How difficult is it to own 2 properties?

[Carpediem]

DW and I are starting to think about the possibility of purchasing a 2nd home in our desired 'reverse snowbird' location (MN). We moved to the Gulf Coast a few years ago leaving behind 3 adult children. Although nothing is official yet, we know there will be weddings and grandkids coming up in the next few years so we're thinking we will end up spending more time in MN (summers only hopefully).

Our thinking is that we'd like to buy a place in MN and spend 3-5 months there. However, when I think about the process of prepping our current single family home down south to leave it for several months, it seems almost overwhelming.....and possibly expensive. Of course the same goes for the future new place in MN when we get ready to return down south.

I was hoping to get some feedback from other members who are doing or have done something similar. Some questions/concerns that come to mind include:

- What was more expensive than you were expecting to own and maintain 2 properties? What are some of the gotchas you didn't expect? Is it worth it or is renting a place in MN for 3-5 months a better option?

- Do you have a guesstimate on the monthly cost of leaving a single family home for several months in the summer? (I keep thinking about lawn care.)

- Is it a major pain in the rear to prep your primary residence to leave it for several months?

- Did you rent out either of the properties when you were not using them? I know beach condos are easy to rent but what about single family homes on a short-term basis (i.e., VRBO, Airbnb, etc.)?

- Did you do anything specifically to prep for possible storms, tornadoes, hurricanes? IOW, did you put on hurricane shutters prior to leaving if you were in an area prone to hurricanes?

- Any tax gotchas or pros/cons of owning 2 properties like this?

I sure would appreciate any and all thoughts and opinions about this. Thank you.

 

[HI Bill]

Lots of potential cons, and costs, associated with owning two properties.

If I were doing this, I'd opt for a condo in a gated community, so that theft is not as much of a concern.

I'd install leak/flood sensors in the baths and by the water heater.
I'd install IP cameras and a security system.
I'd leave the refrigerator running.
I'd have someone available to address any emergencies.
I'd have lawn service if needed.

I just had my mom's house vacant for five months. I had to pay water, sewer, trash, electricity/gas, lawn upkeep, and insurance, as well as property taxes. All on an empty house. These, plus the small mortgage, added up to $1K/month.

Kind of like having a second car for one person...you can do it, but it's costly, in terms of maintenance, insurance, care, etc.

 

[pb4uski]

Our main home is in VT and condo in FL.

We keep our house heated for the winter. We have a neighbor that looks in on the place and waters DW's plants. We have internet thermostats and a 3-camera security system and I monitor the temps on my smartphone. We do keep the water off but the neighbor turns it on to water the plants and then turns it back off again... easy peasy... just don;t want water pressure on all the time in case a hose or pipe bursts.

Inverse for the condo in FL. We set the thermostat and humidistat, turn off the water at the main and close and lock the door.

We leave the refirdgerator running at both places but do the ice cubes in a baggie trick to see if the power was ever off long enought for the freezer to thaw.

 

[TwoByFour]

We had two homes for many years. Here are some observations:

You end up with 2 of everything, obviously, including 2 sets of cars unless you are going to drive back and forth. If you fly back and forth it is faster but then you cannot haul much personal stuff with you. Our 2nd home was 100 miles from the airport so it was difficult to get from the airport to the house. We would rent a car at the airport, drive to the house, and my wife would follow me back in a car to return the rental. Ugh.

We never rented out either house because they were both full of art, personal stuff, and nice furniture. I did not trust it to renters. Don't rent out your primary residence unless you are never going to sell it. It changes how the home-sale cap gains exclusion works.

When one house was empty I worried constantly about it. It was in a climate that would get cold in the winter so I worried about the pipes. We eventually became friends with a neighbor who kept an eye on it. I also worried about someone breaking into it although it never happened but I think we lucked out.

Over the years we made lots of improvements to the 2nd house and when we sold it, all of that paid off. It was like another investment for us, but one we could enjoy while sinking money into it.

After 14 years of this, we got sick of it and sold the 2nd house. It was worth it, I have no regrets but it was complicated and a bit of work. Now we just go back to the area but rent something. We store a car and some personal stuff with friends in the area. Ironically, it costs us more to rent for a month than it did to own our 2nd house (it was paid off). But as I said, we were tired of the worries and extra work involved.

 

[NW-Bound]

My 2 homes are 2.5-hour-drive apart, but they have an elevation difference of almost 6,000 ft. Works well for me, as I can easily commute between the two.

Seriously thought about buying a 2nd home in the Puget Sound, which I love. Changed my mind once I realized what a hassle it would be.

 

[RunningBum]

There are certainly costs, as you and others stated. Other than that, I think it's not difficult--unless something goes bad, especially if you don't have a plan for it. I always worried that somebody would break in the front door or a window, and not only would I be robbed, but the house would be exposed to weather and whatever animals found their way in. A neighbor, friend or service is essential, and even that may be too late.

Fortunately nothing like that ever happened to me. Worst thing was a frozen water pipe that burst, but luckily it was still frozen when I got there so no water damage. I had the water off, but it was actually in my radiant heat loop, which isn't intended to be drained.

I'd use every remote monitoring device I could, such as those door bell cameras, temperature and water sensors, etc.

I'm sure there have been threads on this before with more ideas if you search for them. "second home" is probably the search term to start with.

The other piece is the personal level. I had a family situation that was limited time (6.5 years), and I didn't really like going back and forth. Never really felt settled in to one place or the other, though I was doing about 3 months at a time, so double the moves. Plenty of people enjoy escaping a MN winter and FL summer though. I'd just rather live in an area where I didn't have to escape for such a season. But you've already chosen one area and have family concerns at the other so your situation is different.

 

[45th Birthday]

I will try to answer some of your questions, but our situation might not be directly comparable.

We bought our first second home almost 20 years ago, when I was still seven years pre-FIRE. It was a home we used in the summer for ten weeks. It was a simple house, with a small yard. We had a caretaker who visited weekly and after major storms. Also landscapers who took care of the lawn and small garden. No major issues or surprises, and this house is in a remote area that can get pounded by storms in the winter.

Fifteen years to the day after buying that property, we bought our third place, a condo in Florida. It has excellent staff who maintain the property just as we would (including light interior maintenance and repairs). They handle the A/C service, and schedule any needed appliance repairs, for example. They check the unit every two weeks and after major storms, water plants, exercise cars.

Our primary house was never unoccupied for long until the third property came along, but we always had landscaping, caretaking, snow removal, and pool service done by others.

After a few years of migrating between the three, we decided to get rid of our former primary house and original second house and upsize to another property in the same location as the original second house. It is a much more complicated place, with lots of landscaping, a pool, a guest house, and various complicated mechanical systems. As before, we have help with all the routine services, and find ourselves using a handyman more often.

I would suggest that if you get a second place, be the type of person who forgets the other when you are not there. Have someone who will contact you if there is a problem, and don't sweat it. Get used to having a list of small projects to take care of when you arrive back at the other place. Things you would normally deal with right away when living there will stack up and present themselves all at once when coming back to an unoccupied place.

Costs are highly location-specific. However, I wouldn't plan on deferring or stretching things like lawn service.

It was never a huge pain to close or open any of our places. The condo is the easiest, but none of the others were difficult. We keep a checklist that we add to as necessary. The process of opening a house is joyful as you look forward to fun times. Closing is more bittersweet, with the remembrance of the good times and the recognition that it's time to move on.

We never rented any of our properties. That adds a level of complexity that I can't comment on.

Storm prep-the condo is a fortress and management readies it after we leave. Our current house is also subject to hurricane damage, but we don't do anything special other that bringing everything inside when we leave. We actually had the most damage and issues (nothing major) in the original primary home in a northern suburb of Chicago.

Tax gotchas. Other than making sure you maintain residency in the most favorable tax state, there aren't really any systemic ones. Although, when we sold our original primary home we lost $500K+ because we over-improved and the market was soft. Not deductible. When selling the original second home, we had a gain of $700K+ that we had to pay taxes on. Ouch, but oh well.

Good luck on your journey.

 

[Floridatennisplayer]

Hum, can you and your wife just stay with your kids? Most apartments want a 12 month lease. Might be worth it? I know a guy who rented an apartment in Florida for 3 years. Just to stay for the winters. Felt it was cheaper than buying a place.

You definitely are a reverse snowbird. I would not rent out your home. You also need a professional HOMEWATCH person to check on your home every 14 days with documentation. Otherwise in Florida, your home is considered abandoned and if your air conditioning unit stops and you get mold, your insurance will not cover it. My neighbor found out the hard way.

Like PB said, we love our condo in Florida. Turn off the water, set the thermostat, and lock the door.

 

[brucethebroker]

You won't have much luck renting out the house in FL during the summer, unless you live on the beach. Not close to the beach-I mean beachfront. Should I mention the difficulty of renting out the MN house in the winter?

Lawns/gardens need to be tended in the summer. Pipes freeze in the winter. Electric, gas and other utility bills have to be paid whether the house is empty or not. Same with property taxes. You will need someone to "drop in" and check on the furnace or A/C every couple of weeks, and start the car-charge battery (if you have one in each location). Things will continue to break down (dishwasher, garbage disposal, dripping faucets) and need to be repaired on many visits.

Lots and lots of work and expense, but can be worth it. Especially if the local real estate market appreciates and you make a little $ when selling in 5-10 years. And you will most likely be ready to sell in 5 or so years....good luck.

 

[Carpediem]

Thank you all for taking time to provide your feedback. I really appreciate it. Y'all pretty much confirmed some of my thoughts and concerns and given me new info to think about. Right now, we're leaning toward just renting something via VRBO or Airbnb when we visit our kids in MN. Maybe we'll buy a place there in a few years after the first grandchild arrives. Thanks again.

 

[bingybear]

I don't have multiple houses. I do much of my own maintenance and really don't want to multiply it.
If I did, I would look at what your insurance covers and when insurances reduces coverage. We have found our insurance will quit covering some items (or reduce coverage) after vacancy of something like a month. Also check your insurance if you rent it out part time. This could also change your taxes on the house which could be a benefit... or not.

 

[Ronstar]

We have had a primary home in Illinois and a condo in Arizona since 2002. For me, the 2nd home needed to be a condo. Maintenance on 2 homes would be too much.

What was more expensive than you were expecting to own and maintain 2 properties? What are some of the gotchas you didn't expect? Is it worth it or is renting a place in MN for 3-5 months a better option?

No real gotchas, but there are double utilities, real estate taxes, etc that I expected. If I were you, I would keep your primary home and rent a Minnesota place until you're comfortable with the location, etc.

Do you have a guesstimate on the monthly cost of leaving a single family home for several months in the summer? (I keep thinking about lawn care.)

No I don't, because we leave our primary home in winter. You may be able to suspend house utilities, but you would need to hire lawn care, etc.

Is it a major pain in the rear to prep your primary residence to leave it for several months?

Nope. just arrange for mail delivery, turn off water, turn down heat.

Did you rent out either of the properties when you were not using them? I know beach condos are easy to rent but what about single family homes on a short-term basis (i.e., VRBO, Airbnb, etc.)?

No.

Did you do anything specifically to prep for possible storms, tornadoes, hurricanes? IOW, did you put on hurricane shutters prior to leaving if you were in an area prone to hurricanes?

No - hurricanes are no concern at either of our places, and tornadoes normally occur in Illinois when we are there.

Any tax gotchas or pros/cons of owning 2 properties like this?

No tax gotchas for us. I can't think of any tax pros/ cons of owning 2 properties.

 

[kcowan]

DW and I plus both my sons have 2 properties so you can tell where we are on the scale. Yes both properties bring added costs and even more important, added mindshare. But we believe that the benefits to the family outweigh the costs.

When others offer that costs are too high to warrant the investment, I understand fully. It is a very personal decision. BTW my Dad also had two properties so it runs in the family!

I believe that there are other approaches that might be more satisfying for others. Many friends prefer cruising multiple times a year and also others are successful renting second properties for their snowbird/summer vacation experiences.

 

[kgtest]

I would definitely rent first. You might find that your kids buy a home of their own in MN and are more than willing to let you stay when you visit because they are so proud of their home and their success. I know that's how I felt when I moved away from my mom and dad and they came to visit. I did get sick of them after about 2-3 weeks though.


In MN I leave for FL for a couple weeks every winter. I turn my therm down to 45degrees and have a neighbor snap a pic of the therm temp when they are willing.


I still worry though. I think having an IP camera system where you can look at the basement to ensure theirs no flooding occurring, and one aimed at the external access of the home...front/back doors, etc. to understand if security is still in place would help.



I've heard of people's toilets cracking in the cold, so I would flush all the water out of each toilet.



Nobody wants to come back to water damage.



We have excellent lake properties for rent in MN, I might look at VRBO for one of those and use it as a place for MN family to retreat to for fun reunions.


There is one exception to renting a VRBO. If you have the opportunity to buy a place your kids could use or purchase once your reverse snow-birding stops, you could avoid the equity hounds.


For instance my dad bought me a townhouse when I was just out of college, and I paid him rent until I could afford to buy it myself. When I sold (which was back to my dad...he gave me the equity by way of all that rent I had paid for 3 years when I sold it back to him and that was the DP for our next home). That was absolutely a huge financial edge over my peers.



That solves both problems of wanting to reverse snowbird, with lower stress, and you get to help out the kids financially along the way.

 

[Kelor]

Living in Minnesota and having an all season cabin that is rarely used in the winter, I can provide you with this recommendation.

If you aren't looking at a townhome or condo, I would seriously consider no-basement. Remember, Minnesota has more of a temperature extreme than almost anywhere in the world. Houses have to handle 100 degree heat and -40 degree cold. That's tough on a home, and really tough on a basement with average footings.

If you are looking in the lakes area, there is no problem with closing up in the winter without worry. 40 below zero keeps the riff raff out. Winterizing a cabin/home is pretty simple. Just know that if you aren't heating a home throughout the winter, you will have minor damage throughout the years that you wouldn't have if heated. Things age quicker in extreme cold temperatures.

As far as tax pro's. There are NO tax benefits to owning in Minnesota. In fact, if the state even smells a situation where you were here for 6 months and a day, they will go after you HARD. In addition to one of the highest state income tax rates in the county, they even tax social security payments here.

 

[Scuba]

Our experience is that having multiple properties adds a lot of complexity. However as others have said, everyone’s situation is unique.

We don’t have kids so none of the considerations involving children or grandchildren apply to us. For us the cons outweighed the pros for the following reasons:
- Have to duplicate everything, and even so often you’ll physically be in one place and realize something you want is in the other place. PITA!
- Even if one of the properties is a condo or even if you have staff taking care of a property, there is always a “to do” list at every property.
- We found that when we owned multiple properties, we cut down a lot on our other travel. We felt that since we were already paying for the vacation home, we should use it rather than go elsewhere.

We sold off all but our primary residence about 10 years ago, and have since rented many very nice properties in various locations. It is definitely a sense of relief to check out and know you don’t have to worry about anything after your stay.

Having said that, I do understand some of the benefits of ownership. It’s nice not having to pack much to visit a place you already own, and obviously your experience is much more predictable when you own the place you’re going to. Everything is to your taste.

I suppose if one has significantly more financial resources than needed, or one desires to pass the property down in the family, it can be a great decision. We’d rather spend $40K/year traveling but YMMV.