Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Renting or buying? What is best for a second home.
Old 01-27-2012, 08:45 AM   #1
Recycles dryer sheets
 
Join Date: Dec 2008
Posts: 129
Renting or buying? What is best for a second home.

I think the best chance to have a successful retirement is to plan ahead. I have a year off to try our the retiree lifestyle (a sabbatical) and in six years I will be in a position to leave work permanently. I want to spend the winter months in a warm climate.
Originally I thought I would buy a second home and take advantage of the cheaper market in Florida, but now I have changed my mind.
It's a woman's right to change her mind---(sometimes I abuse the privledge).
Sometimes it is cold in Florida---maybe I will visit Ecuador or Belize and see if they would be good places to spend the winter.
If we rented for a few months in a place close to the equator then returned to Canada and took our trailer to the US in the late winter/early spring for 6-8 weeks we would have the flexibilty to discover and travel the southern states. Part of me is worried I might get bored being in one place.
Buying or renting----who has made this decision and which did you choose?
__________________

__________________
Frugalityisthenewblack is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-27-2012, 08:57 AM   #2
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,423
Quote:
Originally Posted by Frugalityisthenewblack View Post
I think the best chance to have a successful retirement is to plan ahead. I have a year off to try our the retiree lifestyle (a sabbatical) and in six years I will be in a position to leave work permanently. I want to spend the winter months in a warm climate.
Originally I thought I would buy a second home and take advantage of the cheaper market in Florida, but now I have changed my mind.
It's a woman's right to change her mind---(sometimes I abuse the privledge).
Sometimes it is cold in Florida---maybe I will visit Ecuador or Belize and see if they would be good places to spend the winter.
If we rented for a few months in a place close to the equator then returned to Canada and took our trailer to the US in the late winter/early spring for 6-8 weeks we would have the flexibilty to discover and travel the southern states. Part of me is worried I might get bored being in one place.
Buying or renting----who has made this decision and which did you choose?
If you get bored living in just one location, buy a second home and that way you may get bored in two locations. Or, you may not get bored - because you spend so much time and energy tying to keep in good repair the home away from home that is not used 1/2 of the year. Owning a second home is beyond expensive and can break a retirement plan. Speaking from experience here. To me RV'ing sounds like a better option for the nomad - or just rent a place for month or two, a different location each time.
__________________

__________________
MichaelB is online now   Reply With Quote
Old 01-27-2012, 09:02 AM   #3
Thinks s/he gets paid by the post
Onward's Avatar
 
Join Date: Jul 2009
Posts: 1,664
I made the decision and it's definitely renting, for many, many reasons.

Other people choose buying. The right choice depends on your personality and specific situation.

I think you'll find this is a fairly controversial topic on this board, right up there with should you pay off your mortgage.
__________________
And if I claim to be a wise man, it surely means that I don't know.
Onward is offline   Reply With Quote
Old 01-27-2012, 10:34 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
I'm unlikely to ever buy a second home. For that matter, I won't own the one I'm in for another 25 years...

Renting gives you more flexibility, imho. Get bored? Move!
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 01-27-2012, 10:58 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 5,913
We owned a 2nd (vacation) home and although that experience turned out well I don't recommend it. There are some who are content to limit their activities to two locations but not us. We didn't use it as much as we anticipated.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Old 01-27-2012, 11:23 AM   #6
Thinks s/he gets paid by the post
Major Tom's Avatar
 
Join Date: Nov 2009
Location: SF East Bay
Posts: 3,128
I've owned and I've rented. Currently I'm renting. I may consider owning again if it looks like it might be a good short-medium term investment. Otherwise I'll continue renting with a view to full-time RV-ing at some point so I can move around.

Does owning an RV count as buying?

Ooops - just realized the OP was talking about a second home. My apologies, I was talking about my first (and only) home.
__________________
ER, for all intents and purposes. Part-time income <5% of annual expenditure.
Major Tom is offline   Reply With Quote
Old 01-27-2012, 11:33 AM   #7
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
You'd have to use it an awful LOT -- and commit to vacationing in the same location -- to justify buying it unless it's something you can easily rent out AND use a local management company and still have it cash flow positively. That's a high hurdle to meet.

The problem with "wintering in Florida" is that you would be occupying the property at the same time it's the most marketable as a rental. I don't know how much luck you'd have renting out a Florida residence in the summertime.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 01-27-2012, 06:32 PM   #8
Recycles dryer sheets
 
Join Date: Dec 2008
Posts: 129
A beachfront condo in Ecuador for 60,000$ ?? maybe I will buy afterall!

Why Ecuador is a great place to retire - moneyville.ca Blogs
__________________
Frugalityisthenewblack is offline   Reply With Quote
Old 02-05-2012, 09:28 AM   #9
Thinks s/he gets paid by the post
Milton's Avatar
 
Join Date: Apr 2007
Posts: 2,068
Canadians will find that owning in Florida (or elsewhere in the US) significantly complicates their tax situations. It would be prudent to seek advice from an accountant who has experience advising people in that situation.

Quote:
Originally Posted by Onward View Post
The right choice depends on your personality and specific situation. I think you'll find this is a fairly controversial topic on this board, right up there with should you pay off your mortgage.
While I don't like to make categorical statements, I will go out on a limb and say that regardless of one's personality and specific situation, from a strictly financial point of view owning a second property is almost never a good idea.

Of course, there is more to life than money. If you can afford it and believe it would give you pleasure, then there is certainly nothing wrong with choosing owning over renting. Good luck with your decision.
__________________
"To know what you prefer, instead of humbly saying Amen to what the world tells you you ought to prefer, is to have kept your soul alive". Robert Louis Stevenson, An Inland Voyage (1878)
Milton is online now   Reply With Quote
Old 02-05-2012, 10:29 AM   #10
gone traveling
 
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
I bought my DW. I rented my GF .

Come on folks, just a little humor to this thread.

BTW, we would never buy a second home. DW/me have no desire to go to the same place over and over when we have our free time.

That's why we're off to Hawaii in April, DW/son to Canada in June, and DW/me back to Scotland in September.

There's too much in the world to see. Why would you ever tie yourself down (other than a primary residence)?

Just my simple POV, based upon our lifestyle...
__________________
rescueme is offline   Reply With Quote
Old 02-05-2012, 12:40 PM   #11
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,840
Quote:
Originally Posted by ziggy29 View Post
You'd have to use it an awful LOT -- and commit to vacationing in the same location -- to justify buying it unless it's something you can easily rent out AND use a local management company and still have it cash flow positively. That's a high hurdle to meet.
+1 Personally I do not want a second home, for these reasons and because I would have twice the responsibility and hassle. Renting sounds like so much more fun and seems more carefree, to me.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 02-05-2012, 01:11 PM   #12
Recycles dryer sheets
beowulf's Avatar
 
Join Date: Oct 2007
Posts: 466
We are renting for the Winter in the Phoenix area for 4 months. We did this two years ago in a completely different part of the area and are trying a new place. Is it expensive? Yes, but a lot cheaper than buying and all the hassles that accompany home ownership. And forget about renting out a vacation home in the South West between May and October - far too many homes available for the number of people who want short term furnished rentals. Our 4 month stay is costing significantly less than the comparable mortage payment for 12 months for a similar home (3K sq ft, pool, spa). That's even with the extremely distressed prices here - assuming we bought at the low point, which has not happened yet.

And in May, we go back to our own home and have no worries about what we left behind in Phoenix. OTOH, if you have lots of money that you want to donate to the banks, it might be a good idea . And, if we ever decide we want to move here full time, we will sell our home and then, maybe, buy. Or just rent year round - the prices are about 50% less for an unfurnished house for a full year rental.
__________________
Mission accomplished - not necessarily ER, but certainly R.
beowulf is offline   Reply With Quote
Old 02-06-2012, 05:22 AM   #13
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 577
I own a second home, but it's for reasons that work well for me. I like to be able to get away impulsively when I want to. That is harder to arrange if I am renting. And I have two dogs that I want to take with me. I still also go on vacation to other places as much as I used to before. My second home did not take the place of faraway vacations.
__________________
kat is offline   Reply With Quote
Old 02-06-2012, 06:53 AM   #14
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,423
We own a second home. There are legitimate reasons, it doesn't really tie us down or prevent us from seeing the world any more than one home would, and it is definitely more than twice the responsibility (and expense).
__________________
MichaelB is online now   Reply With Quote
Old 02-06-2012, 07:12 AM   #15
Recycles dryer sheets
 
Join Date: Feb 2009
Location: Cville
Posts: 399
so Kat and MichaelB - wonder if you ended up with a condo or traditional home? I would think that a condo would bypass some of the maint issues but then you would have to pay every month for someone else to bother with them.

We have considered a 2nd home in a warmer area. We often head south when we can when it is colder in far north of Virginia :-} I would think that there are other ways to spend $$ or invest if you want to look at it as an investment. But, it would be nice to have a place little bigger than a hotel room or even a extended stay suite, and have my crap already there waiting on me.
__________________
RetireBy90 is offline   Reply With Quote
Old 02-06-2012, 07:56 AM   #16
Full time employment: Posting here.
 
Join Date: Apr 2005
Posts: 577
Quote:
Originally Posted by RetireBy90 View Post
so Kat and MichaelB - wonder if you ended up with a condo or traditional home? I would think that a condo would bypass some of the maint issues but then you would have to pay every month for someone else to bother with them.
.
I have a century old house in a city where I do some semi-retired part time work, self-employed. I also have a roughly 30 year old 650 sq. foot cabin in the country on three acres, about 80 miles from my city house. I can take a business expense for using space as a home office in both places. Also, this year I expect to rent the cabin out during two or three weeks of hunting season.
__________________
kat is offline   Reply With Quote
Old 02-06-2012, 08:02 AM   #17
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,507
Quote:
Originally Posted by MichaelB View Post
Or, you may not get bored - because you spend so much time and energy tying to keep in good repair the home away from home that is not used 1/2 of the year.
That's exactly the reason we decided not to buy a second home, having observed that those who did spent a good chunk of their vacation time maintaining the second home. That's not my idea of a vacation.

We were close to getting the first home paid off, were paying way too much in taxes, and the tax guy said the only things we could do were buy a second home, an RV, a boat with a galley and head, or start dumping money into tax-deferred accounts.

We didn't want any of the other stuff so we chose the last option.
__________________
I heard the call to do nothing. So I answered it.
Walt34 is online now   Reply With Quote
Old 02-06-2012, 08:39 AM   #18
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
I don't want to own a home in FL and I live here! The homeowners insurance situation is still a mess and I've seen the chaos and mess a hurricane (or three in one year) can cause.
__________________
Buckeye is offline   Reply With Quote
Old 02-06-2012, 09:06 AM   #19
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,423
Quote:
Originally Posted by RetireBy90 View Post
so Kat and MichaelB - wonder if you ended up with a condo or traditional home? I would think that a condo would bypass some of the maint issues but then you would have to pay every month for someone else to bother with them.

We have considered a 2nd home in a warmer area. We often head south when we can when it is colder in far north of Virginia :-} I would think that there are other ways to spend $$ or invest if you want to look at it as an investment. But, it would be nice to have a place little bigger than a hotel room or even a extended stay suite, and have my crap already there waiting on me.
In my view a home is not an investment and a second home even less so. For someone that needs a two location lifestyle, two condos is much easier than houses.
__________________
MichaelB is online now   Reply With Quote
Old 02-06-2012, 09:07 AM   #20
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,423
Quote:
Originally Posted by Walt34 View Post
That's exactly the reason we decided not to buy a second home, having observed that those who did spent a good chunk of their vacation time maintaining the second home. That's not my idea of a vacation.

We were close to getting the first home paid off, were paying way too much in taxes, and the tax guy said the only things we could do were buy a second home, an RV, a boat with a galley and head, or start dumping money into tax-deferred accounts.

We didn't want any of the other stuff so we chose the last option.
You're just trying to make me feel good, right?
__________________

__________________
MichaelB is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Final Stages of 2nd home purchase-Need Input sheehs1 FIRE and Money 46 03-03-2012 09:43 AM
buying a townhouse for purposes of renting JohnDoe FIRE and Money 26 10-27-2011 09:27 AM
Reno's that increase home value?? My Dream Other topics 22 10-20-2011 08:04 PM
Hi I'm an Acupuncturist (53 yo) Should i buy a rental vacation home? daibai Hi, I am... 10 07-10-2011 11:52 AM

 

 
All times are GMT -6. The time now is 03:54 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.