Purchase a vacation home ?

[bclover]

The concept of going to the same place for vacation over & over doesn't appeal. Feels like Ground Hog Day.

for most folks who do it, it's not the only place they go. We go to our timeshare annually. some times it's for a long weekend, some times I'll go by myself for weeks and I'm more like a resident. I love that feeling.

 

[Scuba]

for most folks who do it, it's not the only place they go. We go to our timeshare annually. some times it's for a long weekend, some times I'll go by myself for weeks and I'm more like a resident. I love that feeling.

You can get that feeling by renting. We rented a place in the USVI for three months and absolutely loved the lifestyle there. Considered buying but SOOOO glad we didn’t. Hurricanes Irma and Maria hit 2 months after we left. We went down for another month to do disaster recovery work and were very grateful that we just walked away from our rental when time was up with no worries.

Earlier this year we thought about buying again, but prices for undamaged or lightly damaged properties were really high. We realized we value flexibility more than we value being able to return to the same home every year. Our primary residence is in So CA so we have no need to snowbird. Maybe we’d feel differently if we lived in a harsh winter climate area.

 

[mexexpat]

In 2008 (retired since 2003) we vacationed for the first time in Central Mexico. Fell in love with Mexico and bought a vacation home there, with the intention of using it for two weeks out of every quarter. After a few visits, the Mexican "vacation" home became our primary home and our US home was used less than 8 weeks a year.

Did this for 5 years until a parental eldercare issue brought us back to the US and we sold both of those homes and relocated nearer to my FIL.

Since my FIL's death, we bought another home in Mexico and again use our US house for only 8 weeks a year.

We use our Mexican home as a base to explore the rest of the Country and manage to vacation elsewhere in Mexico every 2 months. Having a 2nd home does not mean the end of vacations to other places.

Keep an open mind and open heart.....you never know what will happen!

 

[2018]

2nd Home

Interesting thread with the variety of replies. I think everyone dreams of "owning a 2nd home" at one time or another.


Just recently FIRED and enjoying my freedom. We own long term and vacation rental property now and I have been in the rentals business for almost 15 years. No debt on them and they generate a good cash flow.



In looking at vacation properties I held off for years as we couldn't justify paying money each month just to "own" a vacation place. We finally bought a place at Hilton Head and after completing a major rehab have been renting it as a vacation place during summer months. We could only do this because it's a 4 bedroom and I'm not competing with the 1000+ smaller villas on the VRBO market.


If you think you can cash flow a small 2-3 bedroom villa you're just kidding yourself. Unless it's in a premium location you will be part of a very crowded market. And then, you will need to plan for all cost associated with ownership. Mortgage, HOA dues, insurance, utilities, maintenance, and capital improvements.



So, when you think it's such a great idea to own a 2nd home you really just need to ask yourself if a 2nd home will impact your retirement plans.

I would personally never own ANY property (aside from personal home) that cost me money each month. That money could have been invested and allowed me to retire even earlier than I did.


With that said, I think everyone has different dreams and financial status in life.



Good luck ....

 

[capjak]

Unlike most here(?) we went with a timeshare and we absolutely love it, when we purchased I thought we would regret it but it's been a great purchase (for us) and a good compromise.

+1 resale of course. No worries about having to do maintenance, always clean and 1000+ locations (e.g. Marriott/Starwood-Vistana/Hilton/Hyatt/Disney Vacation Club/Wyndham/Worldmark/Four Seasons/ et al. I own Marriott/Hilton/Westin/Disney.....

It does not suck.

 

[ugeauxgirl]

I swore we would never have a vacation home, but we bought a small cabin on the river just 20 minutes from our house. i LOVE it. Everybody else seems to as well- its easy to get there and back- we can take the kids to a birthday party on Saturday in town and not have to scrap the whole weekend because of a kid activity. We used it as extra lodging when everybody came for Thanksgiving- it was so nice not having a house FULL of people when I was cooking dinner. Guests love it too- siblings and parents have borrowed it already- even a nephew. I didn't look at it as an investment, though I did calculate how much it costs- we can easily afford it. I suspect it will cut down on travel expenses a bit.

I know this is a cliche' but its my happy place. I went to the "camp" to clean up a bit and change linens before the holiday guests arrived and I realized I was smiling. I hate to clean, but just being at the river makes me happy.

 

[thepalmersinking]

I went with a condo. 3 reasons. 1, we could afford it. 2, I don’t like sleeping in someone else’s dirt. 3, HOA was as economical as do it yourself. Time is money at our age, so futzing around fixing things takes away from my time.

 

[Bir48die]

Know that every open moment you are beholding to your property and cannot justify going to some other fun area unless you rent it out at key times to allow you to sleep at night

 

[Keim]

Ugeauxgirl, Glad to see your new cabin is working out for you! Get it decorated how you like yet? We love our place in the mountains!

 

[Floridatennisplayer]

Know that every open moment you are beholding to your property and cannot justify going to some other fun area unless you rent it out at key times to allow you to sleep at night

What a dumb statement.

 

[Crabby Mike]

Know that every open moment you are beholding to your property and cannot justify going to some other fun area unless you rent it out at key times to allow you to sleep at night

With all due respect, that certainly isn't our experience. I'd say instead that if you can afford it, and can be secure about its condition from a distance, you can sleep just fine. We certainly do.

 

[Octogirl]

OP here. Thanks for lots of perspectives on 2nd/vacation homes.
We ve been weighing pros and cons all week and have decided against it.

These were the issues that kept us from pulling the trigger.

1. The $$ for taxes, upkeep would cut into travel budget to see gr-kids in Texas and SoCal - We Love to spend time with them
2. Buying it would delay my retirement year,

3. Even if we were to rent it out, rental income would not cover our carrying costs.
4. We can't use house to snow bird - so maybe we should consider a warmer location IF we decide to buy a vaca home. (we live in a cold Northeast state)


Thanks !

 

[Ronstar]

^solid issues - especially no 4.

 

[RunningBum]

^ especially #2!

 

[Scuba]

Glad you thought it through and made the decision that was best for your situation.

 

[BoodaGazelle]

Since you asked. We have owned a 2nd home since I was about 45. It was 2 hours from our main residence, but was a beautiful place and we used it every single weekend from mid-May to November. Now that I am FIRE’d, we still use it 5 months a year as our “snowbird” 2nd home (we live in FL). It costs us about $7 or 8K per year, but given how much we use it, we could not vacation many places for less than that.

The bottom line is, if you can afford it, and really get the enjoyment/use of it, go for it. But I would be wary of thinking that you will make a lot of money. Remember the old real estate adage “location, location, location”. If you get a nice property in a nice place, you should not lose money.


P.S. I thought I would add that we have never rented out our 2nd place, as we have always considered it our home, just as much as the 1st! If you cannot afford to buy without renting, I would advise thinking very hard about what that would mean.



Also, it should go without saying that you need to be very sure you will be content just going to that one place most of the time. If you prefer variety, owning a 2nd home will just cost you money to maintain it while you go vacation someplace else.

 

[old woman]

My parents bought a 2 bedroom house in a town on salt water. It was a couple hours from home. Everyone loved it except my parents. They would go clean, was drapes, mow the lawn then company would come. The company would go crabbing or boating using my parents gear then parents would provide food and drink, company go home and parents clean and change bedding.
I found a way to do it for free. Boyfriend lived with me 27 years then moved to the country on a great river. I keep my walleye boat at his house and he has a jet sled for the river. He also has truck camper. I go spent time at his house about a week a month, we go camping on lakes with my boat or fish his river. I am a guest so don't pay anything or need to clean or do yard work.

 

[Dawg52]

Know that every open moment you are beholding to your property and cannot justify going to some other fun area unless you rent it out at key times to allow you to sleep at night

I've never rented mine out and occasionally go on other trips. I enjoy having a place I can go to on the spur of the moment w/o having to do much planning. A location I truly enjoy going to. And I doubt I would do any more traveling to other places if I didn't own a condo.

Your comment might be valid for some people but certainly not for all....

 

[pb4uski]

Know that every open moment you are beholding to your property and cannot justify going to some other fun area unless you rent it out at key times to allow you to sleep at night

What a dumb statement.

With all due respect, that certainly isn't our experience. I'd say instead that if you can afford it, and can be secure about its condition from a distance, you can sleep just fine. We certainly do.

I've never rented mine out and occasionally go on other trips. I enjoy having a place I can go to on the spur of the moment w/o having to do much planning. A location I truly enjoy going to. And I doubt I would do any more traveling to other places if I didn't own a condo.

Your comment might be valid for some people but certainly not for all....

Probably valid for very few here... we've never rented out either of our vacation homes... ever. We can afford them... easily... so we are not beholden to them and sleep soundly. If we want to go somewhere fun, we just go. I agree with Floridatennisplayer.

 

[timemoveson]

Probably valid for very few here... we've never rented out either of our vacation homes... ever. We can afford them... easily... so we are not beholden to them and sleep soundly. If we want to go somewhere fun, we just go. I agree with Floridatennisplayer.

I had 2 "2nd homes" at the same time, for some time. The far away home was used by us occasionally and rented. It was a very poor experience front to back. Financially neutral bit in no other way life enhancing. Figured that out and sold as soon as possible.

Other "2nd home" is a fantastic life-enhancing thing for me and family. More of a one-of-a-kind place. Use it heavily. No interest in a commodity asset that others could easily rent from others, or duplicate easily in the same area. That was part of the logic. It's a big reason we have no concerns about the money, work or impact given the value added for us. It is a "slow moving" investment that will pay off over time, but that isn't the reason we did it. It also represents less than 10% of our large capital base. That was really important in our projections, since that wasn't yet true the day we made the decision

Big fan of doing this if you can truly afford it and it fits your lifestyle intentions. Ball and chain if you get it wrong or you are unlucky and circumstances catch up to you. I've advised many on this topic and it is a very individual thing but there is definitely a way to get caught up in emotion and lose your logic base.

 

[sheehs1]

I've never rented mine out and occasionally go on other trips. I enjoy having a place I can go to on the spur of the moment w/o having to do much planning. A location I truly enjoy going to. And I doubt I would do any more traveling to other places if I didn't own a condo.

Your comment might be valid for some people but certainly not for all....

+1
I never rent my 2 bd/2 bath Bayfront condo and never intended or intend to do so. It is an extension of "my home" and quality of life. I can pick up and go with my dog whenever I want on a moment's notice. I can't do that with travel elsewhere.

Those of us who do it for these reasons do so for far different reasons than those looking at it as an investment or hoping to break even on carrying costs.

I used to rent an ocean front 7 bedroom cottage for "the family" each summer. The costs the last two years was $9,000 including all the extra taxes and such. For ONE Week! That doesn't include what we spent for food, entertainment, etc. My yearly carrying cost for this condo is less.

It was starting to be impossible to coordinate everyones schedules for that One week of Beach Week, Not everyone could stay all week, etc. It would kill me to spend that much money on it and some,due to their work schedules, their limited vacation time could only stay for 3 days.

This condo is definitely my "Happy Place". There is not a ton of stuff to do like there is when I am at my other home. (3,500 sf, 3/4 acres, lots of yard work and cleaning, etc.).

To each his own. I'm glad you made your decision OP.

 

[MarieIG]

OP here. Thanks for lots of perspectives on 2nd/vacation homes.
We ve been weighing pros and cons all week and have decided against it.

These were the issues that kept us from pulling the trigger.

1. The $$ for taxes, upkeep would cut into travel budget to see gr-kids in Texas and SoCal - We Love to spend time with them
2. Buying it would delay my retirement year,

3. Even if we were to rent it out, rental income would not cover our carrying costs.
4. We can't use house to snow bird - so maybe we should consider a warmer location IF we decide to buy a vaca home. (we live in a cold Northeast state) .


Sounds as if you've given it a lot a thought and made the best decision for you. BTW, I see #1 as a HUGE factor (although all reasons are good ones).

 

[MarieIG]

I found this thread very informative, and can see that this is a very personal decision which takes a lot of individual factors into consideration.

At this point in my life, a vacation house is not under consideration. I am still working six/ seven days a week, and the time I get for vacation, I would like to use to visit my baby granddaughter. (That means more to me than anything else.)

When we retire, DH wants to spend time driving around the country. So, after a bit of rest, a long overseas visit to my in laws, and one or more visits to baby granddaughter, we will be traveling around the country.) He has dreamed of this for a long time . . .

We anticipate moving to a lower cost of living area. Having to look for another full time home will take priority.

Our retirement budget is still up in the air (yes, I have been saving but our expenses will change) and I will have to get used to living without a paycheck.

Not sure I want the responsibility of a vacation home.

Now, after the dust settles, who knows, we could fall in love with a home down South and decide to snow bird. Never say never.

 

[Clone]

It costs us about $7 or 8K per year, but given how much we use it, we could not vacation many places for less than that.

We are considering a snowbird place in Arizona. Nothing fancy. We expect that the expenses will be in that $7k to $9k per year range. We are renting a place this winter for ~2k for one month (early season). IF we could rent a place every year, there would be no reason to buy. But there is turnover in the rental market, and there is no guarantee that you will get a place lined up each year.


If a person is going to spend 3-4 months there, then owning a place is not any more expensive than renting. By owning it, you know that it will be available. You can leave property there, and you can use it whenever you want to use it. The trade-off is that you have maintenance, and you are making a commitment to spend that money year after year.


I think that my first preference is to see if I can line up a Jan-Mar rental for 2020, and then we will continue to watch the real estate market as well as determine if we are ready to commit to the snowbird experience for the next 15 years. If we can not secure a rental, then we will become more serious about buying a place.

 

[HadEnuff]

I had 2 "2nd homes" at the same time, for some time. The far away home was used by us occasionally and rented. It was a very poor experience front to back. Financially neutral bit in no other way life enhancing. Figured that out and sold as soon as possible.

Other "2nd home" is a fantastic life-enhancing thing for me and family. More of a one-of-a-kind place. Use it heavily. No interest in a commodity asset that others could easily rent from others, or duplicate easily in the same area. That was part of the logic. It's a big reason we have no concerns about the money, work or impact given the value added for us. It is a "slow moving" investment that will pay off over time, but that isn't the reason we did it. It also represents less than 10% of our large capital base. That was really important in our projections, since that wasn't yet true the day we made the decision

Big fan of doing this if you can truly afford it and it fits your lifestyle intentions. Ball and chain if you get it wrong or you are unlucky and circumstances catch up to you. I've advised many on this topic and it is a very individual thing but there is definitely a way to get caught up in emotion and lose your logic base.

Bingo! Well stated.