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Old 05-23-2010, 03:57 PM   #221
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Article in today's Financial Post arguing against purchasing a second vacation home.....

Vacation property best left rented
Saw this article in the Financial Post as well. It hits on some of the exact reasons that DH and I have decided not to buy a second home. A friend of ours has a condo in Invermere and his carrying costs (not including the mortgage) are almost $1K a month between the monthly condo fees and utilities.
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Old 05-23-2010, 05:12 PM   #222
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As I do not want nor care to rent out what I consider my own place, I would agree that vacation homes are most likely not a good thing. Our 2nd boonies home is not really a "vacation home", as it is only 2.5 hrs of driving away. And yet, it doubles our housing expenses. But if we had to catch a flight to get to it to do some inspection every time there is a major snow, or rain, or windstorm, I would sell it pretty quick.

Is it worth it? I guess it is like travel. Some like it while some don't. It is not the end of life if you don't have it.

Can we talk RV now? How about having children?
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Old 05-24-2010, 05:44 AM   #223
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I think it was Benjamin Franklin that said building a fireplace is one thing, but its the monthly cost of buying the wood that will sink you.

For Florida real estate at this point, its not the capital outlay (or the mortgage with a low interest rate), but more the taxes, HOA, condo owners insurance, flood insurance, house minding, internet....and then there all the risks to consider to condo associations in Florida these days.

that being said, a 100% gain in real estate prices is virtually inevitable in Florida over the next decade as excess inventory is sopped up and prices return to the cost to build.
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Old 05-24-2010, 10:11 AM   #224
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While buying a second home in Muskoka or Whistler might not be economical, I have an associate who owns in Collingwood and in Florida. He rents the Collingwood home in the ski season while he lives in his mobile home in Florida. Then he rents the Fla mobile in the hot season to teachers. It seems to make a lot of sense and he enjoys that lifestyle.

BTW who is counting on 8% return on REITs over the next 10 years?!
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Old 05-24-2010, 10:58 AM   #225
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Can we talk RV now? How about having children?
Pay off the mortgage or buy an annuity?
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Old 05-24-2010, 08:02 PM   #226
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While buying a second home in Muskoka or Whistler might not be economical, I have an associate who owns in Collingwood and in Florida. He rents the Collingwood home in the ski season while he lives in his mobile home in Florida. Then he rents the Fla mobile in the hot season to teachers. It seems to make a lot of sense and he enjoys that lifestyle.

BTW who is counting on 8% return on REITs over the next 10 years?!
Florida teachers? Toronto Teachers? How does he locate teachers interested in renting in Florida in the summer?
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Old 05-24-2010, 08:42 PM   #227
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I think it was Benjamin Franklin that said building a fireplace is one thing, but its the monthly cost of buying the wood that will sink you.

For Florida real estate at this point, its not the capital outlay (or the mortgage with a low interest rate), but more the taxes, HOA, condo owners insurance, flood insurance, house minding, internet....and then there all the risks to consider to condo associations in Florida these days.

that being said, a 100% gain in real estate prices is virtually inevitable in Florida over the next decade as excess inventory is sopped up and prices return to the cost to build.
I agree with everything except that last sentence. I would be willing to bet FL real estate prices will increase, but nowhere near 100%. Maybe 100% over the cost of the cheapest short sale in the state, but not in the general market. That's, IMHO, wildly over-optimistic.
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Old 05-25-2010, 08:09 AM   #228
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I agree with everything except that last sentence. I would be willing to bet FL real estate prices will increase, but nowhere near 100%. Maybe 100% over the cost of the cheapest short sale in the state, but not in the general market. That's, IMHO, wildly over-optimistic.
well, maybe my view is coloured by being in SWF.

for example, trulia is showing average sales price per sq ft at $75, now, in Fort Myers. (lot and building)

so, lets say we are talking your slightly above average 2000 sq ft house, thats $150000.

now, thats with the lot cost "'in"

assuming building lots return to a nearer to normal price of lets say $50k in ten years, the current average valuation of housing stock above ground (lot out) is about $100k for 2000 sq ft, or $50 per sq ft.

so, current building cost is what, $125 for mid range quality? and thats during a construction recession.

once things get moving again, and factor in inflation + rising energy costs + code creep + environmental regs + city fees, that construction cost could easily drift up to $150, so that 2000 sq ft building will cost 300k to build, plus 50k for the lot, you are at 350k to build a house that is selling for $150 now.

not to mention that 75% of the small builders were wiped out and those that remain will be extracting what economists call oligopolist "rents", and all that in an environment that is likely to be very conservative regarding construction finance for the next generation..or two.
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Old 05-25-2010, 08:57 AM   #229
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This thread just will not die. I guess similar to RV'ing. This one is much more interesting to me. Bottom line is that owning vacation property (or most personal use property for that matter) cannot be justified financially. Our vacation (hard to tell which ones are vacation given our lifestyle) properties in Ontario and Alberta cost about 25% of our total non alimony expenses and represent maybe 10% of our net assets including pension. Have no expectation of "making money" on these places although the Ontario place has almost tripled in 13 years. No doubt they are expensive but we spend over half our time at these places and love them. If we didn't spend our money this way we would have to come up with something else equally or more "wasteful". Just finished a fantastic long weekend with family at the Ontario "cottage". Currently sitting on the lakeside patio finishing my 3rd morning coffee. Life is good.
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Old 05-25-2010, 09:07 AM   #230
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I think vacation homes are a very healthy form of consumption, if you have the money to buy cash, especially if you buy in a buyers market.

I heard over the weekend that Ontario cottage prices were softening and that Ontario money was moving to Florida. People are figuring out that Florida is a 12 season venue - Muskoka is only good for 3 months, maybe, and with traffic, flying from Toronto (or Buffalo) to Florida is getting very easy and cheap.

Second homes are great "social machines".
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Old 05-25-2010, 09:36 AM   #231
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Not sure about the health aspects. Drank and ate too much this weekend. Gained a few pounds. Time to get on the elliptical-45 minutes of big sweat.
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Old 05-25-2010, 09:39 AM   #232
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This thread just will not die. I guess similar to RV'ing. This one is much more interesting to me. Bottom line is that owning vacation property (or most personal use property for that matter) cannot be justified financially. Our vacation (hard to tell which ones are vacation given our lifestyle) properties in Ontario and Alberta cost about 25% of our total non alimony expenses and represent maybe 10% of our net assets including pension. Have no expectation of "making money" on these places although the Ontario place has almost tripled in 13 years. No doubt they are expensive but we spend over half our time at these places and love them. If we didn't spend our money this way we would have to come up with something else equally or more "wasteful". Just finished a fantastic long weekend with family at the Ontario "cottage". Currently sitting on the lakeside patio finishing my 3rd morning coffee. Life is good.
Agreed, second homes or vacation homes rarely make financial sense but can be great for one's mental health. Everything can't always revolve around the bottom line.
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Old 05-25-2010, 12:08 PM   #233
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Florida teachers? Toronto Teachers? How does he locate teachers interested in renting in Florida in the summer?
He tells me that the rental agent finds them coming to Fla to visit the beaches and Disneyworld when they can (summer recess). Also he gets some hits off VRBO.
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Old 05-25-2010, 12:12 PM   #234
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Agreed, second homes or vacation homes rarely make financial sense but can be great for one's mental health. Everything can't always revolve around the bottom line.
Thank you for saying something I often think. We don't make all our decisions based on finances, somewhere in there you have to satisfy your emotional needs and if having a holiday home helps and you are prepared to do what it takes to have it, what is the big deal?
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Old 05-25-2010, 12:36 PM   #235
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I think it comes down to your philosophy of money.

for some (present company excepted) if you have tipped over into "love of money" as an end in itself rather than using money as a tool to fulfil your "love of life"

you are a bona fide miser

from wiki (which I quote for your amusement)


"A miser, cheapskate, curmudgeon, niggard, penny pincher, piker, scrooge, skinflint or tightwad is a person who is reluctant to spend money, sometimes to the point of forgoing even basic comforts and some necessities. Old people were commonly thought to be miserly but this stereotype is less common since support programs such as Social Security have resulted in less poverty in old age.[1]
Freud attributed the development of miserly behaviour to toilet training in childhood. Some infants would attempt to retain the contents of their bowels and this would result in the development of an anal retentive personality that would attempt to retain their wealth and possessions in later life.[2]
In traditional Chinese Confucianism, those who were concerned with money – landlords and merchants – were thought to be a low order of society, inferior to the peasant farmers who tilled the soil. They were condemned in allegory as misers and officials would punish such behaviour in times of famine.[3]
There are numerous folk sayings about miserly people such as the Cockney, "E's so tight 'is arse squeaks" and the Yorkshire, "He's a snipe-snout; he'll part wi' nowght."[4]

that being said, thank the dear lord for every miser in my family that came before me!
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Old 05-25-2010, 12:38 PM   #236
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He tells me that the rental agent finds them coming to Fla to visit the beaches and Disneyworld when they can (summer recess). Also he gets some hits off VRBO.
yeah, Disney is key for renting. thanks
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Old 05-27-2010, 09:59 AM   #237
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...
"A miser, cheapskate, curmudgeon, niggard, penny pincher, piker, scrooge, skinflint or tightwad is a person who is reluctant to spend money, sometimes to the point of forgoing even basic comforts and some necessities. Old people were commonly thought to be miserly but this stereotype is less common since support programs such as Social Security have resulted in less poverty in old age.[1]
My brother was a miser. When he had some health difficulties, I found him a nice seniors home. It was on a subway line and had a well-equipped workshop and a billiard room. He ran the numbers and decided to stay in his house. For 5 years, he struggled up and down stairs. But money meant more to him than comfort. (I was NOT my brother's keeper!)

He died last summer at age 70. But he lived his life the way he wanted.
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Old 05-27-2010, 11:06 AM   #238
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But he lived his life the way he wanted.
Isn't that what we are all trying to do?
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Old 05-27-2010, 01:28 PM   #239
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I guess I was trying to get above the free will thing and question if what you want is the best use of the time you have left...in the spirit of stirring up trouble

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Old 05-27-2010, 01:52 PM   #240
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Agreed, second homes or vacation homes rarely make financial sense but can be great for one's mental health. Everything can't always revolve around the bottom line.
We're heading up to our cabin - at 7000' elevation in the AZ mountains-for the long weekend- probably will spend part of it whacking weeds and painting- we haven't been there for quite a while. It's good for a change of venue, especially when you are surrounded by your own stuff- DW and I spend a lot of nights traveling on business, the last thing we want for a weekend getaway is another hotel room- or a time share, fractional ownership, or weekend rental.

If everything was always about the bottom line, we would just sit at home in the dark; clip coupons/rinse out sandwich bags/recycle dryer sheets instead.
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