The basic rule number 2 suggests retiring in touristic areas, but what exactly is that?

Cities are touristic areas and many large cities and capitals are popular destinations. However, those would not be very suitable for retirement. They have high housing prices and high costs of living throughout the year.

Seasonal popularity

The fact that makes touristic areas attractive for retirement is their seasonal popularity. An area by the sea might be popular during the summer months. An area in the mountains might be a highly visited ski resort in winter. However, during the off-season, these areas are much less crowded. This results in fewer jobs and a much lower cost of temporal housing. So by touristic, I mean scenic or another advantage of the surrounding nature, rather than man-made infrastructure.

Those seasonal touristic areas are what make for a good retirement place. The average costs of living are low, while especially housing costs peak during high season. This makes it profitable to build and own vacation homes, which are only occupied parts of the year. As a clever pensioner, I use my home during the off-season at a very low cost. During high season I have the option to rent it out for a premium.

Another important point is that the touristic area of interest should be sufficiently remote, so it is not too popular as a weekend resort. A great beach close to a large city attracts weekend tourists during a longer period of the year. People living in the city are buying summer houses which are at most a few hours away from their homes. This is particularly popular in Sweden. It drives housing prices and makes those areas less attractive for retirement.

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