9 Money Tips for First-Time Snowbirds

4. Don’t underestimate your costs

Depending on where you currently live, costs for a second home could be significantly higher than for your primary residence, Lichtenstein says. Although property tax rates are generally higher in Northern states, home insurance premiums are often significantly higher in the South and Southwest.

Florida, for example, has the highest average annual cost for a policy with $300,000 in dwelling coverage, at $5,640 per year, according to Insurify.

Other costs to consider include entry and homeowners association fees for 55-plus communities, initiation fees and membership dues for golf club communities, and, potentially, special assessments for major repairs if you buy a condominium, Lichtenstein says.

If you plan to purchase a house in a coastal area, be prepared to make more frequent repairs because of salt corrosion. “Roofs have to be replaced more frequently,” Lichtenstein says.

All that comes on top of what you’re still paying for your primary residence when you’re not living there, like keeping the heat on in the winter to prevent pipes from freezing and bursting.  

5. Do a trial run

Financial advisers and real estate agents suggest spending a few months living in a town or city before buying a second home there.

Test-driving the locale “gives you a chance to get a better feel for the area, notice things that may not be obvious during shorter visits, and determine whether it truly suits your lifestyle,” says Tucker Childs, director of wealth planning at Bradley, Foster and Sargent, an investment advisory firm in Hartford, Connecticut.

6. Consider the tax impact

States such as Florida, Nevada and Texas offer a big draw in addition to warmer weather: They have no state income tax, but you’ll need to establish residency in those states to take advantage. 

Obtaining a driver’s license, registering your car in the state, visiting doctors and dentists, and registering to vote can help establish that your winter abode is your primary residence. 

Morris says many people mistakenly assume that simply living in a state for at least half the year is enough to establish residency and qualify for the state’s tax benefits.

“Did you move your life? If the answer is no, then you still owe taxes in the other state,” he says.

If you stop paying taxes in a state where you have lived for years, he adds, you could receive a letter from that state requesting proof that your snowbird abode is now your primary residence.

7. Make sure your health coverage travels

Original Medicare, which has Part A hospitalization care and Part B doctor and outpatient care, provides health coverage nationwide. However, if you opt to purchase a Medicare Advantage plan, your coverage could be limited based on the plan you choose.

That’s because Medicare Advantage, also known as Medicare Part C, is provided by private insurers, and plans typically involve health care networks that may be regional, not national, in scope. So while an Advantage plan will cover the same services as original Medicare, its network might not cover providers in your new state, potentially resulting in extra charges.

Ditto if you’re not yet enrolled in Medicare and still using a private health plan. Check whether its network includes doctors and medical facilities near your second home. “Retirees will want to make sure they have coverage in their second state of residence or they could face higher out-of-network costs,” Croak says.

8. Check your car insurance too

All states except New Hampshire require drivers to have liability coverage for property damage and injuries to others, but the minimum required amount of that coverage varies by state.

Contact your insurance carrier to see if your policy meets the insurance requirements in the state where you’re considering buying a second home. If it doesn’t and you don’t increase your coverage, you could face penalties, such as fines or points on your license, if you get into an accident.

If you plan to spend more than half the year at your second home, you’ll need to buy car insurance in that state and terminate your current policy, says Cathy Sink, owner of Cathy Sink Insurance in Fort Myers, Florida.

“Insurance companies want you to insure your autos in the state where they are primarily used,” she says.

9. Protect your property when you’re away

Keeping an eye on your home when it’s empty for extended periods is essential. Croak suggests paying for a professionally monitored home security system or installing a self-monitored system with intruder motion detection. Professional monitoring typically costs $10 to $45 a month, according to a review of six services by CNET, a technology and consumer products website.

Surveilling your home while you’re away can also pay off if a break-in or other incident occurs and you need to file a claim with your insurance company.

Consider installing smart leak detectors in areas of your home that are particularly susceptible to water damage, such as the basement and attic. These devices will send an alert to your smartphone if water comes into contact with them, helping you to spot and address leaks before they cause costly repairs.