(To the left is a link to an audio
version of this article if you would prefer to have it read to you.)
Before buying that retirement
home, think about it. Just think of all that money spent, all that work
looking after the place, and the struggle to sell it when you need to
when the market's collapsed).
In several of my articles I have gone through the maths of renting in
quite some detail, and it is clear that renting is way, way cheaper
and of course, it is more flexible, and prevents older people getting
stuck in a slow market when they want to move, often for medical
reasons. It also gives people a residual income.
There is an alternative: start using hotels for longer stays.
Moving into a hotel is slightly different. In the first instance you
have to be the sort of person who doesn't mind living in a communal
system. If you have been used to that four bed detached house, with a
large garden, situated in a quiet lane of some sleepy village, then
moving into a hotel may present a bit of a shock to the system.
I cant argue the case for personal preference. This isn't for everyone,
but if you are used to living in a flat, then I really cant see why a
hotel should be any different. You will have neighbours, but then the
folks upstairs were probably noisy where you used to live. I have to
admit that living in a hotel I have not found my living space to be
noisier than anywhere else.
Let's try and make a tally.
If you are the sort of person who likes to wander around the garden,
feed the birds, swear loudly, and maybe piss in the bushes at the end
of the garden, hotel living might constrict you a bit. On the other
hand, if you live in a hotel you wont have to sweep the floor, mend the
drains, or even do the washing up or make your bed. It depends on what
level of living you crave.
On a practical level, the cost is variable depending on the level of
comfort you require, and where you require it.
Around the turn of the century I was keen on changing my style of
living, and decided to buy into various hotel schemes. The idea is very
simple, and the way of life it leads to is, in my opinion, enviable.
The scheme works like this. You buy a hotel room, or suite. You then
rent it back to the hotel, who manage it, and pay you half the room
rate, and give you usually 30 days free usage of the room.
My idea was
to buy into six of these, and spend six months of the year roving from
hotel to hotel (in pleasant spots of course), and in between, spend
maybe three months in Europe, and three months exploring somewhere new.
Unfortunately I ran out of deals, so my own system is not working like
that. Instead, I tend to go somewhere for a month, then go somewhere
else, but there is no reason why you cant spend three to six months (or
more) in the same hotel. The longer you stay, the better the deal.
My own criteria are that I want somewhere where I dont feel
constricted, where it is quiet, and the ambience turns me on, and I
feel comfortable. I use a hotel in Bucks which I like very much, when
they get the bill right, and it costs me on average less than £50
a night. The grounds are delightful, sort of Edwardian country estate,
food is fine, the room is okay, and the whole place is quiet, and very
close to essential communications.
£50 a night is very much a one night at a time rate. For a month
I would expect to pay no more than £40 a night, or less. For
longer spells, the rate would come down even more.
Let me give you an example of my next 'home'. I shall be spending
December in Madeira. I have booked an apartment in a four star hotel,
and the rate for bed and breakfast is £1,300. That's for two
people. Remember, if I chose to stay longer I would get a better rate.
In less touristy places I get much better rates.
Down in southern Spain I pay €40 a night for two. If I stayed for a
month that rate would drop to €30.
In Central America I was paying $40 a night for one person, B & B.
The room was a lot smaller, but the courtyard was a delight, with pool,
flowers, humming birds, and very pleasant neighbours. That works out to
around £25 a night for a four week booking.
If you average these prices you find you can live for a year on roughly
£40 a night for two people with breakfast, swimming pool, and
general service. That comes to around £15,000 a year.
Now look at what I have already. Let us assume I am about to retire and
I want to buy a home in the sun. Let's keep it simple. I live in the
London area and have a three bed flat. I rent it out for £15,000
Admittedly, I have to pay for repairs, and general maintenance, and
also ground rent. Let's take off 10% of the income to cover that. My
life floating from hotel to hotel is going to be paid for by the rent,
I shall be £1,500 short. I still have to pay some travel costs,
and something to cover an evening meal, and maybe a midday snack, and
the usual things such as clothes, and pin money. I dont count any of
that because I'd have to buy that in any case if I bought a flat in
The trouble is, if I sold my UK flat and put the money into another
home I would have no cash coming in at all, and would have to buy my
food, pay for repairs, rates, and all the usual appurtenances of
living. My costs would be a darn site higher than if I lived in the
hotel, and I would have a lot more work to do, maintaining the house
and the garden, and doing the housework, and washing up, the cooking
and the shopping.
I guess it's all a matter of what turns you on. But in terms of the
money, hotel living beats owning a flat hands down. It is also a much
easier life as you get older and less inclined to sweat over the
chores. You also have a ready-made club house which is at the end of
I find some three star hotels are fine for the odd few weeks. Five star
hotels are okay if they are doing some kind of deal, but four stars
seems to be an ideal for me. It also pays to choose an area close to,
but not bang slap in the middle of, a tourist zone. I also find that
late bookings give you the best price. If you like getting away from it
all, you will probably manage to get some really good deals.
You see the world, get looked after, and save money. It's great. I do
it all the time.