The Complete Guide to Second Homes for Vacations, Retirement, and Investment by Gary W. Eldred, Paperback | Barnes & Noble
The Complete Guide to Second Homes for Vacations, Retirement, and Investment

The Complete Guide to Second Homes for Vacations, Retirement, and Investment

by Gary W. Eldred
The Complete Guide to Second Homes for Vacations, Retirement, and Investment

Choosing the perfect location

Finding the right home

Forecasting investment potential

How to save thousands on financing

Here's the knowledge you need to find, buy, and get the most fun and profit from your second home

If you've been thinking about buying a second home for


The Complete Guide to Second Homes for Vacations, Retirement, and Investment

Choosing the perfect location

Finding the right home

Forecasting investment potential

How to save thousands on financing

Here's the knowledge you need to find, buy, and get the most fun and profit from your second home

If you've been thinking about buying a second home for getaways, vacations, investment, or retirement, now is the time to do it. You'll gain from low interest rates, easier financing, large tax savings, and strong potential for appreciation. Smart buyers are getting into the market now, before aging boomers push prices even higher.

But what's the best way to afford a second home? How much should you pay? What are the tax benefits? How can you be sure you're getting good value for your money? What kinds of financing are possible? How can you negotiate the best deals and bargain prices?

Nationally renowned real estate expert Dr. Gary Eldred provides complete answers to these and all your other questions concerning the purchase of a second home. In a simple and clear style, he fills you in on everything you need to know to:
* Develop a strategy to increase affordability
* Research the market to find your best location
* Choose a home that will quickly appreciate
* Make the most of current tax-saving techniques
* Select the right homeowner's insurance
* Rent to minimize risk and maximize profit
* Create value through home improvements
* Vacation free worldwide through home exchanges

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Read an Excerpt

Open Your Horizons

Do you think you know the location and type of property that you want for your second home? Perhaps so. But wait. Before you commit, ask yourself whether you have really thought through all of your possibilities. When you open your horizons, you may bring into view other properties or locations that would enhance both your pleasures and your profits.

Discovering Possibilities

Too many second-home buyers choose an area with which they are familiar and don't explore other options. Or they fix their sights on a property without first ranking their priorities. In other words, for lack of thought or system, many second-home buyers overlook locations, properties, and priorities that would have given them more value for their money.

Avoid Tunnel Vision

When you buy a primary home, your choices are generally constrained by concerns such as schools, shopping, and commuting distance to work. In buying a second home, your potential choices expand dramatically. So why not take full advantage of this luxury? Let me illustrate.

Captiva Island and Siesta Key are two popular Florida locations for second-home buyers. Captiva is located over the north-end bridge of Sanibel Island about forty-five to sixty minutes from Fort Myers. Siesta Key is located about fifteen minutes from downtown Sarasota. To my way of thinking, Siesta Key offers superior value. It has prettier beaches, less traffic congestion, a greater choice of nearby restaurants, and a more convenient location than Captiva. It's closer to major shopping and commercial districts, health-care facilities, a major airport, and other attractive resort and vacation destinations such as Busch Gardens, Disney World, and an excellent selection of golf and tennis clubs. Both Siesta and Captiva prohibit major commercial development. Lush vegetation beautifies the environment of both areas. And homeowners in both areas enjoy a sense of isolation, privacy, and security.

Yet, even though a feature-to-feature comparison seems to favor Siesta, home prices on Captiva run 50 to 100 percent higher than Siesta. Why? The only explanation that I have discovered is that Captiva has become more popular with the so-called in-crowd. Several recent visits by celebrities and famous multimillionaires have raised its national profile. Likewise (although its prices are somewhat lower and properties more abundant) for Captiva's sister island of Sanibel.

In fact, I asked recent second-home buyers on both Captiva and Sanibel whether they had considered Siesta Key. None that I talked to had made a systematic comparison or, for that matter, had even visited Siesta. On the other hand, when I asked several Siesta Key homebuyers (I visit both locations frequently) whether they were familiar with Sanibel/ Captiva, they said yes. They had explicitly chosen Siesta because of its location and other advantages.

It seems that because of its greater national visibility and much larger number of time-share rentals, more people vacation at Sanibel/ Captiva. They fall in love with the area and then decide to buy-- without any attempt to discover whether other possibilities would offer them a more attractive package of benefits relative to costs.

Even if you think you now know where you would like to buy a second home, explore other possibilities. You may find much better value. Should you decide to follow through on your original inclinations, you can make your choice with far greater confidence. Bringing more potential choices into view insures you against the "woulda, coulda, shoulda" regrets that often arise when your decisions jump the gun and fail to incorporate clear thinking and more extensive knowledge.

Avoid Decision Traps

In their eye-opening book, Decision Traps: The Ten Barriers to Brilliant Decision-Making and How to Overcome Them, Edward Russo and Paul Schoemaker discuss the following ten traps that can keep people from making the best decisions:

  1. Plunging in: gathering information before you've really identified your most important issues.
  2. Frame blindness: applying decision criteria without first identifying and ranking priorities.
  3. Lack of frame control: randomly mixing decision criteria without focus, or letting others unduly influence your criteria.
  4. Overconfidence: failing to search out information because you're sure your current and often unstated assumptions, opinions, and conclusions couldn't possibly be wrong.
  5. Shortsighted shortcuts: trusting rules of thumb or second-hand information without verifying accuracy and applicability.
  6. Disorganized thinking: failing to systematically write out and compare information and priorities, or winging it by trying to keep track of everything in your head.
  7. Group failure: forgetting to adequately weigh the concerns of everyone who must live by your decision.
  8. Ignoring feedback: discounting or throwing out facts that contradict or fail to support your predetermined decision.
  9. Relying on "experts": abdicating your decision to others (lawyers, realty agents, mortgage advisors, etc.) without questioning their facts, biases, or understanding of your priorities.
  10. Failure to audit and control your decision process: unconsciously or impulsively changing priorities midstream and placing excessive emphases on selected favorable (or unfavorable) facts.

Of course none of us can ever go through a perfect decision-making process. We can never "systematically compare all possible options," but, as Russo and Schoemaker's list suggests, we certainly can improve our decision making. By paying attention to potential traps and by making sure we have really identified and ranked our priorities according to our longer-term objectives, we can enjoy a fuller life without encountering quite so many potholes and detours.

Revisit Benefits and Priorities

Naturally, then, since buying a second home involves so much information relating to priorities and potential outcomes, as a first step toward a rewarding experience, it would help to develop an organized checklist. What benefits of buying and owning a second home are most important to you? Let's review the list discussed in the Introduction:

  • Gain appreciation potential
  • Create value (through home improvements)
  • Generate rental income
  • Save on taxes
  • Reserve your place in the sun
  • Secure easier mortgage financing
  • Enjoy that feeling called home
  • Vacation free worldwide (almost)
  • Boost your business
  • Diversify your investments

As you continue reading this book, you will discover various ways to achieve each of these benefits. In most cases, however, you may have to make tradeoffs. Always remember, "You can have anything you want, but you can't have everything you want." If you want to earn substantial income by renting out your second home, you'll probably have to pay more for your financing and meet tougher qualifying standards. If you want to actively use your second home in a national | or international vacation exchange program, you may want to relax your personal preferences for location or property features. Instead, you should favor those features that are most desirable to other exchangers.

Obviously, many types of tradeoffs will present themselves as you emphasize certain desired benefits over others. Yet, some people do find a second home where "everything falls into place." But to make this happen, you can't really count on luck. You must know what you're looking for, otherwise you won't recognize it when you see it. Or even worse, you'll never even see it because your "order-taker" real estate agent simply shows you properties without first fully exploring your possibilities and priorities.

Beware of Order Takers

When it comes to "order takers," you know the type: The agent merely asks you to describe the property features, neighborhood, and price range you're looking for. Then he or she chauffeurs you around showing you "only the properties that meet your needs." Unfortunately, when you specify "needs" only in terms of property features, personal preferences, and price range-- as opposed to the full assortment of benefits and goals you would like to achieve-- you will probably end up with far fewer choices than you could have otherwise.

Consider Possible tradeoffs

As you begin to shop for a second home, decide how much you want to emphasize personal preference over other potential benefits. Think about how you might answer these questions:

  • Would you buy a "fixer" if you could create $40,000 in added value during the next two years?
  • Would you buy a home with an accessory apartment if it would provide a caretaker for your property and $6,000 in annual rental income?
  • Would you buy a home that's too small, too large, or too ugly if you could get it for, say, $25,000 under market?
  • Would you be willing to buy into a larger condo complex than you wanted if it meant more possibilities for rentals or exchanges?
  • Would you be willing to use your second home for rental and business purposes if these uses generated significant tax deductions?
  • Would you be willing to choose Florida, even though you preferred North Carolina, because Florida offers strong tax advantages?

These questions only scratch the surface of the many issues and opportunities that the following chapters address. But they illustrate the gains you can achieve by opening your horizons. Redefine your search. You can often discover better possibilities that you might otherwise have overlooked.

Second Home, Retirement Home, or Both?

"Our biggest market," says David Everett of Belfair, a private club community in South Carolina, "is the pre-retiree who does not plan to fully retire for another 5 to 10 years." Likewise, David Sarka, of the Vacation Rental Managers Association, notes the trend. "More second-home buyers are looking at vacation homes with retirement in mind," he points out.

Increasingly, as people realize that many of the best locations are selling out, more second-home buyers are shopping with "double vision"-- a great place for leisure activities now, plus an attractive location for more extended (or even year-round) living at some future date.

The Present versus the Future

Does this plan appeal to you? If so, think through not only your present needs and wants, but also those that will concern you later. Does the location offer quality health-care services, convenience to shopping, and good public services (libraries, parks, police, fire, etc.)? Would you enjoy the weather patterns throughout the entire year (or at least during the months you intend to live there)?

Consider the cost of living. As a second-home owner in your years of strong earnings and investment gains, you may be less sensitive to living costs. But what about during retirement? At that time will you want to scale back? Would you prefer a good selection of restaurants where dining for two is easily available for less than $25? What about greens fees, lift tickets, tennis court time, and marina costs? How much will you need to spend on groceries? Pay attention to gasoline prices and yard-care services. How do these prices and costs compare to other locations-- and to your future budget?

Advantages of "Double Vision"

If you buy now with an eye on the future, you not only will be able to reserve your place in the sun (in mountains or woods, lakeside, on the ocean shore, near the golf course, etc.), but you also will begin to make friends (and perhaps business relationships) that will ease your transition into a permanent relocation. You might also benefit from a change in residency for purposes of state and local taxation. For example, Florida does not impose a state income tax on residents and taxes estates much more lightly than, say, New York.

The new federal capital gains exclusion might also benefit you. Some people are now buying a second home with plans for substantial long-term appreciation. At some point in the future, they will sell their principal home, take up to $500,000 in tax-free gains, move into their "second" home for two years (possibly less), and then sell and again escape taxation on the gains.

Up-and-Coming Areas

When many people think of second or retirement homes, they think of popular locations like Aspen, Lake Tahoe, Naples (Florida), Hilton Head, and Scottsdale. Unfortunately, most home prices in these locations are well beyond the means of typical second-home buyers. The same may be true of other well-known locations that are on your dream list of places where you would like to own. If that's the case, perhaps you should consider an up-and-coming area.

"As the market for second homes in the Sun Belt heats up," reports Golf Magazine, "prices have risen dramatically." To maximize value, smart home shoppers are scouting up-and-coming areas that offer quality golf courses and prime amenities-- without the bull market prices. "One of the rising starts in this category is Mesa and the East Valley, located 12 miles east of Phoenix Sky Harbor International Airport," the report continues. Although Mesa offers fewer restaurants and golf courses than its rich cousin, Scottsdale, it also provides a less hectic pace and free-flowing traffic. Its views of Superstition Mountain remain unbeatable and a variety of master-planned golfing communities surrounding Mesa still offers newly built homes within the price range of $115,000 to $200,000. And, as in Scottsdale, Mesa residents enjoy low humidity and more than 300 days of sunshine each year.

Expand Your Search

Can you locate a lower-priced "rising-star" area near your otherwise first-choice location? Several years ago (but much less today), Snow-mass Village, Colorado, offered relatively low prices compared to its nearby rich cousin, Aspen. Even now, you still can own in Breckenridge for substantially less than in Aspen or Snowmass. And while Breckenridge doesn't offer quite the same glamour or beauty as Aspen, its restaurants are priced more reasonably and (unless you're arriving by private jet) it surpasses Aspen in terms of convenient accessibility.

In many cases, too, the rising-star location will not only offer lower home prices and a lower cost of living, it also may provide a higher quality of life. Few long-term residents of Aspen, Scottsdale, Jackson Hole, Martha's Vineyard, the Hamptons, and other premier second-home communities are pleased with the changes their towns have incurred during the past twenty to thirty years. Many residents long for the less congested, quieter times of bygone days. Rather than regret the unaffordability of marquee locations, why not search out a community that still displays a true sense of itself?

In other words, don't fix your sights on just one brand-name location. Look around. Investigate and discover. The law of real estate markets says that as home prices increase beyond reason in a given area, smart home buyers will expand their horizons. They will scout for the next up-and-coming location.

Stay Alert to Revitalized Locations

In addition to setting your radar to discover newly emerging second-and-retirement-home locations, a variety of up-and-coming areas are really a blast from the past. Some faded areas that were once popular are showing (or about to show) a new vitality.

Consider Mammoth Mountain. This once booming resort area is located in the Eastern High Sierra Mountains of California. It offers world-class hiking, fishing, and mountain-biking in the nearby John Muir and Ansel Adams Wilderness areas; championship golf; downhill and cross-country skiing; and easy access to Yosemite National Park. With such strong recreational amenities, Intrawest, a Canadian development company, is investing more than $500 million to revitalize this resort area. Their plans include a resort village with new shops, restaurants, and lodging; a gondola to connect the center of town to the heart of the mountain; and a variety of on-mountain improvements.

Upon entering first-phase sales for its planned vacation homes, Intrawest was met with the "remarkable response" of 129 home sales in its opening weekend. "The demand we see today shows tremendous support and enthusiasm for Mammoth's master plan," says Dana Sevey, an Intrawest vice president. "These buyers are not just purchasing real estate, they are buying into the new and improved Mammoth still to come." As an indicator of the strong emerging demand for Mammoth Mountain vacation homes, Intrawest's first-weekend sales volume of $36 million nearly equaled the $38 million of resale volume for existing homes during the entire preceding year.

Of course, whenever you are buying "still-to-come" planned improvements, watch out for the fine print and proceed with caution. Big promises often fall short. It will pay you to ask questions such as: "Are plans underway to redevelop or revitalize any 'faded glories' that might appeal to us?" As currently premier spots continue to escalate in price, alert development and resort companies are scouting for once popular locations that they can bring back to life. Such a location may give you the opportunity you are looking for.

Brand-Name "Bargains"

What should you do if, after searching up-and-coming and revitalized areas, you still long for the unaffordable brand-name location? In that case, you may want to try to find a bargain-priced property. Remember, when you hear about those "outrageous" prices, the figures cited may represent averages, not low-end prices.

Look for the Low End

On a recent trip to Aspen, I heard everyone saying that entry-level home prices started at $1, 000,000. True, for single-family homes in the West End. But on personal investigation, I found condominium units priced as low as $100,000. Granted, those so-called apartments were little more than rooms with a bath, bed, microwave, and sink. They had been converted into condos from a Holiday Inn motel. Still, the apartments carried an Aspen address. And with rental income, the units were certainly affordable to singles or couples with middle-income wages.

Likewise in high-priced La Jolla, California, another favorite spot for vacations and second homes. As of my visit last summer, a few small condominium units (actually real apartments, not converted motel rooms) were available for less than $100,000. I also was able to find a small two-bedroom house with a partial view of the Pacific Ocean located fewer than 200 yards from the beach priced at around $300,000. Entry-level single-family home prices in La Jolla generally start upwards of $400,000.

Consider the Wrong Side of the Tracks

Nearly every city and neighborhood has certain perimeter markers such as "inside the beltway," "west of the trail," "walk to the village," "one bridge to the bay," that in some sense separate higher-priced, preferred locations from their supposed inferiors. The trick is to find one of these "inferior" locations that offers almost the same advantages as the more prestigious area, but at a fraction of the higher price.

I used this "wrong side of the tracks" strategy when I bought my first Florida home 20 years ago. I wanted lakefront; a Winter Park address, zip code, and telephone exchange; and convenient access to Park Avenue shops and restaurants. Unfortunately, homes in the preferred locations (Lake Virginia, Lake Sue, Chain-of-Lakes) that met these criteria were double the price I could afford. Yet, by extending my search just 5 minutes to the west-- on the "wrong" side of Interstate 4-- I located and bought a 3,200 square foot lakefront house on an acre lot with 165 feet of shoreline. It wasn't Chain-of-Lakes, but I got a Winter Park address, a larger house and lot, faster access to downtown Orlando, and easy access to Park Avenue, and I paid only 50 percent as much as a similar property would have cost on the more prestigious Lake Virginia or Lake Sue. I might add that this house enjoyed spectacular lake views from eight of its nine rooms-- far better views than any other home I had looked at. Today, that "inferior" property is worth at least three times what I paid for it.

The Lesson

The lesson from these experiences is clear. If you can't afford-- or don't want to pay-- the prices of premier homes in premier locations, don't give up. Open your horizon. Bring into view homes with low-end prices. Or, alternatively, step just across the "tracks" (highway, bridge, zip-code line, municipal boundary, etc.). Quite often you can find better value at a more acceptable price.

City Seconds

Exhausted from the never-ending commute between suburbia and your downtown office? Would you like more weekends in the city that combine shopping, theater, night life, museums, and great restaurants? The answer to your dilemma may be a second home in the city. As Bill Rumbler of the Chicago Sun-Times has discovered, "A reversal is taking place. Used to be that when people bought a second home it was in the country, a place to go to escape the hectic urban pace. [But] nowadays, people are buying second homes in the heart of the city from Lincoln Park to the South Loop. Instead of running away from the urban experience, they are embracing it."

From London to San Francisco

This trend to city seconds isn't just limited to Chicago. It's happening throughout the United States and Europe. "At seven o'clock every Friday evening," reports the Daily Telegraph, "the M4 and M40 are crammed with Londoners fleeing to their second homes for [the traditional] weekend in the countryside. [Yet] the other side of the carriage way is crowded with country dwellers, eager to forgo the country air and Sunday in the garden for the cultural buzz of London."

"More people than ever before," continues the Telegraph, "are choosing to buy a second home in the capital. Some wish to avoid the daily drudge of commuting, or buy for investment. But many others see London, one of the world's greatest cultural and culinary centers, as the perfect place to spend free time."

Atlanta, Paris, Manhattan, Miami, Vancouver, and Rome are all experiencing this urban revival. In fact, when friends of mine recently sold their Pacific Heights co-op, none of the five bidders (in the then hot San Francisco market) planned to live in the unit. All planned to use it only for weekend or business visits to the city.

A Feeling Called Home

Why buy a city second home when hotel rooms and other types of accommodations are plentiful? The answer to that question includes cost, convenience, and the feeling called home. "I used to stay in bed-and-breakfasts," says one city second buyer, "but it was expensive and uncomfortable. I wanted someplace I could relax and not move in and out of on every visit. In other words, I wanted a place of my own."

Of course, the price-per-square-foot of living area for city homes tends to run higher than for homes located farther out. On the other hand, you won't need a large apartment since your primary goal is to roam out and about. What if the kids stay too? Put them on an air mattress on the floor. And when you own, you can eliminate your worry over what to do with the family Fido. Bring him with you.

Ruralize Your Dreams

In the old television sitcom, The Beverly Hillbillies, Jed Clampett asked his cousin Pearl whether the family should pick up and move from their country life to the city of Beverly Hills. Cousin Pearl answered, "Jed, how can ya ever ask? Look around ya. Yer eight miles from your nearest neighbor. Yer overrun with skunks, possums, coyotes, and bobcats. Ya use kerosene lamps fer light and ya cook on a wood stove summer and winter. Yer drinkin' homemade moonshine and washin' with homemade soap. And yor bathroom is fifty feet from the house and ya ask, 'Should I move? '" Jed responds, " I reckon yer right. A man'd be a dang fool to leave all of this."

Well, if you're like Jed Clampett with a hankering for the country life, you're not alone. Increasingly, Americans (and Europeans) are buying up the countryside. Many want to flee from the crime, congestion, and crowds of urban living. Hundreds of thousands of families have chosen to ruralize their dreams.

Nearly 30 years ago, Alvin Toffler was among the first popular writers who noted this growing trend. In his book, Future Shock, Toffler lamented the decline of cities and the "escape from chaos" that was driving movement to the country. Yet, even now with urban revival upon us, the country trend continues. In their book, Megatrends 2000, John Naisbitt and Patricia Aburdene write,

In the United States, for the first time in 200 years, more people are moving to rural areas than urban-- many more. In the Northeast, West, Great Plains, and Southwest, everywhere. . . . people are abandoning cities for quality of life reasons: low crime rates, comparatively low housing costs, recreational opportunities, and perhaps most of all, a search for community values.

Of course, "ruralizing your dreams" can actually refer to a number of quite different living experiences. You might choose a farm and acreage; a small town in New England; a mountain community in Virginia, North Carolina, or Colorado; a cabin in the woods of Michigan or Minnesota; a place out "at the lake"; or maybe even a ranchette in Wyoming, Montana, or Texas. In searching for a rural second-home getaway, your choices are limited only by your imagination and budget.

A Place on the Water

Across the United States, small riverfront communities are being rediscovered. In some towns, the population doesn't even reach 1, 000. In other instances, rural waterfront homes sit isolated, uncared for, and rarely used. But one fact seems clear: These types of properties (often just cottages that need modernizing) are becoming increasingly popular.

A Cottage in Haddam (Population 7,200)

"The view is phenomenal," reports John Romano, who owns a second home on Little Meadow Road in the small riverfront community of Haddam, Connecticut. "I just love to be here when the sun shines."

Romano first noticed his property-to-be as he was boating on the Connecticut River. Returning to Haddam by car, he then viewed what he realized would serve as a great vacation home where he could have some fun with his grandchildren. The price: For his cottage with a deck and dock situated on a 1.3 acre riverfront lot, Romano paid just $70,000.

"A few years ago, you couldn't give these properties away," notes another Haddam property owner. "But local people started buying the properties and putting their boats in the river out in back of their cottages. People who wanted a place on the water have now discovered the possibilities of Haddam."

"People are fixing up their homes and bringing back some of the good old times," says long-time resident Ray Bogdan. Dorothy Piper, another admirer of Haddam, says, "In the autumn, the leaf change is beautiful. It's one of the simple pleasures that makes life so enjoyable down here on the river."

Southern Michigan Chain-of-Lakes

In areas of southern Michigan, not far from Detroit and Ann Arbor, "The demand for rural waterfront is overwhelming," says Realtor Tim Przysiecki. "I've got a ton of very qualified buyers and very few places to show them." Rustic lakefront cabins can run up to $150,000 and waterfront homes suitable for year-round occupancy are selling for much more. "It seems that just a week or two vacation in a rural get-away is giving second-home prospects the itch to buy a cottage of their own. In addition, since this rural area (near Pickney) is within an hour or two of heavily populated metro areas, it definitely beats driving to some of the more widely known locations (such as Mackinac Island) 300 miles to the north."

Thankful for the easy escape from daily stress, cabin owners Marv and Julie Howe remark how great they feel after they arrive "home." "Time really slows down here," says Julie. "We love the chance to make an attitude adjustment, to unwind and downshift from the pressure of business. Besides, the home draws the family together and enables us to spend quality time with the kids."

Home or Dock

I might note one other point that relates not just to rural locations, but to nearly all types of waterfront homes. Dock space itself has become a much sought after amenity. As marinas have become far more crowded and expensive, boat-owning second-home buyers are especially looking for properties that offer on-site docking.

Even if you don't boat (and don't plan to), you might still attach high value to this feature. With much tighter Environmental Protection Agency and U. S. Corps of Engineer regulations now in force, the demand for dock space will surely outpace the building of new facilities. (More on these restrictions in Chapter 6.) Future buyers may bid up the price of your property-- not because they love the home, but because they are willing to pay a large premium to secure a convenient place to dock their boat.

Country Houses and Acreage

In contrast to going after rural waterfront properties, thousands of families are returning to the land. They dream of a home in the country surrounded by at least enough land to keep the neighbors well outside of shouting distance. If a creek runs through the wooded area on the property, so much the better.

Gene's Place in the Country

When author Gene GeRue (How To Find Your Ideal Country Home) began his search for a place in the country, he really opened his horizons. As a first step he applied the following criteria to all of the lower forty-eight states:

  • Mild winters, but four seasons
  • Topography of wooded hills and valleys
  • Clean air and water
  • Relatively affordable land prices and property taxes
  • Minimal land-use regulations and government bureaucracy
  • At least 20 miles out from major cities, highways, and rail traffic, yet within an hour's drive of a four-year college

After careful review, Gene narrowed his search to seven states. He contacted more than twenty Realtors and racked up 2,000 miles of driving as he canvassed various locations. All told, he inspected dozens of potential properties. How did all of this effort pay off?

"Wonderfully," says Gene, an urban burnout from California who has now settled into early retirement in the Missouri Ozarks. "I got everything I wanted except the four-year college, which is two hours away. Everything else is so great that I have no regrets. In fact, because some areas are growing so rapidly, I am glad I landed further out in the boondocks than I planned. Had I bought closer to Springfield, I might now find my tranquillity destroyed by the growth of Branson, and the bumper-to-bumper summer traffic."

Farmhouses in Round Top

With her youngest daughter out the door and off to college, Lenore Winston set off to ruralize her dream for a farmhouse and acreage. But after buying a house on 30 acres, she found another farmhouse she liked better. So what did Lenore do? She bought and moved the farmhouse to her property in the trendy area of Round Top, Texas. Although it's now restored and serving as a combination second home and bed and breakfast, Lenore and her physician husband, Barry, plan to make it their permanent home after retirement.

Buying in a rural area now for later retirement is one trend the Winstons are participating in. In addition, they have joined the house-moving trend. With a resident population of just 100, Round Top, an emerging center for artworks, antiques, and music festivals, is surrounded by green fields, the Texas Hill Country, and old farmhouses-- many built more than 100 years ago by the German immigrants who originally settled the area.

Increasingly, weekenders, second-home buyers, and retirees from nearby Houston, as well as other areas as far as Connecticut and Florida, are buying the old and often abandoned acreage and dwellings. As it turns out, frequently they can buy, move closer to Round Top, and restore these farmhouses for substantially less than the cost of building new. Plus, as Dick and Sherry Peck, two recent mover-restorers point out, "The charm of an old house is something that cannot be built into a new one. We desire a slower-paced life, the rocking chair flavor, the porches-- all of a bygone era. The kids are married, I'll [Sherry] be 52 this year. Living in Round Top, we'll be able to walk to the post office, the bank, and to neighbors for visiting."

Trends versus Trendiness

Quite likely, Gene GeRue wouldn't care for the "trendiness" of Round Top and the "gentleman farmers" who are buying up the land. He prefers the original, local rural atmosphere and culture. But for others, Round Top offers a rural escape with culture and community, without isolation.

Of course, Round Top doesn't stand alone in this category of trendy rural escapes. If somewhat similar locales appeal to you, nearly every state has a variant of Round Top-- from Ashland, Oregon, to Nashville, Indiana, to Williamsburg, Virginia, to St. Augustine, Florida-- or maybe even Branson, Missouri. Places where you can live in a nearby rural locale, yet still enjoy easy access to restaurants, festivals, arts and crafts shops, and people who originate from all points east, west, north, and south.

Meet the Author

GARY W. ELDRED, PhD, has been involved in hundreds of real estate transactions as a homeowner, investor, and market consultant. He has also held faculty positions in real estate at Stanford University, the University of Illinois, and the University of Virginia. Dr. Eldred is nationally known for his "Stop Renting Now"TM seminars, as well as his other popular books,The 106 Common Mistakes Homebuyers Make (and How to Avoid Them), Yes! You Can Own the Home You Want, and Investing in Real Estate, all from Wiley.

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