Purchase a vacation home ?

[Cassius King]

I'm following this conversation closely as I'll be in the same situation. I want to find a vacation home in Florida. Either as a permanent residence or a three to four months a year place and possible rental.
I can't get FloridaTennisPlayers post out of my head while reading this thread. It beautifully painted a picture of what I want.

Cheers!

[Cassius King]

Found it.

http://www.early-retirement.org/foru...you-94398.html

[gauss]

• Are you all caught up with everything you want to do with your main home?
• Feeling bored or is your ToDo list always growing?
• Can you get it for less than 5% of your portfolio?
• Would you still be happy if you sold it in 20 years for the same amount you purchased it for today?

These are the types of questions that I would ask myself if I were in your shoes.

I can't answer yes to these questions, personally, so I would say no for me.

-gauss

[HadEnuff]

I would very much like to spend at least Dec-March in Florida. I think. I haven't done it yet, and this season will be my first season snowbirding, spending Jan-March. From a strictly dollars and cents point of view, I haven't found anyplace where the math evens out for me if I only spend 4 months there. By the time I factor maintenance, HOA fees, insurance, taxes, and mortgage interest, it always seems to work out to about 7 months is the "break-even" point.

As far as hassles and conveniences of renting vs. owning, right now, for me, it's a wash:

renting, you have to find your place, use other people's furnishings, and hope you like it, and if you do like it, you hope it doesn't get jerked away from you by something crazy like the owners retiring and wanting to use the place themselves.

Owning, you have to deal with maintenance, and on a place 1200 or so miles from home, that's a drag. A big hassle in my book.

My current plan, which thus far has not met the overwhelming approval of Mrs. HadEnuff, is that if we find a place we (I?) like enough, and we enjoy the snowbirding enough to do 4 or 5 months, I'll continue to rent. I think I like my life as simple as possible.

[Scuba]

Quote:

Originally Posted by travelover No, I'm waiting for something really offensive.

[emoji23]

[Scuba]

Quote:

Originally Posted by Octogirl Thanks for all the thoughts on purchase of vacation home. My family has owned a vacation beach house about 10 miles away since the 1960s, so I am very familiar with the area, costs, taxes, headaches. My sister, cousin, and a friend have vaca homes in the same area. So Yes, part of this decision is personal choice. We have looked at other homes in this town over past 2 years but it was never the right deal. This house is on the water......with wonderful views. Other homes on the street are being rehabbed, so DH thinks it will appreciate. I looked at comps and maybe it will- but maybe it won't. We have not made a decision yet but as many of you point out - it is a commitment of money, time, and maintenance. Because it is a foreclosure, we have a week before bids are due. Thanks again for your time and thoughts.

A property on the water with great views may be a good investment, but it likely still depends on market cycles. We own a beachfront condo in So CA and the market here is very volatile. It’s been going up the last several years, but went down dramatically in 2008-2011, so the net appreciation is probably only 2-3% annually.

Some good questions posted here for consideration. Let us know what you decide. Good luck!

[Crabby Mike]

We went looking for a place to park our motor home somewhere warm in the winter, and ended up buying a house in Arizona. It works for us, because:

• we were very selective, and found an opportunity that we thought (correctly, as it turned out) would appreciate
• we analyzed everything to death before deciding, i.e., didn't give in to irrational enthusiasm
• this included putting all costs, including the cost of capital tied up in the home, utilities, maintenance, travel to/from, etc. into our budget, to make sure we could truly afford it even under the least rosy scenario
• we visited there at different times of the year, and made sure we liked the area under varying conditions, not just ideal ones
• we compared the purchase we were considering to a number of alternatives, exhausting ourselves and our realtor looking at different properties. We were glad we did, because our plan evolved into a different choice over the course of this "due diligence."

I can't over-emphasize the importance of taking the time to make sure you're making the smart choice, even if it means you miss out on a limited-time opportunity. But all in all, I have to say our retirement life is made much richer by splitting our time between two very different homes. We appreciate each one more now when we return there. It's expensive and can be complicated, but for us it's worth it!

[pb4uski]

Quote:

Originally Posted by HadEnuff I would very much like to spend at least Dec-March in Florida. I think. I haven't done it yet, and this season will be my first season snowbirding, spending Jan-March. From a strictly dollars and cents point of view, I haven't found anyplace where the math evens out for me if I only spend 4 months there. By the time I factor maintenance, HOA fees, insurance, taxes, and mortgage interest, it always seems to work out to about 7 months is the "break-even" point. ....

Our annual carrying costs (condo fees, insurance, property taxes and electricity) are a little less than 3 months of in-season rent. We bought for cash.

The annual opportunity cost of money net of the annual appreciation is a little less than 2 months of in-season rent.

If I put them together, our total costs are just a little more than 4 months of seasonal rent... so our break-even point is 3 to 4 months depending on what you include.

We had planned to rent 3-4 months a year but ended up buying when an opportunity to buy in the area we wanted to be in popped up unexpectedly at a time that we couldn't find a seasonal rental... since we now have the place, we spend almost 6 months down here for essentially the same annual cost as a 3-4 month seasonal rental. We are in a late 1970s era association that is well maintained but admittedly the common areas are a bit dated.

[DAYDREAMER]

We had a water front house on a beautiful bay in Puget Sound that was 5 miles away from our primary residence. It was a 1100 sqft rambler on a 10k lot in a private community setting. We lived in it for 4 years to see if the water front lifestyle was for us, but kept the other place just in case. We found that privacy was much more important to us, and honestly, the water front luster lost its shine over time. We moved back to our house on acreage with total privacy and sold the beach home.

Luckily, we broke dead even when we sold. Owned the place for 9 years total basically for free due to higher resale.

Due to maintenance issues, I could not imagine owning a second home hundreds or thousands of miles away. What a total PIA!

[Crabby Mike]

Quote:

Originally Posted by DAYDREAMER Due to maintenance issues, I could not imagine owning a second home hundreds or thousands of miles away. What a total PIA!

Good point, and something I forgot to address. We would never have done this if we hadn't found a "lock and leave" home -- one that through design and/or by paying for service, we felt we could safely leave for months at a time without worrying. In our case, that includes a gated community, security system with cameras, and services to regularly check and maintain the home. This is a growing trend, especially in retirement/snowbird destinations.

[RAE]

We've been snowbirding (for about 3 months) for the last 8 or so winters now - first to Texas, and this winter to Florida. For us, renting a place is an easy decision. For one thing, we like having the option to change locations if we so desire. Hurricane Harvey hit the area in Texas where we had been going, so we had no choice but to go somewhere else the next winter, and it worked out fine for us. There is no way I would want to deal with all the expenses and hassle of owning a place down south as long as we are able to find affordable places to rent. Yes, rental prices are going up in many areas, but the sheer number of rentals out there usually means you can find something in your price range, in a location that works for you. At least it has worked for us so far, so we have no plans to buy a place down south.

[pb4uski]

Quote:

Originally Posted by DAYDREAMER ... Due to maintenance issues, I could not imagine owning a second home hundreds or thousands of miles away. What a total PIA!

That is the beauty of condo living... all I have to do is clear the fridge of stuff that will go bad, turn off the water, set the thermostat/humidistat and lock the door. Easy peasy.

[RenoJay]

I just sold my vacation home. I made money on it since I bought close to the bottom of the downturn. But it appreciated slower than homes in the nearby town that has the jobs. Personally I would NOT go for it. I do a lot of real estate stuff and am seeing signs that there will be better opportunities over the next couple years. Hey think the real estate market is still too frothy and that vacation homes get used a lot less than owners anticipate, and have much higher level of ongoing expense/headaches than anticipated. If it were me I’d simply pass on this opportunity and instead splurge on some nice vacations here and there.

[sheehs1]

About a year and a half ago I did it. I purchased a 1,200 sf 2 bed, 2 bath water front condo on the Chesapeake Bay in Va. It was a quality of life decision, a little over an hour from my inland home and love it! Since my home is in a small city with few choice of amenities, the condo has given me access to more things to do, much better restaurants, grocery stores, better shopping alternatives, and a community of like minded people.

This condo is not a headache for me. Like other posters said, I adjust the thermostat when I leave, I don't turn the water off since I return often (most but not all week-ends but not the cold winter months as it's brutal on the bay in the winter Jan/Feb).

I do take a lot of stuff back and forth as I have not gotten to the point where I am comfortable leaving "that skirt, dress, those shoes or top"..that i might want at my other place. so I stay "packed" to some degree, so to speak. I"m sure I'll get over that eventually!
I am able to take my dog with me and not worry about boarding, etc.

My yearly carrying cost are about $800 a mth, including taxes, insurance, HOA, Utilities, TV and Internet. Similar to what you are expecting for your costs

I had looked for years for "the right fit" in both coastal Va. and coastal N.C.
What helped me make the decision when I'd found the right fit was this thought.
"If not NOW, When". I wasn't getting any younger!

It is a personal choice. Best of Luck with your Decision.

[Ronstar]

Quote:

Originally Posted by pb4uski That is the beauty of condo living... all I have to do is clear the fridge of stuff that will go bad, turn off the water, set the thermostat/humidistat and lock the door. Easy peasy.

+1. We do the same thing. Very easy.

And I had a pleasant surprise when we returned - I left 1 beer in the fridge last March when we left.

[omni550]

Quote:

Originally Posted by Ronstar +1. We do the same thing. Very easy. And I had a pleasant surprise when we returned - I left 1 beer in the fridge last March when we left.

I always leave a few beverages in the fridge. It's very nice to enjoy upon arrival.

omni

[Floridatennisplayer]

Quote:

Originally Posted by Cassius King I'm following this conversation closely as I'll be in the same situation. I want to find a vacation home in Florida. Either as a permanent residence or a three to four months a year place and possible rental. I can't get FloridaTennisPlayers post out of my head while reading this thread. It beautifully painted a picture of what I want. Cheers!

Ha! We just got back and loved every second. Could not fathom not having our place. Maintenance? We have a gorgeous condo on the course in a gated country club. No maintenance to do. When we leave, set the thermostat, turn off the water, and lock the door.

[HadEnuff]

Quote:

Originally Posted by pb4uski Our annual carrying costs (condo fees, insurance, property taxes and electricity) are a little less than 3 months of in-season rent. We bought for cash. The annual opportunity cost of money net of the annual appreciation is a little less than 2 months of in-season rent. If I put them together, our total costs are just a little more than 4 months of seasonal rent... so our break-even point is 3 to 4 months depending on what you include. We had planned to rent 3-4 months a year but ended up buying when an opportunity to buy in the area we wanted to be in popped up unexpectedly at a time that we couldn't find a seasonal rental... since we now have the place, we spend almost 6 months down here for essentially the same annual cost as a 3-4 month seasonal rental. We are in a late 1970s era association that is well maintained but admittedly the common areas are a bit dated.

Just curious, when did you buy? I don't have the cash handy for such a purchase, so I have to figure in the mortgage costs. I'm not too surprised to hear that without the mortgage interest, the right opportunity at the right price could bring the carrying costs down more to the 3 month in-season rate.

[wdberry62]

To each his/her own, but if it were me, I'd save the money and the hassle and vacation wherever you want. These vacation homes tend to become a liability rather than an asset; a source of worry rather than enjoyment. I've seen that first-hand with both my parents and in-laws.



I vowed never to make the same mistake.

[Floridatennisplayer]

I have also rented my condo to a sweet older couple for the past 3 years in the winter...as I’m not retired yet, for 90 days. And that covers all but $1,100 of my total yearly costs.

I know of some people who rent out their place for just January and February then come down March-May. I asked why would you do that? Their reasons:

An easy $7,000 cash to defray their ownership costs
Less people! Less traffic, restaurants, shopping
Love the weather in March-mid May.
Also come down in mid October and come back home just before Christmas

Now, I am a thinking I like this idea.