Senator
Thinks s/he gets paid by the post
With that much work there, if you had rented out the places all your expenses including maintenance, tools, travel and meals, would have been a tax deduction.
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Vacation Home vs. Renting Hotel
- Thread starter Toddtheformeraccountant
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With that much work there, if you had rented out the places all your expenses including maintenance, tools, travel and meals, would have been a tax deduction.
Rent here
This is where we lived back in 1959 through 1961. Vineyard Haven Mass. We rented it for $90/mo.
You can rent it now, for a full week in August for only $8400.
https://www.google.com/maps/place/T...99!5m2!4m1!1i2!8m2!3d41.4580617!4d-70.6042278
And, a funny story... The picture shows the fireplace in the living room.. the deer on the mantle were there at the time. The blue tiles are Delft... almost priceless. One Christmas when jeanie's mom came to visit she thought they were ugly, and bought stick-on plastic red brick tiles. If William Randolph Hearst's niece (owner at the time), she would have had us in jail.
This is where we lived back in 1959 through 1961. Vineyard Haven Mass. We rented it for $90/mo.
You can rent it now, for a full week in August for only $8400.
https://www.google.com/maps/place/T...99!5m2!4m1!1i2!8m2!3d41.4580617!4d-70.6042278
And, a funny story... The picture shows the fireplace in the living room.. the deer on the mantle were there at the time. The blue tiles are Delft... almost priceless. One Christmas when jeanie's mom came to visit she thought they were ugly, and bought stick-on plastic red brick tiles. If William Randolph Hearst's niece (owner at the time), she would have had us in jail.
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I had 127 rentals at one time. Enough multiunits to support managers. You can only deduct the taxes off the Profit you make. In my experience, the one who makes the money on individual rentals is the management company.
I certainly wouldn’t want to deal with rentals in my retirement.
gooddog
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Stay in a VRBO house. Even if you go the same area quite often, you can stay in several different vacation rentals that way. It is nearly as cheap as a hotel in a lot of cases, and you have shelled out 100's of thousands of dollars for your own 'vacation home'.
I was a landlord for 16 plus years of a single family house in California. I managed my rental property and spent time screening the tenants and painting the interior rooms after they move out. I also rent houses and condos using Airbnb overseas and got to know property values. In fact I will be going to Hawaii to check out a vacation condo to buy next month. Here are my suggestions:
1. Be careful about buying a house now because economists are predicting a recession in 12 to 24 months. If you buy a house now, you have the potential of a decline in real estate value when the recession hits. IMO, the best time to buy a house is during a recession.
2. The best return of investment is being a slumlord. This is because the property cost to income ratio is low. I was also a real estate agent and I went to classes so I know that buying a low value house in a below average neighborhood will yield relatively higher income.... than an upper middle class neighborhood.
3. Check out the California property taxes. California property taxes are a money pit. I recently purchased a $600K house in cash but my property taxes are $650 a month or $7800. This is 1.3%. The extra 0.3% are maintenance "fees" associated with the 1% property tax. Depending of the county, maintenance fees imposed by the county can be high.
4. Try Airbnb. Airbnb is the greatest thing that happened to my retirement recently because owners can now rent their houses out to the public. I really enjoy renting a $10M plus house at a reasonable price. I no longer use a hotel room since Airbnb is much better IMO. Next month, I will be renting an Airbnb condo in Waikiki while looking for a condo to buy. However, if I do not find one, my back-up plan is to rent Airbnb frequenctly as part of my retirement.
1. Be careful about buying a house now because economists are predicting a recession in 12 to 24 months. If you buy a house now, you have the potential of a decline in real estate value when the recession hits. IMO, the best time to buy a house is during a recession.
2. The best return of investment is being a slumlord. This is because the property cost to income ratio is low. I was also a real estate agent and I went to classes so I know that buying a low value house in a below average neighborhood will yield relatively higher income.... than an upper middle class neighborhood.
3. Check out the California property taxes. California property taxes are a money pit. I recently purchased a $600K house in cash but my property taxes are $650 a month or $7800. This is 1.3%. The extra 0.3% are maintenance "fees" associated with the 1% property tax. Depending of the county, maintenance fees imposed by the county can be high.
4. Try Airbnb. Airbnb is the greatest thing that happened to my retirement recently because owners can now rent their houses out to the public. I really enjoy renting a $10M plus house at a reasonable price. I no longer use a hotel room since Airbnb is much better IMO. Next month, I will be renting an Airbnb condo in Waikiki while looking for a condo to buy. However, if I do not find one, my back-up plan is to rent Airbnb frequenctly as part of my retirement.
RobbieB
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Me thinks I'll be a hotel guy. Don't want to be out for more than week or 2 at most (dogs) and when out I like to hit the local eateries. A fav activity is googling up the next place to try. Not to mention you can always go residence or extended stay places with a kitchen.
Maidensong
Recycles dryer sheets
OP, you're trying to choose between buying a vacation home or renting a hotel room. There is another option.
The DH and I took our first world cruise in 2018. We thought it was a once in a lifetime proposition, but we were astonished to meet couples who booked a three month or more trip every year. One had done it 13 times.
They wanted to escape winter and yet not be saddled with upkeep, taxes, payments, and generally worrying about a 2nd property. They get to visit different parts of the world and make friends along the way.
I know it doesn't make sense as a financial investment, but in terms of personal enrichment, a world cruise is hard to beat.
We just booked our 2nd one for 2021.
The DH and I took our first world cruise in 2018. We thought it was a once in a lifetime proposition, but we were astonished to meet couples who booked a three month or more trip every year. One had done it 13 times.
They wanted to escape winter and yet not be saddled with upkeep, taxes, payments, and generally worrying about a 2nd property. They get to visit different parts of the world and make friends along the way.
I know it doesn't make sense as a financial investment, but in terms of personal enrichment, a world cruise is hard to beat.
We just booked our 2nd one for 2021.
ducky911
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I live in California and bought a mountain home at the same time as two rental properties that are in the bay area. This was in the down turn after 2009. The mountain property is worth a bit more than I paid for it while the rentals have more than doubled.
I feel that vacation properties money is still tight from the recession.
I have no intention of selling but the difference is shocking.
I feel that vacation properties money is still tight from the recession.
I have no intention of selling but the difference is shocking.
Affordable
If you have enough money to just stay in hotels I would do that.There are many hotel chains now that have small kitchens in the units and even 2 br’s and a small living room.Marriott Residence Inn,SpringHill Suites,etc.
Hotels give you the freedom to go anywhere,anytime.You May very likely tire of going to the same place all of the time.You never know what might happen with a vacation home in terms of repairs,natural disasters,vandalism,etc.
Your bean counting can also be way off.You are trying to predict real estate prices,stock market returns,inflation,weather/disasters.Good luck with all of those assumptions.There're a lot of beaches in the world at many different price points year round.
If you have enough money to just stay in hotels I would do that.There are many hotel chains now that have small kitchens in the units and even 2 br’s and a small living room.Marriott Residence Inn,SpringHill Suites,etc.
Hotels give you the freedom to go anywhere,anytime.You May very likely tire of going to the same place all of the time.You never know what might happen with a vacation home in terms of repairs,natural disasters,vandalism,etc.
Your bean counting can also be way off.You are trying to predict real estate prices,stock market returns,inflation,weather/disasters.Good luck with all of those assumptions.There're a lot of beaches in the world at many different price points year round.
brett
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We rented a condo mid trip for a month in Costa Rica during the last downturn. We started to casually look at vacation real estate. We were surprised by how much it had dropped from the pre recession prices.
Seems to me that the very best time to purchase vacation property is during a recession. It is one of the first things that people want to sell...and fast.
We did not buy. As it turned out our insurance agent at the time had owned a condo in Tamarindo, Costa Rica for the past ten years or so. She told us that her friend was about to buy into the same complex and for about the same price as she paid ten years prior. Her advice....rent. She was OK with it but did felt she had lost the opportunity cost of money over that period plus she had picked up a potential liability for condo assessments (never happened though). I guess like any other real estate purchase it comes down to where and when you purchase.
Seems to me that the very best time to purchase vacation property is during a recession. It is one of the first things that people want to sell...and fast.
We did not buy. As it turned out our insurance agent at the time had owned a condo in Tamarindo, Costa Rica for the past ten years or so. She told us that her friend was about to buy into the same complex and for about the same price as she paid ten years prior. Her advice....rent. She was OK with it but did felt she had lost the opportunity cost of money over that period plus she had picked up a potential liability for condo assessments (never happened though). I guess like any other real estate purchase it comes down to where and when you purchase.
I agree. You cut costs by 50% by cooking your own food. Some hotel chains can give you discounts. Finally, retirement should have include a dynamic environment to avoid Alzhimer's. I like Airbnb so I can stay at a $2M house for a few days that I cannot afford to buy otherwise.
If you are staying home or at the same vacation home, your brain cells are no longer challenged. However, every time you change your environment, meet new people, visit places you never been before, you become energized. I will try to visit as many USA states and foreign countries that I can before I kick the bucket.
DINKFIRE
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We own three rental properties, with two long-term rentals and the third one short-term. I'll say managing rentals takes a lot of time and energy, regardless which type. You can never price a rental property based on rental history, the market will change, so will the local laws. The determination of owning a second home is if you can afford it without rental income in a down economy (job loss), if not, better rent a hotel room instead.
Another consideration is the utilization of your primary home. If you are justifying the savings by numbers of days you need to use the vacation home, remember that you are not using your primary home for those days, which also cost money to carry. It is true that your primary home is vacant when you on vacation either way, but owning a vacation home would obligate you to be on "The vacation" much more than if you don't own one.
Don't forget the costs of buying and selling, that can easily eat up all the market appreciation you may expect to realize in 3-5 years.
Another consideration is the utilization of your primary home. If you are justifying the savings by numbers of days you need to use the vacation home, remember that you are not using your primary home for those days, which also cost money to carry. It is true that your primary home is vacant when you on vacation either way, but owning a vacation home would obligate you to be on "The vacation" much more than if you don't own one.
Don't forget the costs of buying and selling, that can easily eat up all the market appreciation you may expect to realize in 3-5 years.
BoodaGazelle
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vacation home
DW and I have had a 2nd home for 25 years.... you really have to like going there and use it a lot, or any cost-benefit analysis will probably show it is not a good investment. Of course it still could be, if you had the money and foresight to get the right property at a good price....
We knew many people around greater Boston who bought vacation homes in Maine. They were lovely, but making a 2-4 hour one-way drive gets old, and they ended up rarely using them.
In our case, people pay up to $3500 a week to rent the house across the street, so we feel like we have gotten our money’s worth.
DW and I have had a 2nd home for 25 years.... you really have to like going there and use it a lot, or any cost-benefit analysis will probably show it is not a good investment. Of course it still could be, if you had the money and foresight to get the right property at a good price....
We knew many people around greater Boston who bought vacation homes in Maine. They were lovely, but making a 2-4 hour one-way drive gets old, and they ended up rarely using them.
In our case, people pay up to $3500 a week to rent the house across the street, so we feel like we have gotten our money’s worth.
Chuckanut
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
The problem I have always had with buying a vacation home is that I am then stuck with taking my vacation in the same place. I have too much wanderlust to do that.
I've run the numbers on motorhomes, vacatioin homes, even the ill advised time-share apartments. None come out better for me, than simply paying the rent - for a hotel room, cabin, house, condo - and then being off the hook for everything else - taxes, repairs, assorted utility fees, homeowner's fee, insurance, etc. etc. etc.
Of course I wintered in Arizona and Summered in Maine, that is a different story. But then it would not be a vacation home, it would be one of my two homes.
I've run the numbers on motorhomes, vacatioin homes, even the ill advised time-share apartments. None come out better for me, than simply paying the rent - for a hotel room, cabin, house, condo - and then being off the hook for everything else - taxes, repairs, assorted utility fees, homeowner's fee, insurance, etc. etc. etc.
Of course I wintered in Arizona and Summered in Maine, that is a different story. But then it would not be a vacation home, it would be one of my two homes.
