First post, late bloomer, light on cash, heavy on attitude.

[Milton]

You are welcome, sir.

It is easy to form attachments to real property, which tend to give us a sense of permanence and stability. But the reality is that we are all on this earth for a relatively short time - make the most of it! - and nothing lasts forever.

Too, virtually all possessions are fungible. If you decide to sell, it is unlikely that you would be able to buy the same property back at some later date; but that doesn't mean that you couldn't find another one equally good, or even better. Most locations and houses have both pros and cons.

You know all of the facts, and we only know a few; so do whatever you feel is right for you. I did not mean to suggest that you would be crazy to keep the second property, merely that rigid thinking is undesirable.

 

[Recutter]

... That rigid thinking is undesirable.

right!

 

[jclarksnakes]

What I am the world champion of rigid thinking. LOL. BTW, my question really was only meant to get you thinking outside your current comfort zone. It may be that you do value that vacation house more than the extra years of retirement you might gain from selling it. It is all good.

 

[Ceecee]

So this is what I hear...
$10k from condo
$12k commercial
-$25k on vacation
$600k on current home (paid off in 12); maybe worth $900k then?
$42k annual pension
$400k in 401k in 12 years

Not bad in my book; you may think about selling your current home when you FIRE to boost your needed liquid funds. You'll be living in vacation home then anyhoo.

I have to agree on being too heavy in real estate for my personal comfort. Funny how some decide to take some risks (real estate) vs. others (stocks).

Its not funny. Real estate is tangible. Stocks are pieces of paper with numbers on them. Can't live in them, grow anything, rent them, etc.

 

[REWahoo]

Its not funny. Real estate is tangible. Stocks are pieces of paper with numbers on them. Can't live in them, grow anything, rent them, etc.

Tangible is not always good. Stocks don't call you late at night to say the water heater is leaking, the toilet is stopped up, or the basement is flooded. Oh, and you don't pay taxes on them unless you have gains, and don't have to refurb them when tenants trash them.

Both real estate and equities have their pros and cons.

 

[Texas Proud]

Its not funny. Real estate is tangible. Stocks are pieces of paper with numbers on them. Can't live in them, grow anything, rent them, etc.

Tell the people on the Jersey shore who lost their house in the Hurricane that RE is a great investment...

 

[Texas Proud]

To the OP,

I am late to this thread... but am intersted in your vacation home...

How often are you there How much total time do you spend


IOW, you spend $25K and have $1.2 million tied into this place... it might be in a location where it is appreciating better than the market, but if not then you have to add in your opportunity costs to get your total cost...

Say your oppportunity costs are another $25K (could be higher)... that means you are paying $50K for this house... if you stay 50 nights (not likely unless it is really close), then you are paying $1,000 per night to live there... I would think that you could rent for less.... and if you stay fewer nights the rate increases...

Also, I think it limits your choices in where you go on vacations.... IOW, you have so much invested in this place you almost have to go there... but if you did not have it, you now have most of the world as a destination... heck, at $1,000 per night you probably can hop a plane to Hawaii and stay in a nice 5 star and still have money left over... (or Europe, or ..... which includes where your current house is located)....

 

[Milton]

FWIW, Peter Mayle has a chapter on the pros and cons of second homes in his 1993 bookAcquired Tastes. He concluded that it was better (i.e., easier and cheaper) to treat himself to annual two-week vacations at a top-notch hotel than to own a mediocre flat in the same location. YMMV.

 

[Recutter]

Tell the people on the Jersey shore who lost their house in the Hurricane that RE is a great investment...

That is a sad one. Fortunately, my property is all about the land. The house structure has very little value.