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Old 08-04-2014, 11:08 PM   #21
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Another way to look at it....

If you were to withdraw $9000 in annual expenses for a vacation home, how much would you need to add to your portfolio? Assuming a withdrawal rate of 4%, you would need $225,000. Is the property worth that to you?
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Old 08-05-2014, 06:19 AM   #22
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Another way to look at it....

If you were to withdraw $9000 in annual expenses for a vacation home, how much would you need to add to your portfolio? Assuming a withdrawal rate of 4%, you would need $225,000. Is the property worth that to you?
Not that much.

My parents only purchased this home four years ago, so the gain would only be around $4,000.

The $9,000 includes lot rental, utilities, insurance, etc.

OK folks, I think you've talked some sense into me. It just doesn't look like I should keep it. Emotionally, that is hard, but realistically, I needed friends in this forum to talk some sense into me. Thanks.

I'll just have to wait a couple of years until ER and find a place with two palm trees out front.
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Old 08-05-2014, 08:21 AM   #23
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It's seven miles from the beach, which is fine with us. I'm on track to reaching financial goals, but our cash account/emergency fund would certainly be affected by owning. Spending $9,000 per year for a $40,000 property doesn't sound very sensible, does it?
Are you certain it will cost you just the $9,000. Don't know if you have factored in taxes (didn't mention), travel to and from, ongoing maintenance, etc.

So let's call it $11,000 (margin for error). In 10 years, you will have put $110,000 towards a $40,000 property. No chance of getting that money back unless you rent it out to cover it's costs.

Note: Posted this before I got to the last post!
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