My Parents, the Snow Birds

I never thought the day would come. Sure, all the other Jewish parents from the Tri-State area eventually buy a winter home in Florida, but my parents weren’t like that. They were just too east coast. They were too cultured. They were too… not that.

But, after a trip to Florida and dealing with the long cold winters, they’ve decided it’s time to take the plunge and purchase a winter home. Property in Florida is relatively cheap, so I don’t think it’s a terrible decision, but it’s just kind of unsettling to me that clearly it’s that time in life when this choice makes sense to them. I’m also perplexed by the amount of money they’re putting into fixing up the northeast house (and seem to be ignoring any set budgets) while now planning on spending half the year in a whole other state.

I’m not actually surprised by my mother’s interest in the half move – she loves her summers and long days by the beach and hates winters. She also grew up in Southern, California. But my father didn’t seem to be the type. I get that he has trouble getting around now so being in a place where snow and ice isn’t an issue also makes sense, even though his cancer doctors are in NY. This whole situation is rather surreal and yet another step in everyone getting older, myself included.

This also means that I will no longer be able to take a side trip to visit my parents on work trips, which most often occur during the winter months. It’s just the end of an era, and one that I wasn’t quite ready for, despite being over 30 and needing to get over this whole ironic nostalgia for my, in reality, quite unhappy childhood.

To Invest or Not to Invest?

Another surprise from left field – after offering to help front the money for my father’s credit card bill and have him pay me 50% of the interest they would charge, and him blatantly refusing such a preposterous suggestion, now he’s throwing around the idea that I should invest in their Florida condo. And he’s not joking.

The thing is, they have the money to pay for it outright, he just doesn’t want to pull his funds out of his 401k at the moment. And it wouldn’t hurt for me to have some investment in actual real estate. I haven’t run the numbers but logically it doesn’t seem to make any sense at all. Since I’d be investing in property owned by my parents, in the long run half of that property theoretically would be owned by me whether I invest in it or not. More importantly, though, is that if I were to purchase property in Florida for my parents to live in, the tax situation would get tricky. I’m not sure how it works – would I make them pay me rent? Pay me back for the loan with interest? Or would I just remain co-owner, or heck, buy the entire thing outright?

I’ve considered buying rental property before, but not property to rent to my parents. That just sounds overly complicated. And I’m not that interested in buying a condo in a 55+ community in Florida. The other piece of the puzzle is that while I haven’t been the best at saving liquid funds for a down payment of my own, if I put money into the property in Florida I don’t think I’ll ever be able to afford a house of my own. So it seems like a really bad idea, even though it would provide the opportunity to diversify my portfolio a bit.

In any case, I have to get used to this crazy new world of my parents as “Snowbirds.” I’m not sure I ever will, but they sounded happy calling from the state, happier than I’ve heard them sound before. So that’s a good thing.

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5 thoughts on “My Parents, the Snow Birds”

  1. I don’t think I’d buy the condo for your folks for a couple reasons.
    1 – if it’s truly a 55+ community there might be restrictions on ownership and rental covenants that make the idea of you buying and renting to your parents a violation of the HOA agreements. I’d want a lawyer to review and even then the HOA can change rental rules at any time.
    2- for your parents to really get the benefit of a FL home, one of them needs to be a Florida resident (easy to get if they live there 6 months + 1 day). Then with that residency they won’t pay any state income tax and they can file for a homestead exemption on their FL property which would give them the first $50K of homesteaded property free of most tax assessments and get a 3% cap on increases. If you are a non-homesteaded owner, that would go out the window and property taxes could climb as much as 10% very year.
    Mrs PoP recently posted..It’s Not Beginning To Look A Lot Like Christmas

  2. If you’re current renting and you plan to stay in bay area for at least 5 years, you should save your money to buy a home for yourself first before thinking of investing in other people’s homes.

    1. That’s not true. Renting is much more affordable. I don’t think I’ll invest in my parent’s home though, it doesn’t make sense to buy property in a 55+ community in Fl.

  3. Good luck with renting, but remember Bay Area real estate will continue to go up over 5 to 10 years, so renting is net loss unless you can somehow make up the equity appreciation through other means. Prices have come back roaring even from the worst housing crash of 2008 to surpass the previously so called bubble levels. There’s just too much people with money who want to live and invest here. It’s a great way to build wealth.

    1. Bay Area real estate prices probably will go up over 5 to 10 years, but tying myself down into any one location = not able to take a job that pays better somewhere else. When I have kids maybe I will settle down in one place but right now it doesn’t seem to make sense. I’m in a field where I can earn enough money if I want to stay here to make up for the difference, or if I decide to leave my career I’ll move somewhere else it’s more affordable to live. I’m not sure about the stock market, but instead of putting all of my money into one house, I own a number of stocks. Maybe that’s a dumb idea, but it’s worked so far. There may be another housing crash, who knows, nothing is for sure. But I’d rather be able to access my money if things start to go south, then have it stuck in a house.

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