SC

Population: 40,609 

Cost of living: 95.0 

Average temperature during snowbird season: 58 degrees 

Number of hospitals within 25 miles: 6 

Closest airport: Florence Regional Airport 

Local vibe: Growing community with a rich history 

Florence was a major railroad hub in the 19th century. For decades after its railroad heyday, the area was better known for empty storefronts and the demolition of culturally significant buildings in favor of new construction. 

However, in 2011, the city and a group of dedicated volunteers embarked on a revitalization plan that has attracted more than 90 new businesses to the community, along with more than 100 new housing units. In 2023, Downtown Florence Main Street was one of three winners of the Great American Main Street Award, which recognizes communities for comprehensive, preservation-based commercial district revitalization. 

The city is adorned with whimsical public art, reflecting its lively arts scene, and is home to award-winning entertainment venues, such as the Florence Little Theatre, a community theater that has been providing high-quality theatrical productions for more than 90 years. The Florence County Museum offers a mix of historical exhibits and contemporary art. 

One- and two-bedroom apartments are available for less than $1,500 a month. Home prices are affordable as well, with condos available for less than $150,000, according to listings on Zillow. However, buyers may want to act fast. In March 2024, AESC, a Japanese battery-technology company, announced a $1.5 billion expansion of its electric-vehicle battery plant in Florence County, which is expected to create 1,080 new jobs and increase demand for housing. 

MUSC Health Florence Medical Center is a 396-bed acute care facility with about 300 physicians representing all major specialties. Carolina Pines Regional Medical Center, located in nearby Hartsville, is a 116-bed acute care facility that offers emergency services, several surgical specialties, and inpatient and out-patient care. 

South Carolina’s state sales tax rate is 6%. Localities can add as much as 3%, and the average combined rate is 7.5%, according to the Tax Foundation. Groceries and prescription drugs are exempt. For residents, Social Security and military retirement income are tax-exempt; other income is taxed at rates ranging from 3% to 6.4%.

Brunswick, GA

Population: 16,122 

Cost of living: 85.0 

Average temperature during snowbird season: 68 degrees 

Number of hospitals within 25 miles: 1 

Closest airport: Jacksonville International Airport 

Local vibe: Historic coastal living 

Located in coastal Georgia, Brunswick has a lot to offer if you love to be outdoors. Blythe Island Regional Park provides an ideal location for camping, picnicking, fishing and boating, while the Marshes of Glynn Overlook Park is a great place for scenic walks and bird watching. After a day of outdoor adventuring, snowbirds have a host of attractive dining options to choose from, including award-winning cuisine at Mr. Shuck’s Seafood. 

Two-bedroom apartments and condos are available in Brunswick for less than $1,500 a month, and buyers can find three-bedroom condos for less than $200,000. 

Brunswick is adjacent to two famous resort islands, St. Simons and Jekyll Island. While St. Simons is perhaps the more popular destination of the two coastal isles, Jekyll Island also boasts beautiful beaches, bike trails and historical landmarks, including a financial landmark of sorts. 

In November 1910, six men met secretly at the Jekyll Island Club to plan a reform of the U.S. banking system; the meeting laid the foundation for the Federal Reserve System. Homes on these islands are considerably pricier than those in Brunswick, with the average house in St. Simons going for more than $650,000 and condos selling for $350,000 and up. 

The Southeast Georgia Health System’s Brunswick campus is a 300-bed acute care hospital with a cardiac rehabilitation and cancer care center, among other services. Baptist Medical Center Nassau, a 62-bed community hospital, is located 34 miles away — in Florida, just over the state line — and has physicians in 29 different specialties. 

Georgia’s state sales tax rate is 4%, and the combined state and local average rate is 7.35%, according to the Tax Foundation. Prescription drugs are exempt from sales taxes; groceries are exempt from state sales taxes, but local taxes may apply. Georgia doesn’t tax the Social Security benefits of full-time residents. The state taxes most other retirement income, but taxpayers 62 and older can exclude up to $35,000, and those 65 and older can exclude up to $65,000. Other income is taxed at a flat rate of 5.39%.

Vero Beach, FL

Population: 16,354 

Cost of living: 93.4 

Average temperature during snowbird season: 77 degrees 

Number of hospitals within 25 miles: 4 

Closest airport: Vero Beach Regional 

Local vibe: A thriving arts scene 

This longtime snowbird destination’s historic downtown area is a haven for art lovers. Check out the Gallery Veritas & Art Library, Gallery 14, or the Artists Guild Gallery of Vero Beach for selections of contemporary art. Just up the road, the Vero Beach Museum of Art has shifting exhibitions of international and national contemporary artwork, and it offers volunteer opportunities for those who want to get involved in the arts community. 

The Museum of Art sits near Riverside Park, a waterfront park nestled close to town. The Riverside Theater showcases a variety of performances, including musicals, plays, concerts and comedy shows, and it offers dance classes for children and adults. Locals also love pickleball, fishing in the Indian River in nearby Sebastian, and relaxing at one of the breweries or distilleries that have recently opened in the area. 

The cost of housing in Vero Beach is 83.1% of the national average, and at least 25% of the housing is available for seasonal residents, says Debbie Avery, a real estate agent and board member of the Vero Beach Chamber of Commerce. One- and two-bedroom condos are available for around $150,000, according to Zillow. If you’d rather rent, you can find one- and two-bedroom units between $1,500 and $2,500 a month. 

Vero Beach is home to Cleveland Clinic Indian River Hospital, a 332-bed facility that offers preventive, primary and acute hospital care and a broad array of specialty services. Other hospitals within 25 miles include HCA Florida Lawnwood, which has 435 beds and provides a full range of inpatient and outpatient services, and HCA Florida St. Lucie Hospital, a 222-bed hospital that offers a wide spectrum of services, including a senior-friendly emergency room. 

Florida has a 6% statewide sales tax. Localities can add as much as 2%, and the average combined rate is 7.002%, according to the Tax Foundation. Groceries and prescription drugs are tax-exempt. Snowbirds who decide to make Florida their primary residence will pay no income tax on retirement income or Social Security benefits.

Slidell, LA

Population: 28,781 

Cost of living: 99.0 

Average temperature during snowbird season: 69 degrees 

Number of hospitals within 25 miles: 9 

Closest airport: Louis Armstrong New Orleans International Airport 

Local vibe: Small-town southern charm 

Just 20 minutes from New Orleans, Slidell offers small-town living and a rich cultural heritage. The town hosts several local festivals and events throughout the year, including the Slidell Heritage Festival, which celebrates local history and traditions. 

Like much of Louisiana, Slidell participates in Mardi Gras with parades, balls and other festivities. And you’ll find no shortage of places that dish up traditional Creole, Cajun and southern food, including Palmettos on the Bayou, a waterfront restaurant with a relaxed atmosphere and award-winning cuisine. 

Situated near Lake Pontchartrain and the Gulf Coast, Slidell is also a popular spot for fishing and boating. Nearby Honey Island Swamp offers opportunities for guided swamp tours and close-up views of otters, gators, great blue herons, egrets and turtles — and with any luck, the Honey Island Swamp Monster, sometimes referred to as the “Tainted Keitre,” which inhabits the swamp, according to local legend. 

Renters can find one-bedroom units for less than $1,500 a month. Single-family homes are available for less than $250,000, according to Zillow — below the national average. 

There are nine hospitals within 25 miles of Slidell, so retirees have their pick of medical providers for their health-care needs. Slidell Memorial Hospital is a 223-bed acute care facility with specialties in cardiology and cancer. Our Lady of the Lake Surgical Hospital has 32 beds and specializes in cardiology, neurosurgery and orthopedics, among others. 

Louisiana has a 4.45% sales tax rate, and the combined average state and local sales tax rate is 9.55%, according to the Tax Foundation. Groceries and prescription drugs are exempt. Retirees who make Louisiana their full-time residence won’t pay taxes on Social Security benefits or federal retirement benefits, including military benefits. Residents 65 and older can also exclude up to $6,000 from state income tax, which ranges from 1.85% to 4.25%.

Northport, AL

Population: 37,961 

Cost of living: 91.7 

Average temperature during snowbird season: 50 degrees 

Number of hospitals within 25 miles: 2 

Closest airport: Tuscaloosa Regional Airport 

Local vibe: Barbecue and college football 

If you are looking for a town with southern charm and plenty of culture, Northport fits the bill. Each October at the annual Kentuck Art Center & Festival, art lovers can participate in educational workshops and see folk art made out of license plates and other unique objects. The city’s majestic Black Warrior River and the scenic Van de Graaff Park and Arboretum are inviting for retirees who want a winter getaway where they can fish and boat. 

Pay a visit to Dreamland BBQ in nearby Tuscaloosa for authentic southern cuisine. And if you’re a college football fan, you can head to Tuscaloosa to watch the University of Alabama Crimson Tide during the fall and winter. Seniors can also take advantage of classes and volunteering opportunities at the university’s Osher Lifelong Learning Institute. 

Northport and surrounding areas offer a number of affordable housing options for snowbirds, says real estate agent Mary Harmon Young. If you’re in the market to buy, you can find three-bedroom houses for less than $250,000, according to Rocket Homes. Renters can find one- and two-bedroom apartments for less than $1,000 a month, and some two-bedroom places rent for as little as $675 a month, Harmon Young says. However, buyers and renters need to move fast because affordable housing is often snapped up quickly. 

Health care is available through Northport Medical Center, which has 207 beds and numerous specialty medical services in addition to inpatient and outpatient care. The DCH Regional Medical Center, in Tuscaloosa, offers 583 beds and advanced trauma and cardiology services, as well as specialty units for cancer patients. 

Alabama has a 4% statewide sales tax, and the average combined state and local rate is 9.289%, according to the Tax Foundation. Prescription drugs are exempt, but Alabama is one of a handful of states that tax groceries. Retirees who become full-time residents won’t pay taxes on Social Security benefits, federal government benefits, Alabama state and local government benefits, military retirement plans, or income from traditional pension plans. In addition, for residents 65 or older, up to $6,000 of retirement income is exempt from taxes. Other income is taxed at rates ranging from 2% to 5%.

Mission, TX

Population: 83,211 

Cost of living: 80.9 

Average temperature during snowbird season: 76 degrees 

Number of hospitals within 25 miles: 8 

Closest airport: McAllen Regional Airport 

Local vibe: Birds and butterflies on the border 

Attractions in Mission include the World Birding Center — home to more than 500 species — and the National Butterfly Center, a 100-acre wildlife center and nature preserve that features the largest variety of butterflies in the U.S. 

Mission is situated on the U.S.–Mexico border, so it’s a good place to sample Mexican cuisine — try Pepe’s Tacos Al Pastor or Casa del Taco. Known as the “Home of the Grapefruit,” Mission celebrates its heritage every January with the Texas Citrus Fiesta. The historic Border Theatre, in downtown Mission, hosts arts performances and special movie screenings, and the building features wall-to-wall murals of the Rio Grande Valley before modernization. 

Nearly 74% of vacant housing inventory in Mission is designed for seasonal use, according to a survey of snowbird destinations from StorageCafe, an online marketplace for storage facilities. Rising mortgage rates and falling demand have made Mission a buyer’s market, with three-bedroom houses available for less than $200,000. 

There’s also a good supply of rentals for snowbirds, says Hortencia Camargo, real estate agent with Coldwell Banker. If you want to rent for the winter, you can find a one-bedroom apartment for about $900 a month. If you prefer to have access to amenities such as a pool, you can expect to spend $1,200 to $1,500 a month for a two-bedroom apartment, she says. 

Camargo also notes there has been growth in different types of rentals in Mission, such as townhouses and multifamily homes. If you like to socialize with nearby neighbors, a townhouse rental community might be a good choice, she says. 

Mission Regional Medical Center, with 297 beds, provides a full range of emergency services, including emergency cardiology and orthopedic care. Rio Grande Regional Hospital, in nearby McAllen, is a full-service, 320-bed acute care hospital that provides heart treatment, rehabilitation and therapy, stroke and vascular care, and urgent care. 

Texas has a 6.25% state sales tax rate. Groceries, prescription drugs and over-the-counter medications are tax-exempt. Texas has no income tax, so full-time residents pay no taxes on retirement income. The state’s property taxes are above average for the U.S., but tax breaks are available for homeowners who are 65 or older.

Apache Junction, AZ

Population: 38,499 

Cost of living: 101.9 

Average temperature during snowbird season: 57 degrees 

Number of hospitals within 25 miles: 11 

Closest airport: Phoenix-Mesa Gateway Airport 

Local vibe: Old West and wilderness 

This desert town is a welcoming home for snowbirds who want to spend the winter months in the Southwest. Apache Junction is surrounded by wilderness, making it ideal for outdoor enthusiasts. 

Active retirees can hike along the sprawling, 320-acre Lost Dutchman State Park, which was named after a lost gold mine. Retirees can also participate in special-interest classes and fitness activities at the Apache Junction Multi-Generational Center. Some of the programs require preregistration and payment, but many of the activities are free. 

Want a taste of the cowboy lifestyle? Go on horseback rides at the Superstitions OK Corral stables or visit the Lost Dutchman Days Rodeo, which takes place every February. Elvis fans shouldn’t miss the Elvis Presley Memorial Chapel at the Superstitious Mountain Museum, where the king of rock ’n’ roll filmed the western Calypso in the 1960s. For a bite to eat, enjoy chili burgers and fries at the Handlebar Pub and Grill or ribs and brisket at Papa’s BBQ. 

Seasonal rentals are widely available in Apache Junction, says Charlie Wise, Jr., a real estate agent with Lost Dutchman Realty. Apartments are relatively affordable, with a two-bedroom unit going for about $950 a month. Three-bedroom townhouses sell for about $295,000, according to Rocket Homes. 

Apache Junction’s Banner Goldfield Medical Center is a small, 20-bed hospital that offers emergency services, surgical care and lab services. The Mountain Vista Medical Center, in nearby Mesa, offers emergency, orthopedic and cardiology care and has 178 beds. 

Arizona’s state sales tax rate is 5.6%. The average combined state and local sales tax rate is 8.37%, according to the Tax Foundation. Prescription drugs are tax-exempt; groceries are exempt from state sales taxes, but local taxes may apply. 

For full-time residents, up to $2,500 of income from the federal government, Arizona state government and Arizona local government retirement plans is exempt from income tax. Military pensions are fully exempt. Other income is taxed at a flat rate of 2.5%.

Mesquite, NV

Population: 20,471 

Cost of living: 97.6 

Average temperature during snowbird season: 50 degrees 

Number of hospitals within 25 miles: 1 

Closest airport: St. George Regional Airport 

Local vibe: Golf and desert vistas 

Mesquite is another great option for snowbirds who prefer a desert home. Retirees can tour the Hillside Arboretum’s beautiful parkways, stay active at the Old Mill Pickleball Courts or check out one of the area’s numerous golf courses. Just south of Mesquite, you can visit Gold Butte National Monument, which spreads across nearly 300,000 acres. 

When it’s time to relax, go to one of the city’s day spas or enjoy a meal at one of the town’s dining options. You can listen to classic rock ’n’ roll after having an ice cream float at Peggy Sue’s 50’s Diner, or taste authentic Mexican cuisine at La Fonda Mexican Restaurant. 

Retirees who are interested in exploring some of the West’s most famous landmarks can use Mesquite as a base to explore Bryce Canyon National Park and the Grand Canyon’s North Rim. Las Vegas is only an hour away. 

Homes and apartments are affordable, according to Irene Navarro, a real estate agent with ERA Brokers Consolidated. Although the inventory of homes for sale is low, plenty of rentals are available for snowbirds, with two-bedroom apartments going for about $1,200 a month. About 86% of vacant housing units in the city are available for seasonal use, according to StorageCafe. 

Mesa View Regional Hospital is a 25-bed facility with pain-management and radiology services. St. George Regional Hospital, in nearby St. George, Utah, is a larger facility, with 284 beds, a Level II trauma center, and orthopedic and oncology care. 

Nevada has a state sales tax rate of 6.85%. The average combined state and local sales tax rate is 8.23%, according to the Tax Foundation. Groceries and prescription drugs are exempt from sales taxes. Nevada has no personal income tax, so full-time residents pay no taxes on retirement income.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Knowing the details of all the expenses to expect means you can stay on top of your finances, helping you avoid any nasty unexpected bills.

Here’s everything you need to know about the cost of selling a home and some tips on how to save money along the way. 

What is the cost of selling a house? 

According to Shelly Salas, HomeLight elite agent in Killeen, Texas, the cost of selling a house depends on several factors, including the “house itself, the current state of your local market, the cost of living, as well as the list prices of other homes in your area.”

She says the average cost of selling a house is about $31,308, but there might be a “little bit of leeway to recoup some of the costs.” 

“If we’re in a seller’s market, you might be able to get the buyer to cover more of the costs than usual, especially if various offers are coming through on the property.” 

“If the market is more in favor of the buyer, you may have to do more of the heavy lifting by putting in additional work and money to help attract attention from buyers,” she explains.

Overall, a seller can expect to expend between “10 to 12% of the sales price” on sales-related costs, says Salas. That’s only a rough figure, as variables can bring the costs down significantly.

What is the agent commission when selling a house?

Agent commission is likely to be the largest of the costs involved in selling a house, but it isn’t a fixed amount. “The first thing all sellers should know is that commissions are negotiable,” says Salas. “There is no set amount that all agents charge.” 

Shelley points to transactional data from HomeLight. It shows the national average real estate agent commission is 5.8% of the property sales price. 

But over the past few years, agent commissions have averaged at about 5.47%, which covers both the listing agent and buyer’s agent fees.

That number is expected to change soon, after the National Association of Realtors agreed to pay $418 million and change its rules so as to settle a number of lawsuits over its industry practices. Under the new rules, a seller will no longer have to cover the commission earned by the buyer's agent. The removal of this fee could substantially lower the cost of selling a house. The settlement has received the preliminary approval from a judge, with the final approval set for the fall.

 What are the marketing costs of selling a house?

Not all selling agents have the same fees and costs. Some agents may charge additional marketing and staging fees, but it varies from realtor to realtor.

Salas says: “When an agent markets your house, there are a few fees you might have to pay. Staging and prep costs can range between 1% and 4% of the typical sale price. When preparing your home for sale, it’s important to declutter ($400 for a dumpster rental) and deep clean the property ($300 per clean), apply a fresh coat of paint if needed ($1,900), brighten up the flooring ($1,800), spruce up your curb appeal ($3,500), and stage your home ($1,600).”

“A seller who completes all of the tasks above would spend nearly $9,500 getting their home ready to market, which comes to around 3% of today’s median home sale price, which sits at $357,300,” she said.

What is the cost of selling your home yourself?

Opting to sell your home yourself to save costs may end up saving you a small fortune in fees, but it does introduce some potential barriers to achieving a good sale price. Salas says the first thing to do is to set a “competitive price.”

Salas says: “Next, take professional photos of your home to attract a larger pool of potential buyers. Homes with high-quality photographs sell 32% faster than those without visuals, according to research from VHT Studios.”

It is also well worth ensuring the description is appealing and creative. Salas says: “Think about how you’d like to depict your home by painting a picture in the buyer’s mind about what sets your property apart from the others in your neighborhood. Highlighting your home’s outdoor features as well as energy-efficient features, which are top buyer preferences today, can also help attract potential buyers.”

Another important factor is to sell the location, particularly if your home is in a prime spot. Salas says: “HomeLight’s 2022 Buyer and Seller Insights report found that the top location-related features in a buyer’s home search include nearby necessities such as gas stations and grocery stores (49%); a walkable neighborhood (35%); a quality school district (31%); proximity to work (30%); and proximity to restaurants and shopping (24%).” 

What taxes are payable when selling a house? 

Agents’ fees aren’t the only costs to consider when selling a home. Salas says sellers are typically responsible for “prorated taxes from January 1st up to the day of the actual sale of the home,” while most settlement companies have further fees to pay.

On top of this come recording fees and document preparation fees. “These should all be included in the initial percentage cost breakdown that the agent presents to the seller during their initial consultation,” Salas says.

Also, there is no one party responsible for the closing costs, neither is there a set menu of what each side needs to pay. But someone will have to pay the transfer tax, title insurance, prorated property taxes, and homeowner association fees.

You could be asked to pay some of the buyer’s costs in a buyer’s market where there’s a surplus of homes for sale and low buyer demand. 

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Florida is a bit more complicated than just beaches, Disney World and the massive retirement community known as The Villages. You'll want to consider all aspects of the state before packing up and heading South. In fact, we recommend you "try before you buy" — spend an extended period of time in the Sunshine State to get to know the place before you make a move.

Here's what you need to know about moving to Florida. So grab an OJ and dive on in. The water’s warm, but...complex.

1. Prepare for harsh weather

Sure, Florida has great weather. After all, it is called the Sunshine State. But don't expect every day to be sunny. Thunderstorms in Florida are frequent and intense. The Atlantic hurricane season lasts for six months, from June 1 until November 30, and peaks between mid-August and late October. Since 1850, all of Florida’s coastline has been impacted by at least one hurricane.

The most recent hurricane to wreak havoc on Florida was Hurricane Idalia, which made landfall as a Category 3 hurricane, bringing winds of 125 mph and seven to 12 feet of storm surge, before making its way toward Georgia and the Carolinas. Streets flooded, houses were destroyed, trees snapped and 300,000 individuals were left without power. 

The likelihood of harsh weather can affect the financial benefits of moving to Florida. Florida residents end up paying a lot more in insurance in order to protect their property. More on that below. 

2. You'll need plenty of insurance in Florida

The risk of hurricanes makes insuring your home in Florida much more complex and expensive than it is in many other areas. In many hurricane-prone areas, insurance companies often require property owners to not only purchase homeowners insurance but also flood insurance and sometimes even windstorm coverage. 

“The cost to insure a home without wind mitigation features could be four times higher than a home with wind mitigation,” says Chris Heidrick, an independent insurance agent in Sanibel, Fla.

Floods aren't covered by a standard homeowners policy, but you can get coverage from the National Flood Insurance Program. According to Policy Genius, flood insurance costs an average of $888 per year from the NFIP. You may also be able to find flood coverage from private insurers.

However, many insurance companies in Florida are leaving the state entirely. Others are choosing to significantly raise rates, limit coverage and even cancel policies. For example, last summer, AAA announced it would no longer be renewing policies with home, auto and umbrella bundles in Florida, and Farmers Insurance pulled out of Florida entirely, affecting 100,000 policies. 

For this reason, the availability of coverage and cost of premiums can vary a lot by insurer in Florida. Plus, expect to pay a higher deductible for hurricane damage — generally, 5% to 10% of your coverage amount for damages caused by a hurricane. The Florida Office of Insurance Regulation has a great Rate Comparison Tool that provides premium estimates from insurers in your county.

Overall, It’s important to find out about a house’s insurability before buying it, so you don’t end up with annual premiums that are several thousand dollars more than you were expecting to pay.

You can use our tool below — powered by Bankrate — to compare home insurance policies today.

3. Florida’s a lot less taxing

Moving to the Sunshine State could save you a lot of money in taxes. Florida, one of our 10 most tax-friendly states for retirees, has no state income tax. That means no state taxes on Social Security benefits, pensions, IRAs, 401(k)s and other retirement income. It also has no inheritance tax or estate tax.

But snowbirds who maintain a second home in a colder state can’t just tap their heels together to establish residency in Florida for tax purposes. You’ll need to show that you spend more than half the year — 183 days — in Florida. But don’t expect state tax auditors to take your word for it. For starters, keep a diary or log showing the number of days you spend in each state during the year, says Tim Steffen, director of financial planning for Robert W. Baird. Here's what else to do:

• Register to vote in Florida, and if you receive a jury summons, perform your civic duty
• Apply for a library card
• Change your driver’s license and car registration
• Establish relationships with health care providers in your new location
• Open an account at a local bank, and keep receipts of ATM withdrawals
• Shopping locally is also a good idea: State tax auditors sometimes review credit card records to determine where you were during the year
• File a Declaration of Domicile with your local county court

4. The state's population is growing fast

Retiring to Florida? Expect lots of company. Florida is already the third most populated state and just keeps growing.

Florida was the second fastest-growing state in the nation in 2023, growing by 1.6% to reach a population of 22,610,726. Before that, between 2021 and 2022, Florida’s population increased by 1.9%, making it the fastest-growing state for the first time since 1957. And out of the top ten fastest-growing metro areas (between July 2022 and July 2023), Florida is home to four.  

Depending on where you land, expect to be surrounded by people who look like you. By 2030, the number of seniors in the Sunshine State is expected to increase by several million.

“Everything is geared toward retired, older people,’’ said one resident, a January 2012 transplant from upstate New York who owns a home in Fort Myers Beach (Gulf side). “All the commercials are about things like walk-in bathtubs, insurance, Lifeline, i.e. ‘I've fallen and I can't get up.’ So many volunteer activities are during the workday. It's like they don't think people move down here to work.”

5. Florida’s tourists can slow you down

Don't underestimate the amount of tourists who pour into Florida every year. If you visited Walt Disney World when you were a kid you probably marveled at the crowds. As a resident, you’ll probably only be annoyed by them.

In 2023, Florida tourism reached unprecedented levels, with the state welcoming more than 140.6 million visitors, an increase of 2.3% from 2022. Approximately 137.6 million tourists visited Florida in 2022, setting a record for the highest visitation in state history at that time. In 2019, Florida had 131.42 million tourists, and the state has had more than 100 million visitors a year from 2010 to 2019 converging on the state’s famous theme parks, beaches and destination spots such as the Keys and Everglades National Park.

Think of all those tourists on the road as you try to run errands. Major headache.

6. Yes, there's such a thing as TOO much sun

Many of you beach bums in the swingin' '70s knew nothing of SPF. It was baby oil, baby, slathered on your tender skin to enhance rays of sunshine to deepen your tan. Little did you know. 

The sun on exposed skin was dangerous then and is dangerous now, especially if you're a tenderfoot moving from the Midwest or Northeast to year-round sunshine in tropical Florida. Sunburn can cause premature wrinkling and uneven skin coloring. And too many sunburns or too much sun will cause your skin's texture to change. 

"The skin can become tough and leathery," according to the Florida Institute of Neuroscience. "You may also notice more wrinkles. The sun can also cause brown, red, yellow, or gray spots in the skin called sun spots." 

And the most serious result of too much sun, of course, is skin cancer. Your risk for getting skin cancer increases the more sun exposure and sunburns you have. So be careful. A study found that Florida was the second in the nation for the highest rate of new melanoma cases. And at the time of the study, approximately one in ten Floridians had been told they have skin cancer (9.2%).

Sun worshippers are urged to stop sunbathing, avoid the sun between 10 a.m. and 4 p.m. (when the sun's rays are most damaging), and use broad-spectrum sunscreens. And when you are on the beach, sit under an umbrella or some other shaded protection from the sun.

7. Housing supply is increasing

Previously, Florida, like elsewhere in the country, was low on inventory in this seller's market. But recently, Florida has faced the opposite problem — an increase in inventory and not enough buyers. There has been a surge in the number of homes for sale on the Gulf Coast of Florida, according to Redfin. Specifically, the number of homes for sale in Cape Coral, FL and North Port, FL surged roughly 50% from a year earlier in March — more than anywhere else in the country. 

Of the 10 metro areas that experienced the largest year-over-year increases in supply, six are in Florida. As mentioned, Cape Coral, FL saw the biggest jump in homes for sale (51%), followed by North Port-Sarasota, FL (48%), Fort Lauderdale, FL (30%), Tampa, FL (29%), Orlando, FL (23%) and West Palm Beach, FL (20%).

The consequence of this? Sellers are slashing prices in these areas.

“Out-of-town homebuyers no longer see Florida as a place to get amazing value. Now they’re moving to North Carolina or Tennessee to get a good deal," Eric Auciello, a local Redfin sales manager says in the report. He goes on to say: "My advice to sellers is to price your home fairly; the comps from six months ago don’t exist now. And if you’re a buyer, know that the odds of getting an offer accepted below market value are pretty high.”

Of course, you're still going to find luxurious waterfront homes for several million in many Florida communities, but the average Florida home value is $399,944, up 3.2% over the past year. For comparison, the average United States home value is $360,681, up 4.3% over the past year.

8. Life’s not always a beach in Florida

There’s often a major misconception about Florida as a retirement destination: Many think the state is one big beach. An easy-to-reach beach. Not so. Those world-famous theme parks? They’re in Orlando, in the middle of the state, an hour or so car ride to the beach.

“People who are thinking about a move to Florida should really explore the state,” says Dania Perry, a real estate agent with Century 21 Jim White & Associates in St. Petersburg. “Each of Florida's metro areas has its own vibe. The east and west coasts of Florida are very different — as different as the Gulf of Mexico and the Atlantic Ocean. North Florida features vast stretches of rolling hills and countryside.”

You already know the big destinations: Orlando, home to Disney World, Universal Studios and their smaller ilk; Miami, if you want to live out your “Miami Vice” or “Golden Girls” fantasies (whatever floats your boat; we’re in a no-judgment zone); and the Florida Keys for a laid-back lifestyle as far south as you can go in the state.

But other Florida towns belong on your Florida Retirement Planning Tour. Fort Myers Beach, for example. You’re right on the Gulf (or close to it), there are plenty of 55-and-older communities, yet it remains youthful during the high season, with plenty of young people flocking to the resort area with its boardwalk and bars.

Sarasota has plenty of beaches, and the small city moves a bit slower than some of the larger towns in Florida. There is a wide array of restaurants and stores in St. Armands Circle, the island shopping center. Another bonus: access to the Sarasota Memorial Health Care system, which is one of the largest medical centers in Florida.

Is retiring to a college town — to teach part-time, take courses (free for folks age 60 or older) or just hang out with the young’uns — a must for you? Check out Gainesville, home of the University of Florida. But bear in mind that Gainesville is deep in the heart of Florida, 75 miles from any beaches.

9. Florida has lots of creepy, crawly things

Florida is its very own ecosystem, and the state’s various creatures may do more than make your skin crawl. They might also eat into your budget.

For instance, dealing with termites is just part of the routine for Florida homeowners. Of the top 10 U.S. cities where Orkin performed the most termite treatments from February 1, 2022 to January 31, 2023, Florida scores three: Miami, Tampa and Orlando. As you can see, Miami scored the #1 spot on the list.

A termite inspection by a pro ranges from free to $325, with an averaging of around $150. The average cost for the treatment of termites is $575. 

Then there are the rats — on the beach, in the trees, and perhaps on your roof, too. Yes, they are the same rats you know and loathe; they've just adapted to the climate and are called, among other things, palm rats and roof rats. Rat control can cost homeowners upward of $300 a year.

As a Floridian, you’ll also have to keep an eye out for alligators, panthers and pythons. Oh my. Florida has an estimated 1.3 million alligators of the approximately five million in the U.S., and you might encounter them slinking across a golf course or gliding in backyard swimming pools. 

“Beware of Alligators” signs are posted at lakes, lagoons, parks, ponds, golf courses and elsewhere throughout Florida. Alligator attacks are rising partly due to rising temperatures, development and people visiting their habitat more frequently, Florida Fish and Wildlife Conservation Commission experts say. 

Panthers, the state animal of Florida, are another tale. While there have been no documented panther attacks on humans, they do dine on pets and livestock.

And Burmese pythons, which aren’t native to Florida, are growing in numbers in Everglades National Park — and showing up in homeowners’ pantries, cars, laundry rooms and other spots.

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Unfortunately, only 39% of renters make enough to afford the median-priced apartment, as a recent report by Redfin stated. That's because the typical U.S. renter earns an estimated $54,712 per year, 17.3% less, or $11,408 in dollar terms, than the $66,120 needed to afford the monthly rent for the median-priced U.S. apartment ($1,653). 

All the same, rent prices increased by just .77%, or $15, between March 2023 and March 2024, according to Rent.com as reported by Kiplinger. But compared to March 2020, prices are up 21.78%, or $373. 

Best places to rent 2024 

As the moving season begins, finding a rental has become increasingly difficult, leading to unexpected shifts in some of the most competitive markets — in cities and suburban areas — per the RentCafe study. 

What are the most competitive places to rent 2024?

Although owning a home is thought to be part of the American dream, it's not for everyone, and renting has become an option worth considering. However, it's clear that renting has also become more competitive, especially when you consider the availability of rentals, the percentage of occupied apartments and the share of new apartments in these ten (out of 20) areas. 

Features of the top three rental markets

Miami — Jobs, the allure of a relaxed lifestyle and sunshine pushed Miami into first place as the most competitive rental market by RentCafe. But with fewer options to choose from compared to the same time last year, the competition among apartment hunters is considerable. 

For example, at the onset of the 2024 moving season, a mere 3.5% of the apartments for rent in Miami were on the market for potential renters. As a result, this led to a staggering 73.6% of apartment residents choosing to renew their lease rather than move out. For that reason, it can take 36 days for the average apartment to become occupied in Miami, with 19 renters competing for each unit. 

Suburban Chicago — Coming in second, up from tenth place last year, suburban Chicago — Naperville, Joliet, Crystal Lake, Elgin, Northbrook, Evanston, Glenview and Schaumburg, are increasingly popular with Millennials looking for better (and more affordable) housing options outside of the city of Chicago. 

But as renters move to Chicago’s suburbs, they are faced with high occupancy rates and current tenants choosing to renew their leases. For that reason, there are roughly 13 prospective renters competing for each available unit, and it typically takes over 40 days to fill a vacant apartment.

Northern New Jersey — In small cities across northern New Jersey, such as Hoboken, Jersey City, Newark, Union City, Passaic, Maplewood and Montclair, renters enjoy walkable downtowns, adequate entertainment, and relatively easy access to New York City. These are just a few reasons North Jersey came in third on RentCafe’s list of this season's hottest rental markets.  

Even so, finding a rental in North Jersey is challenging, as highlighted by the 96% occupancy rate — one of the highest in the country — and a 71.7% lease renewal rate at the beginning of this rental season. Vacant apartments are snatched up within 43 days, with 13 prospective renters for each unit. 

What are the best small markets for rentals?

Like larger rental markets, small markets tempt potential renters with shorter commutes and less traffic, small town hospitality and a slower pace of life. The hottest ten small rental markets include:

1. Lehigh Valley, PA
2. Madison, WI
3. Providence, RI
4. Fayetteville, AR
5. Little Rock, AR
6. Lafayette, LA
7. Harrisburg, PA
8. Palm Beach, FL
9. Worcester - Springfield, MA
10. Jackson, MS

RentCafe's research team analyzed Yardi Systems apartment data across 137 rental markets in the U.S., which were ranked based on a market competitive score. The full report can be found here. 

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“Street names are an often overlooked factor when deciding where to buy housing,” commented a spokesperson from Agent Advice. “A pleasant-sounding road name or one located by a desirable geographic feature can greatly influence the attractiveness to a buyer. Our research shows that roads with names related to bodies of water, rocky features, vistas, and a sense of privacy experienced higher-than-average property values compared to the national median.”

The study collected data on addresses and home prices in each state (76,889 total). Researchers assigned a median value to each of the words within a given address, based on the corresponding home's price. After identifying the median house price for each word, this value was compared to the US national median value ($387,600) to determine the effect of the street name on the home's price. 

Here are the names that could boost your house value, along with the average increase above the US median. 

The best street names

Earthy road names that could boost your home value:

1. Peak ($253,007)

2. Mesa ($157,722)

3. Heights ($131,874)

4. Point ($111,227)

5. Highland (95,373)

6. Gulch ($79,900)

7. Rock ($78,937)

8. Ridge ($60,541)

9. Canyon ($57,160)

10. Valley ($12,075)

Aquatic road names that could boost your home value:

1. Atlantic ($930,900)

2. Water ($230,625)

3. Bay ($129,202)

4. Reserve ($93,845)

5. Brook ($92,233)

6. Pond ($77,437)

7. Spring ($34,746)

8. Lake ($32,629)

9. Creek ($15,293)

10. River ($9,618)

Out of these road names, Creek, Lake and River were the most common. 

Royal road names that could boost your home value: 

1. Queen ($760,400)

2. Charles ($563,650)

3. Saint ($152,233)

4. Andrew ($32,345)

It makes sense that these street names would increase the value of a property, as aquatic and earthy names indicate your home is located in an attractive environment. Who doesn't want to look out their window and see the mountains or live right on the water?

On the other hand, streets named after Confederate generals and related themes were found to bring lower home prices. According to Bloomberg, Confederate addresses sell for 3% less on average than similar homes on nearby streets that aren’t named after Confederates — a home-sale discount of about $7,000 on a $240,000 home. Agent Advice also found that streets named King or Kings were undervalued by one quarter compared to the US median. 

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However, certain developments in the law combined with the advent of Airbnb- and Vrbo-related sectors can result in losses from rental real estate being characterized as nonpassive and, thus, being available to offset nonpassive income. For this to happen, the taxpayer must “materially participate” in the activity, and the activity must not be treated as a rental activity. 

Know the rules

Regulations issued under the passive activity rules provide that a taxpayer materially participates if he/she: 

• Engages in the activity for over 500 hours during the year.
• Participates in the activity for the taxable year and their activity constitutes substantially all of the participation in such activity of all individuals for such year.
• Participates in the activity for over 100 hours during the taxable year, and such individual’s participation in the activity for the taxable year is not less than the participation in the activity of any other individual for such year.
• Engages in a significant participation activity for the taxable year, and their aggregate participation in all significant participation activities during such year is over 500 hours.
• Materially participated in the activity for any five taxable years (whether or not consecutive) during the 10 taxable years that immediately precede the taxable year.
• Engages in a personal service activity, and the individual materially participated in the activity for any three taxable years (whether or not consecutive) preceding the taxable year.
• Based on all of the facts and circumstances, the individual participates in the activity on a regular, continuous and substantial basis during such year (i.e., over 100 hours).
  

However, an activity is not treated as a rental activity if:

• The average stay of a guest is no more than seven days.
• The average stay of a guest is 30 days or less, and significant personal services are provided by or on behalf of the owner on par with the services a hotel would provide.
• Extraordinary personal services are provided by the owner (i.e., services that are not incidental to the property).
• The rental of the property is treated as incidental to the nonrental activity of the owner.
• The property is available during business hours and is not exclusive to any one guest.
• Any part of the property for use in activities conducted by a partnership, S corporation or joint venture in which the property owner has an interest is not a rental activity.

To deduct otherwise passive losses against nonpassive income, the landlord must satisfy at least one of the material participation tests and one of the exceptions to rental property treatment. Most Airbnb landlords can meet the second or third items of the material participation tests and the first exception above.

Kiplinger Advisor Collective is the premier criteria-based professional organization for personal finance advisors, managers, and executives. Learn more >

Don’t forget depreciation

Most people do not realize that their short-term rentals can reduce their tax liability while simultaneously earning them extra cash. This is because of the depreciation deduction, which does not require a corresponding outlay of cash. A taxpayer is not allowed to deduct in one year the entire cost of the short-term rental property but must instead recover the cost of the property over several years. Depreciation deductions can turn rental profits into tax losses. Because a short-term rental period is usually 30 days or less, the IRS classifies it as a commercial property with a depreciation period of 39 years.

Depreciating property over 39 years doesn’t yield a big annual expense (about 2.5% of the cost each year). However, there are ways to accelerate the depreciation deduction and, thus, increase the annual expense. The landlord can arrange for a cost segregation study. Such a study reclasses a portion of the real property into assets that have shorter depreciable lives, which results in an increased depreciation expense and bigger tax savings for the property owner.

Track your expenses

The landlord must learn which expenses are deductible and keep track of them. Allowable tax deductions include mortgage interest, property taxes, travel and transportation expenses to and from the property, maintenance and repairs, utilities, legal and professional fees, insurance premiums and more.

Keeping track of expenses is necessary to maximize the tax savings. Using bookkeeping software or keeping a spreadsheet of income and expenses is a good practice. Or simply get a separate credit card and use it only for the expenses having to do with the rental property. At the end of the year, your accountant can take the credit card’s annual summary to complete the tax return.

Short-term rental properties can be profitable from both a business and tax perspective. However, it is important to follow all the necessary rules and methodically keep track of income and expenses. One should always consult with a tax adviser to determine if this process is a good fit.

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“It’s a personal financial management tool that enables homeowners to convert the home equity into loan proceeds," says Steve Irwin, president of the National Reverse Mortgage Lenders Association. “Homeowners can access this money without having to sell, move or take on monthly loan payments.”

However, these products can have some sizable risks and drawbacks, which the celebrity spokespeople gloss over. If you’re considering a reverse mortgage, here’s what to know.

1. You have multiple ways to tap into your home equity 

A reverse mortgage allows you to borrow and spend your home equity, that is, the value of your home that you’ve paid off. You could collect a lump sum. You could also set up ongoing monthly income payments, either for a set period or guaranteed to last as long as you’re living in the home. You could set up a line of credit to tap into at your convenience.

If you still owe some amount on your mortgage, a reverse mortgage can pay off the remaining debt so you no longer owe monthly payments. If you want to move, you could use a reverse mortgage to pay for your new home. That way, you don’t have to sell first to free up money to buy. 

2. Payouts depend on a few factors 

The amount you receive for a reverse mortgage depends on the value of your home, your total equity and age. The older you are when you apply, the more you receive. That’s because these loans are usually repaid only after the applicant passes away. If you’re married, the payout is based on the age of the youngest spouse.

Interest rates also matter. When interest rates are high, like now, you receive less because more of the equity goes towards the borrowing cost. Most reverse mortgages are insured and regulated by the Federal Housing Administration (FHA). The government sets a borrowing limit for these FHA reverse mortgage loans. It’s up to $1,149,825 maximum in 2024, even if your home is worth more. 

These lenders don’t check your income or credit score. You qualify based only on your age and your home’s property value.

3. Fees can be costly 

When you take out a reverse mortgage, the lender deducts an upfront fee. It also charges interest over the life of your loan. Reverse mortgage interest rates are usually higher than conventional mortgage interest rates, but similar to rates on home equity loans. 

For example, a married couple owns a $750,000 home in Washington, D.C. The youngest spouse is 75. They could potentially borrow up to $258,699 through a reverse mortgage, according to a calculator from the reverse mortgage association. Alternatively, the couple could receive around $2,000 in ongoing monthly income. The loan would charge $25,551 upfront for fees and costs, and has a 7.5% annual adjusting interest rate. 

Assuming the couple borrows the full $258,699 upfront, lives for another 15 years, and the interest rate averages 7.5% during this time, the debt would grow to around $765,000. The heirs would need to pay this debt after selling the home, keeping any remaining equity after property appreciation to themselves. 

A reverse mortgage can be costly versus a home equity loan because of higher upfront fees, but then you have ongoing loan payments. “A reverse mortgage is meant for someone who doesn’t have cash flow,” says Derek Miser, president of Miser Wealth Partners in Knoxville, Tenn.

4. There’s a minimum age limit 

You must be at least 62 to take out an FHA reverse mortgage. If you’re married and only one partner is over 62, you could still take out a reverse mortgage. The lender would classify the younger partner as an eligible non-borrowing spouse and reduce the payment to account for their age.

There are private proprietary reverse mortgage loans that aren’t FHA-insured and have more flexibility to set terms. Some of these products accept applicants as young as 55. Private reverse mortgages could also extend credit beyond the $1,149,825 cap for FHA loans. In exchange, these private reverse mortgages may charge higher interest rates.

5. You don’t owe loan payments while living in the home 

Reverse mortgages do not require ongoing payments while you’re alive and still living in the home. The loan only comes due after you move elsewhere or pass away. At this point, you or your heirs can sell the property to pay off the reverse mortgage, keeping any sale proceeds above the outstanding loan. If your family wants to keep the home, they could refinance the debt to a new primary mortgage.

“Be sure to coordinate strategies with your beneficiaries so they are ready to make arrangements upon your death,” says James Enriquez, a financial planner with Strategic Insights Financial Planning Group in McAllen, Texas. That way, they aren’t surprised and upset by the smaller inheritance.

Reverse mortgages are non-recourse loans. They are only secured by your property. If the total reverse mortgage debt exceeds the resale value of your home, the lender can’t go after your other assets or heirs for repayment.

6. Cover taxes, maintenance, and insurance, or else 

As part of a reverse mortgage contract, you agree to continue paying the ongoing property taxes, homeowner’s insurance, and maintenance. If you don’t, the lender could foreclose and seize the property because you aren’t protecting the asset securing the loan.

Several top reverse mortgage lenders faced six-figure fines because they didn’t properly disclose this condition. Their ads made it seem like it was impossible for seniors to lose their homes with a reverse mortgage when they could by breaking the contract terms. The government felt this was deceptive advertising.

Keep in mind that you’ve already been paying insurance and property taxes for years as a homeowner and wouldn’t run into problems so long as you keep doing so, says Miser, the financial advisor from Tennessee. “If you don’t pay your property taxes, the government would eventually place a lien and auction the home anyway.”

7. You and your spouse are protected, but other family members are not

The government strengthened spousal protections for reverse mortgages in 2014.

“Years ago, there were cases of people removing their younger-than-62 spouse from the home title so they could take out a reverse mortgage, “says Enriquez. “When the older partner died, the lender would try to foreclose on the surviving spouse. Today, they can remain for the rest of their lives.”

However, these protections do not apply to other family members. If you take out a reverse mortgage, the loan will be due after you pass away or move. If your family member can’t cover the debt, they could lose the home.

8. You meet with an independent counselor first 

The government requires you to meet with an independent, third-party counselor who doesn’t work for a lender before you can take out a reverse mortgage. 

“During this session, you’ll discuss how these products work, the payment plan and the attributes. You’ll also compare against other options, like selling and downsizing or borrowing using a home equity loan,” says Irwin from the NRMLA.

9. A reverse mortgage can support your stock portfolio 

Reverse mortgages are most commonly used as retirees get older and run out of other assets, says Enriquez, the CFP from Texas. In other words, they only use a reverse mortgage as a last resort. However, he finds there are benefits to proactively taking a reverse mortgage earlier in retirement to coordinate with your other investments.

For example, you could set up a line of credit reverse mortgage early in your retirement, locking in the value. If the stock market dives, you could spend down the line of credit while your portfolio recovers.

10. Review multiple lenders before applying 

You should get quotes from multiple lenders for a reverse mortgage, the same as any home loan. AAG (American Advisors Group), Finance of America Reverse, Longbridge Financial and Mutual of Omaha are a few top options. Lenders typically present the loan information in a one-page document, including the fees and amount you’d receive under different payout options.

While you need to review your options carefully, reverse mortgage lenders have a worse reputation than they deserve, says Miser. “There’s a lot of poor information and guidance out there which creates the suspect nature. While reverse mortgages aren’t for everyone, they can make sense for someone who needs an extra lifeline.”

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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