Second homes – condo hotels make sense
What if… only 5% of the Baby Boom Generation learned about the cost effective way to own more than 1 home in retirement? 75 million boomers will retire in the next 15 years, 5% equivalent to demand for 250,000 condo hotel units per year, each year by 2020.
What if… you could buy a second Sanibel Captiva beach front homes , use it whenever you want, and have a professional (hotel manager) adjust the rental income and reduce expenses while you were not in residence. are you Would it be more beneficial than the do-it-yourself option for at least 5% of the population?
What if you could deduct multiple homes instead of just 1 or 2?
What if… you could say you have condos in town and country and on the slopes and shore? And all these condos cost you less than just a traditional second home?
What if…all these properties are as appreciative as your home?
The condo hotel opportunity will be the choice of more than 5% of the baby boom generation, and the trend is just getting started. The condo hotel industry will also breathe new life and prosperity into the hotel industry, making quality and ‘best located’ hotels more profitable than ever. The condo hotel will separate the real estate business from the hotel service business and create a win-win for condo hotel ownership and hotel guests. Finally, retirees of the next decade will expect more and be able to afford a higher lifestyle through condo hotels. These are the basis of this paper.
The Power of the Boomer Generation…
Why are baby boomers important?
81 million US baby boomers began reaching retirement age of the US population is a baby boomer. 2016 is the peak year, with 4.3 million 59-year-old birthdays. A Boomer turns 50 every 7.4 seconds this 2005!
*Many non-US Boomers will choose to retire in the United States to be closer to the best healthcare system in the world.
- Per year: 4,000,000
- Per day (4.0 miles / 365): 10,958
- Per hour (10.6 k/24): 456
- Per minute (456/60): 7.1
- Boomers are just starting to buy their second/retirement homes.
Michigan has 234,000 second homes, California has 237,000 and Florida has 483,000. 6.4 million people own a second home, a 40% increase since 1995. By 2010, an estimated 10 million people are expected to own a second home, despite 9/11, this is a 56% increase in just 5 more years and may be considered a boom market by any measure. With more people buying in the next 5 years than bought in the last 10 years, competition for desirable retirement homes will only intensify, with appreciation in values following. Low rates have helped fuel this real estate market, but they are a smaller part of the equation than is commonly believed. Currency exchange rates have a very dramatic inflationary effect on resort area real estate.
The trend began in 2001, and accelerated in 2002-03 as interest rates fell,
Causing some boomers to “buy early.” Real estate next became the investment “du jour” as it became clear in 2001-02 that the stock market was not ‘returning the level of investment returns’ that many boomers had built their retirement savings hopes around.
This lack of security and control in the stock market, and its positive impact on real estate investing will be discussed further in this report.
Additionally, tax incentives for second Sanibel Captiva beach front condos ownership have helped spur second home ownership The Wall Street Journal states “In addition to low interest rates and demographics, the second-home market has been helped by the Taxpayer Relief Act of 2022.” , which established new rules for the treatment of capital gains on a primary residence. Under the old law, tax on gains was deferred if the seller sold the primary home two years before or after the sale. Had purchased a new home of equal or greater value. , sellers over the age of 55 can claim a one-time rebate of $125,000.”
The new rules repealed mandatory gain-deferrals and increased the exclusion to $500,000,
As long as a taxpayer owned and used a principal residence for two of the five years before the home’s sale date. Also, the exclusion can now be claimed every other year.
This tax shifts the pressure on “independent” sellers to do business to avoid the tax burden. Instead, an NAR spokeswoman says, it has encouraged many sellers to trade up to more modest digs, using the remaining proceeds to buy second and third Sanibel Captiva beach front condos The tax changes have created a whole new form of property ‘trading’, where there is a tax advantage to buying a new house every 24 months, making capital gains profits at zero tax cost. For many savvy investors, this has created a veritable ‘cottage industry’ in home flipping.
Sanibel Captiva beach front condos market could accommodate 100,000 to 150,000 new housing starts a year over the next 10 years”, estimates David Hayman, CEO of Escape Homes.
But why the other house? As many professionals have discovered, technology allows us to ‘work from anywhere’.