We own rentals in Tamarindo, Costa Rica, Asheville, NC and Jacksonville, FL. For 2021, Costa Rica was named the number 1 best place to retire by International Living. In a US News survey of best place to retire in the US, Asheville, NC was number 8 and Jacksonville, FL was number 13.
It’s no coincidence that we own real estate in top retirement destinations – that’s one of the factors we use to discover places to consider. (In this earlier post, we share some of the other factors we use when picking a geography to invest). These retirement round-ups do some of the preliminary legwork for us.
Why we like to own in retirement destinations
Reason 1 – retiring mortgage-free
Asheville was the first retirement destination we bought into. We were in our early 30’s and still in traditional corporate jobs with a traditional retire-at-65 mindset. Our plan was to buy in a place we may retire to, rent it out so that our tenants paid off our mortgage in the meantime and then retire mortgage-free to our rental. We weren’t thinking of building out a real estate portfolio then – this early purchase was more a retirement play than a real estate one.
Reason 2 – bleisure travel
In addition to retiring mortgage-free thanks to our tenants, buying in a retirement destination means these places are typically awash in fun leisure activities. After all, retirees have free time on their hands and need something pleasurable to do. This makes retirement destinations fun bleisure trips to take – a business write-off since we’re checking up on our investments that happens to be a nice place to visit.
Reason 3 – a ready pool of buyers if we change our mind
There’s no guarantee that a geography won’t degrade over time, or that the Millennials who retire after our generation will have the same tastes. But making the top of the list, at least for retirement criteria, suggests these locations have many positive advantages going for them, which gives their value some protection. Since it’s a retirement destination, it’s not likely tied to a specific employer or industry that might fall on hard times. Sure, activities could fall out of favor (Millennials seem to play less golf), but if you pick a retirement destination with a variety of activities, your pick should hold its value.
Why International Living is bullish on Costa Rica
We love Costa Rica because we love the beach, and it has many beautiful beaches. We also love its proximity to the US – a quick 4-your flight. Climate change is on our mind, as much as it is with many folks these days, and Costa Rica is a 2019 Champion Of The Earth!
International Living also looks at climate, but also housing costs, healthcare availability and quality, entertainment options, accessibility to a visa or long-term residency and even discounts for seniors. IL emphasizes places where you can live well within a typical social security budget of $2,000 to $3,000 per month. So their criteria is slightly different than ours, but since we were looking at early retirement, that low dollar amount was a welcome bonus for us (though we found ourselves spending more than $3,000 during our month in Tamarindo).
Why US News likes Asheville and Jacksonville
US News builds its retirement rankings based on surveys of people over 45. The 2020-2021 survey had 3,052 respondents, and factors included (in order of weighting): happiness (this was weighted the highest), housing affordability, health care quality, taxes in retirement, desirability, and the job market.
Asheville was cited for its creative scene, good food and down to earth vibe. Jacksonville was described as having something for everyone to enjoy – from nature trails and beaches to entertainment, shopping and business.
Fun fact: US News scored Sarasota, FL its number 1 retirement destination. 15 years ago, when we bought in Asheville, we initially considered Sarasota! Even back then, Sarasota was popular, but the housing prices had already increased, such that we couldn’t buy something that would cash flow as a rental. We wanted something we could definitely hold till retirement!
The pandemic makes retirement destinations even more of an investment advantage
While our vacation rental income dropped considerably during the pandemic (Costa Rica borders were closed from March through November) we still covered our costs renting to expats on sabbatical and looking for longer-term housing, as well as domestic tourists taking local vacations. Furthermore, the properties seem to have appreciated based on nearby sales we can see (there is no MLS for Costa Rica that serves as a one-stop shop for real estate transaction data).
I see three main reasons why the pandemic may encourage even more people to consider retirement locations, like Costa Rica and even Asheville and Jacksonville. First of all, the tough job market brought on by the pandemic may push older workers into retirement just a bit sooner. Secondly, even if people aren’t forced to retire, the downturn might prompt a come-to-Jesus, introspective moment that encourages a radical change, like an early retirement or at least a prioritization of lifestyle over work. Finally, people who don’t want to retire fully may at least want a more leisurely pace, and the Pura Vida sentiment of Costa Rica, the down-to-earth vibe of Asheville, NC and the slower pace of a second-tier metro like Jacksonville all fit those parameters.
If our next real estate investment is another property, it will likely be in a retirement destination again
We like our real estate portfolio as it is, so we aren’t itching to make another purchase anytime too soon. That said, we do love our bleisure trips, and we live the leisurely pace of retirees, even though we aren’t fully retired. So a retirement destination suits us personally, and since it makes good investment sense, that’s where we’ll look first. We loved our trip to Arizona so that’s a possibility for the US. More likely, we’ll scout abroad when borders re-open.
How about you? Have we convinced you to look at retirement destinations for your next real estate investment?
We are Scott and Caroline, 50-somethings who spent the first 20+ years of our adult lives in New York City, working traditional careers and raising 2 kids. We left full-time work in our mid-40’s for location-independent, part-time consulting projects and real estate investing, in order to create a more flexible and travel-centric lifestyle. 
Financial independence and early retirement is not something we originally focused on, but over time realized it was possible. Our free report, 
