How many of you have 2 houses?

[jacob]

I figured I could have either more bedrooms and bathrooms or more retirement years but not both. I didn't pick the rooms.

[jimnjana]

We have 3, a primary (FL), a vacation rental (SC) and one in GA that we are currently renting.

[xyz]

We have a house in the Northeast, considered buying a second in an warmer climate, DW could not make up her mind so we bought a 43' motorhome. On retirement we are planning on purchasing a lot with a casita in a resort for the motorhome (in the south) and downsizing the home in the northeast. Objective will be to have minimal maintenance and operating costs. But to answer the original poster's question yes, this is all part of our retirement plan.

[tryan]

We built a second home on a small lake in ski country 5 years ago. It rents short term (2 night minimum) via VRBO and Homeaway. In roughly 4 months (July and August then Jan and Feb) I can pull in the annual expenses for the property. Then we have the house rest of the year.

Whats interesting is that the second home is most stable asset we own. The value of waterfront homes has dropped some but not nearly as much as other rentals I have. And the volitility of the price is nothing compared to the mutual funds I've carried over the same 5 years.

[nothingevertodo]

Tryan- Do you mind sharing a bit more about your VRBO success? Where is the rental located? Cost/Size of house? Carrying a note?

Most of the VRBO owners I've heard of say that they are losing money every month!

[jimnjana]

Quote:

Originally Posted by nothingevertodo Tryan- Do you mind sharing a bit more about your VRBO success? Where is the rental located? Cost/Size of house? Carrying a note? Most of the VRBO owners I've heard of say that they are losing money every month!

We have had very good luck with both VRBO and Vacationrentals, Homeaway has been useless. We've had so much success with the SC property that rather than sell our Atlanta Home as we planned, we will likely market it as a vacation rental and try to capture some of the executive rental business as well (we will need make some improvements). We currently have it listed on VRBO and have received over 50 inquiries, and several thousand hits on the listing page, in about 4 months.

[nothingevertodo]

Quote:

Originally Posted by jimnjana We have had very good luck with both VRBO and Vacationrentals, Homeaway has been useless. We've had so much success with the SC property that rather than sell our Atlanta Home as we planned, we will likely market it as a vacation rental and try to capture some of the executive rental business as well (we will need make some improvements). We currently have it listed on VRBO and have received over 50 inquiries, and several thousand hits on the listing page, in about 4 months.

Thanks for sharing! When you say good luck, would you say that it is providing a better return than had you rented it at a prevailing market rate year round?

[BTravlin]

Quote:

Originally Posted by jimnjana We have had very good luck with both VRBO and Vacationrentals, Homeaway has been useless. We've had so much success with the SC property that rather than sell our Atlanta Home as we planned, we will likely market it as a vacation rental and try to capture some of the executive rental business as well (we will need make some improvements). We currently have it listed on VRBO and have received over 50 inquiries, and several thousand hits on the listing page, in about 4 months.

I have a vacation rental in Mexico that was listed on both VRBO & HomeAway but I recently let the HomeAway listing expire. I got more inquiries via Homeaway but virtually no bookings. Don't get as many inquiries with VRBO but have a much higher ratio of bookings to inquiries. I'll have to check the Vacationrentals site out. How does it compare on bookings per inquiries vs VRBO?

[brewer12345]

We own a single house. I had a hankering for a getaway place for a long time and we scratched that itch in 2008 by buying a small travel trailer for peanuts. Now we are looking at relocating to an ESR destination in 3 years and I am starting to wonder if I want to buy a place there ahead of our target move date. Obviously it would cost more to maintain two homes (suppose we could rent the one in the future location, but it is 1800 miles away), but at some point the RE market will have bottomed and I can still get a 3.5% pen fed mortgage with no closing costs.

Thoughts? My initial reaction is that this would be too much hassle, but I would welcome any thoughts on the subject.

[W2R]

Quote:

Originally Posted by brewer12345 We own a single house. I had a hankering for a getaway place for a long time and we scratched that itch in 2008 by buying a small travel trailer for peanuts. Now we are looking at relocating to an ESR destination in 3 years and I am starting to wonder if I want to buy a place there ahead of our target move date. Obviously it would cost more to maintain two homes (suppose we could rent the one in the future location, but it is 1800 miles away), but at some point the RE market will have bottomed and I can still get a 3.5% pen fed mortgage with no closing costs. Thoughts? My initial reaction is that this would be too much hassle, but I would welcome any thoughts on the subject.

I tend to agree with you. Some of the reasons why I wouldn't choose to do this, follow.

We don't know if this is the bottom of the real estate crash, and you might regret it if prices drop further.

The stock market seems to be doing well lately, and you might miss out on part of the recovery if your money is tied up in real estate.

Also, we don't know what will happen in the next three years. Will you be able to sell your present home then, or will the real estate crash have evolved further into a near complete stoppage of transactions? Will you still want to move to the ESR destination? Will renters half destroy your new home, or will someone break in and turn it into a crack house? Will you end up in some kind of unexpected financial disaster that requires working longer than you expect? Although many people do buy their ER home in advance, I am reluctant to do so because there are just too many unknowns.

On the other hand, there are plenty of arguments on the other side. Buying low is a good thing, and real estate sure is low. It would be a step towards your ESR plans. It would give you a nice place to vacation. Decisions, decisions. To tell you the truth, I am uncertain about this as well, though so far I have not bought another home.

[Lagniappe]

Quote:

Originally Posted by brewer12345 Now we are looking at relocating to an ESR destination in 3 years and I am starting to wonder if I want to buy a place there ahead of our target move date. Obviously it would cost more to maintain two homes (suppose we could rent the one in the future location, but it is 1800 miles away), but at some point the RE market will have bottomed and I can still get a 3.5% pen fed mortgage with no closing costs. Thoughts? My initial reaction is that this would be too much hassle, but I would welcome any thoughts on the subject.

I did this a few months ago - bought my ESR home in the location I want to live. The set up costs were high, but the carrying cost (with a sub-4% fixed rate mortgage) are not that high. I am spending more time than I expected in the new place, because I like it so much. For me it was probably not the best financial decision (will what I save due to buying at a depressed price and catching a low interest rate be offset by the additional monthly cost of a second mortgage, property taxes, condo fee, travel back and forth, etc?), but putting a major stake in the ground toward my ESR plan will keep me motivated for the next couple of years.

[FIREd]

Stateside, DW and I have decided to buy a RV instead of a second home. We are going to our first RV show in a couple of weeks to check out the latest offerings in person.

We have long entertained the idea of buying a vacation home in France. Fortunately for us, my family has enough real estate there that we can borrow for free. So we'll save our money.

[MichaelB]

Quote:

Originally Posted by brewer12345 We own a single house. I had a hankering for a getaway place for a long time and we scratched that itch in 2008 by buying a small travel trailer for peanuts. Now we are looking at relocating to an ESR destination in 3 years and I am starting to wonder if I want to buy a place there ahead of our target move date. Obviously it would cost more to maintain two homes (suppose we could rent the one in the future location, but it is 1800 miles away), but at some point the RE market will have bottomed and I can still get a 3.5% pen fed mortgage with no closing costs. Thoughts? My initial reaction is that this would be too much hassle, but I would welcome any thoughts on the subject.

The cost of owning a second home can be calculated. What most people underestimate is the burden of owning. When you add another house you take on a new set of problems - insurance, maintenance, upkeep. Not something easy to manage for someone already juggling a half-dozen axes and chainsaws...

Future mortgage rates may increase, but housing prices are highly correlated to employment rates, and they don't look to change substantially - at least thru the 1st half of this decade. I suspect we're close to a bottom in nominal housing prices, but they can stay low for a long time.

[tryan]

Quote:

Tryan- Do you mind sharing a bit more about your VRBO success? Where is the rental located? Cost/Size of house? Carrying a note? Most of the VRBO owners I've heard of say that they are losing money every month!

We started with CyberRentals since they had the VT market locked up. They were acquired by Homeaway. Most of our bookings are now Homeaway ... but VRBO is a close second.

The house is ~2000 sq/ft ; no mortgage on it but did use 2 HELOC lines during construction. The vacation rentals carry the HELOCs, taxes, insurance, association dues, heat, electric, cable, internet, trash pick-up, plowing/lawn service, firewood, maids services (between tenants), and 9% VT Hotel tax.

Took about 4 years to get to the point where it breaks even (plus or minus a grand). First couple years were hard ... no repeat customer base. Now it drives itself.

Just need to know you're renting PEAK times (holidays and summer for us). We do block the kids vacation weeks and one summer week for ourselves (winter break and Christmas). For us ~80% of the rents are in 4 months. Rest of the year is hit-or-miss.

[jimnjana]

Quote:

Originally Posted by nothingevertodo Thanks for sharing! When you say good luck, would you say that it is providing a better return than had you rented it at a prevailing market rate year round?

yes, about 50% more, net after tax return.

[NW-Bound]

Quote:

Originally Posted by FD Stateside, DW and I have decided to buy a RV instead of a second home. We are going to our first RV show in a couple of weeks to check out the latest offerings in person.

All right! For a travel lover, a motor home as a 2nd home makes a lot of sense. I wish I considered this option prior to buying my 2nd home.

Quote:

We have long entertained the idea of buying a vacation home in France. Fortunately for us, my family has enough real estate there that we can borrow for free. So we'll save our money.

Well, as a class B is what you want, it can be shipped over to Europe when you are done with touring the US. Man, I still hope I will do that someday.

[kumquat]

Quote:

Originally Posted by brewer12345 We own a single house. I had a hankering for a getaway place for a long time and we scratched that itch in 2008 by buying a small travel trailer for peanuts. Now we are looking at relocating to an ESR destination in 3 years and I am starting to wonder if I want to buy a place there ahead of our target move date. Obviously it would cost more to maintain two homes (suppose we could rent the one in the future location, but it is 1800 miles away), but at some point the RE market will have bottomed and I can still get a 3.5% pen fed mortgage with no closing costs. Thoughts? My initial reaction is that this would be too much hassle, but I would welcome any thoughts on the subject.

We bought our condo (in a city 400 miles away) because our kids were going to school there and buying was cheaper than renting. Maintenance would have been a killer if rented. DS could fix the odd thing and the kids were willing to put up with other inconveniences until I visited. After DS moved out, DD learned to replace tap washers via a telephone, a digital camera and in Internet connection. Tenants would want a plumber. At that time, a plumber charged $190 to come to the door and $100/hr thereafter.

When DD moved out, we rented it to a friend's son for a few months (more as a favour than a business decision although they were great tenants) and put it on the market as soon as they moved out.

As WTR has suggested, owning two could hurt. Perhaps ESR won't happen or will happen in another location. How about a double dip and the badness that entails? Assuming costs stay flat, what have you gained?

Quote:

Originally Posted by Lagniappe I did this a few months ago........... For me it was probably not the best financial decision

Time will tell.

[lauliza]

Has anyone done this, purchased two homes in the same town, one on the water one bigger and more residential, separately? My husband suggested selling our house (that we own jointly) and doing this but I can't imagine what the benefit would be. It makes me more suspicious than anything.

[Rambler]

Quote:

Originally Posted by lauliza Has anyone done this, purchased two homes in the same town, one on the water one bigger and more residential, separately? My husband suggested selling our house (that we own jointly) and doing this but I can't imagine what the benefit would be. It makes me more suspicious than anything.

With what I have seen "on the water" in the past 3 weeks turn into "under the water" I doubt I will ever be tempted again to own a home on the water.

Rambler, from Tokyo

[NW-Bound]

Quote:

Originally Posted by lauliza Has anyone done this, purchased two homes in the same town, one on the water one bigger and more residential, separately? My husband suggested selling our house (that we own jointly) and doing this but I can't imagine what the benefit would be. It makes me more suspicious than anything.

Why in the same town? Wouldn't a house and a boat work if you want to enjoy the water?