2nd home versus money in the bank

That's my issue too. We're looking at winters in a warmer place than Michigan so it it nearly 2000 miles making popping in on the second home on a weekend for maintenance impossible as well as undesirable. We're trying rentals this year. I hadn't considered buying many weeks of time shares as RetiredHappy has done. Many tradeoffs to balance.

We are also in Michigan and a couple years ago sold our “up north” lake place and bought an ocean front condo in Saint Augustine. We rent it may through September, which pays all expenses (taxes, hoa, etc) plus a little extra as summer is prime rental time in northern florida. We come and go when we feel winter is too much. It’s not as warm in January as southern Florida, but compared to here, it’s great to be out in just a sweat shirt. It also gives the kids a free place for spring break!
 
We snowbird it, saving a bit on utilities by being in temperate weather year round. Maintenance is no big deal - we throw money at it these days. At this point we are pretty well stocked with our needed stuff from socks to saws and barbeques to booze.

Did have a toilet supply line break down south in the desert, resulting in about 30,000 gallons of water filling our house. Latest bid is making it look like the restoration will cost just about what we paid for the place 10 years ago. Looking on the sunny side - new paint and a chance to get the kind of Saltillo tiles we would prefer. Oh - and our insurance company is taking it on the chin instead of us! (USAA been great so far and I'm sorry they are taking this hit - but glad it mostly isn't us)

We are considering a third place about 30 minutes from the place down south but in the hills and about 20 degrees cooler. A number of full-timer friends down south could take advantage of it in the summer and maybe inherit after some time. They do good stuff for us and a little repayment would feel good. Something to be said for longer term stays and building and maintaining relationships with neighbors.
 
I have owned a second home since 1990. It is on 20 acres about an hour and a half north of San Francisco where I live nearby in the Berkeley hills. Originally, it was a weekend escape from a hi-tech job in the entertainment industry. It was fully stocked so I could leave work on a minutes notice and not have to do anything except find some steaks to barbeque when I got there, or go the the local hotel/restaurant. After retirement it became a hideout where I could write my book (traditionally published in 2018) or just relax. I still vacation where ever I want. Warm winters mean no huge problems when I'm not there. Also has a little rental that pays expenses of upkeep. I urge you to do this. Done right, it was better your life. During Covid it was a life saver.
 
We have a mountain cabin 1.5 hours from home. One room, loft and a shower/toilet. Woodstove, electric, and a kitchen. No tv. Simple. Sots on half acre woth a seadonal stream and spring. Best purchase we have made.

As an aside: anyone notice all cabin pros and cons threads are EXACTLY the same?
 
We have a mountain cabin 1.5 hours from home. One room, loft and a shower/toilet. Woodstove, electric, and a kitchen. No tv. Simple. Sots on half acre woth a seadonal stream and spring. Best purchase we have made.

As an aside: anyone notice all cabin pros and cons threads are EXACTLY the same?

Yes and the heated debate ' about which way is the right way are as bad as talking about politics..;)
 
I bought a lake vacation house about 90 miles away. I have thoroughly enjoyed it & not having to bring things on a stay, it’s all there waiting for me. I wanted a pretty view as well as an urban townhouse. Now I have both. It wasn’t a financial decision, but a lifestyle decision for me. 65307702978__D108C0DC-DF6D-4C97-890D-4FE9C73580F1.fullsizerender.jpg
 

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As an aside: anyone notice all cabin pros and cons threads are EXACTLY the same?

I am thinking of claiming my SS early and investing the difference in a dividend-oriented portfolio, then using the proceeds to pay for upkeep on my cabin. Is this a good idea? :) :D :angel:
 
"2nd home versus money in the bank" was the OP's question. We took $225K out of the bank and paid cash for a nice house in Florida 5 years ago. Became snowbirds and kept our house in Indiana. Was offered $350K (un-solicited) for Florida in April. We did not buy Florida for an investment, but the bank was not about to pay me $100K+ interest in 5 years. So looks like a good financial, as well as lifestyle decision. Yes, carrying-costs for 2 properties matter. But we love both homes, neighbors, lifestyles, and weather!
 
Lots of interesting ground covered here, one thing I might add to consider if I were searching for a second home..

Look at your neighborhood and consider how the character of it may change if several of the other homes became shorter term rentals (like AirBnB). I've seen this really affect the experience. Of course, some places may have rules against short term rentals, and others are far enough apart so there won't be as much effect.

Scusan, good point. In our NJ shore 2nd home condo and townhouse community, there is a minimum 3 month rental rule for all units, specifically to avoid that scenario. Neighbors/ friends of ours who moved into a condo in our building for the summer paid $33,000 for the rental from Memorial Day to Labor Day. It doesn't guarantee that renters will be good and courteous neighbors, but it does limit the turnover of possible troublemakers.

You're right that you need to review and understand all of these rules before you purchase a 2nd home.
 
I am thinking of claiming my SS early and investing the difference in a dividend-oriented portfolio, then using the proceeds to pay for upkeep on my cabin. Is this a good idea? :) :D :angel:

That seems OK, but are going with a index fund or individual stocks...maybe TSLA? :D:D:D
 
After renting a 400 sf Airbnb for 4 months every Winter for six years, we decided to purchase a condo. The rental was too small for a six month stay and the price kept creeping up.

We did not sell stocks but decided to obtain an asset based mortgage. Rates are low and currently we earn more staying invested.

Yes the annual cost will be more, but it will have our own stuff, we can stay longer, and have room for company.

It’s very hard to find and keep a good rental year after year.
 
After renting a 400 sf Airbnb for 4 months every Winter for six years, we decided to purchase a condo. The rental was too small for a six month stay and the price kept creeping up.

We did not sell stocks but decided to obtain an asset based mortgage. Rates are low and currently we earn more staying invested.

Yes the annual cost will be more, but it will have our own stuff, we can stay longer, and have room for company.

It’s very hard to find and keep a good rental year after year.

So Close...400 Square feet!?! Talk about SO CLOSE. I'm getting claustrophobic just thinking about a place that small! Good move to buy a condo in a place you obviously love to spend the winter at. I'm not sure what an "asset based mortgage" is (excuse my ignorance) but if it got you a good mortgage rate without a large cash outlay, that's great!
Having your "own stuff" in your place is an awesome feeling (although we never enter our 2nd home without a duffle bag of clothes that might wife "want to wear" during that visit...even though she has tons of clothes there).
 
So Close...400 Square feet!?! Talk about SO CLOSE. I'm getting claustrophobic just thinking about a place that small! Good move to buy a condo in a place you obviously love to spend the winter at. I'm not sure what an "asset based mortgage" is (excuse my ignorance) but if it got you a good mortgage rate without a large cash outlay, that's great!

Having your "own stuff" in your place is an awesome feeling (although we never enter our 2nd home without a duffle bag of clothes that might wife "want to wear" during that visit...even though she has tons of clothes there).



Asset Based = they look at your investment balances or other assets own free and clear, rather than annual income to qualify you for the mortgage. Offered by mortgage brokers not traditional brick & mortar banks.

In our case being under 59 1/2 we didn’t want to pay a 10% early withdrawal penalty. We have enough IRA funds to buy the condo many times over.
 
I am thinking of claiming my SS early and investing the difference in a dividend-oriented portfolio, then using the proceeds to pay for upkeep on my cabin. Is this a good idea? :) :D :angel:

Excellent Out-to-Lunch! Cracked me up...... :LOL:
 
Positives and negatives for Florida condo second home

Pros
1) we are very particular to decorating taste of accommodation so DW is rarely comfortable for long in a rental in our price range
2) fun to furnish and fit out
3) I prefer maintenance and paperwork to sports and leisure
4) a decent off season rental market makes a big difference financially
5) too nervous to park money in stocks and terrified of fixed income just at the moment
6) finally a big capital gain after treading water for a decade
7) opportunity to forge permanent seasonal friendships that are hard to form in non leisure communities
8) room for visitors
9) other friends and family followed us to same neighborhood
10) it’s an extension of home
11) protection from rent increases
12) keep a car instead of renting
13) rents can fund travel
14) I just prefer to own things I can use with surplus equity rather than look at a bank or stock statement

Cons
1) condo management and builder handover worries, risks that can be dodged or mitigated
2) tenant emergencies (that I actually enjoy solving)
3) various tax collection, filing and reporting duties if renting, but I enjoy the exercise
4) insurance is a growing challenge in Florida
 
@texcurtis, that 90 mile lake house is in the ballpark perfect range. Far enough to appreciate the difference but not too far. We have a beach property that is over 100 and with the pandemic we don't even try to go there. It is about the only thing people can do around here and it is overrun.
 
Thank you to all for this conversation.


My wife and I have been renting homes in the Orlando area for the past 25 years, always dreaming of someday buying our own place. Now, with retirement in sight, we are starting to seriously have that conversation. We don't want to keep renting. We want a place of our own, a place where we can leave our stuff and make it easier to hop on a plane with a backpack and head down for a few days or a few weeks, knowing that everything we need will already be there. The kitchen will be stocked with all of the non-perishable stuff like spices and canned goods, the closets stocked with cleaning supplies and paper products, the drawers filled with clothing.



A few years back, we did take the baby step of signing up with Owner's Locker, a company that rents portable storage containers and delivers them to you wherever you are staying and then picks them up when you leave. We just used ours last week on a short trip and we'll be using it again when we return in 2 weeks. That meant we didn't have to pack things like shampoo and conditioner, soap, mouthwash, dish and laundry detergent, extra hangars, and various other things we have stored in there. But it's still not the same as having your very own place.


So within the next year probably, we'll start exploring neighborhoods and developments to see where we want to buy. We already have a couple of realtors we know down there who can show us around and help us narrow down the options. I'm leaning toward a condo or maybe a townhouse where there would be virtually zero exterior maintenance to worry about. I want to be able to lock and leave.
 
^ that is great I hope you find the perfect fit home.

For the ones that owned a second home and later sold that home. It would be interesting to hear how their sale went and if they sold at a profit or loss. Either way renting or owning it is going to cost money one way or another. If you owned and then sold it maybe the cheapest way in the end.
 
I don't think I mentioned that we bought an in place park trailer with a huge enclosed screen porch up North on the big walleye lake.


It's perfect, on a small family run resort lots of trees, parks and common area. Ninety second walk to the lake front. We pay a yearly lot fee and do no maintenance including lawn mowing.



A big lofted area that's sleeps the grandkids..Better yet it's next door to youngest daughters unit.
 

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^ looks beautiful!!
 
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