Vacation home, do you regret it?

[imoldernu]

Ditto on the reserves...
IMHO, that's the first question to be asked about "communities". Best friend bought in to a condo... Two weeks after moving in, received a bill for $18,000 for safety upgrade to balcony. Newer construction that didn't pass revised building code. HOA had enough reserve for $2,000 of the actual cost. In larger communities, (particularly older ones)... a good look at common area roads, clubhouses, tennis courts etc... can give a clue as what to expect in the coming years.

While we were still in Florida, and considering it as a permanent home, the real estate people typically were evasive in cases where the reserves were inadequate, and quite boastful, when they were adequate.

 

[Scuba]

Homes can be moneypits, main or vacation homes. No ifs or buts about this.

And not all locations enjoy appreciation as in California. I never follow home prices closely, and only look at nearby home sales out of curiosity.

While the market in CA can do well over time, it can also crash very painfully. We have made a lot of money on properties here, and have also lost a lot. I would not count on making money on a second home if it's in a popular vacation home market. When the economy crashes, people stop paying mortgages on their vacation homes, and the bottom falls out of the market, big time. Even beachfront property in CA took a huge hit in 2009-2010 and took 5+ years to recover in some markets.

 

[Fedup]

While the market in CA can do well over time, it can also crash very painfully. We have made a lot of money on properties here, and have also lost a lot. I would not count on making money on a second home if it's in a popular vacation home market. When the economy crashes, people stop paying mortgages on their vacation homes, and the bottom falls out of the market, big time. Even beachfront property in CA took a huge hit in 2009-2010 and took 5+ years to recover in some markets.

It depends on the location. My areas hardly took a hit, maybe 20% down from the peak at most. I know because I was waiting for a bargain that never came.

 

[audreyh1]

Some years ago, during a very stressful period of my life, I had really wanted "my" vacation home. But I was not interested in the upkeep and maintenance, nor did I feel that the cost was justifiable, given that most vacation homes are occupied for weeks, not months, per year.

Enter fractional ownership. No, it is not the same as a timeshare. It's like owning a piece of a condo. You have a schedule, and you always get to use your own condo. You pay a fraction of the condo fees, the owners' association fees (covers insuite maintenance, upgrades, marketing) and property taxes. Just like a regular condo, you can be on the HOA. If you need ~4 weeks per year, you might purchase a 1/12 fraction (which I did). If you can't or don't want to use your time there, you can send close friends, put the time in a rental pool, or exchange it with other properties.

I made great use (close to 100%) of my fractional ownership for 5 years, and it was an absolute lifesaver. Then I decided I really liked the area, and moved there. Now I put high season weeks in the rental pool (which covers most of my expenses) and I put low season weeks in an exchange program. The result is that for the past decade I have had access to luxury vacation properties worldwide at a fraction of the cost I would normally incur to stay in them independently. The accumulated savings easily cover the initial cost of my vacation property, which I still own. It has been an excellent lifestyle investment for me. No regrets! I think the key is that I always understood it to be a lifestyle investment, not a financial investment. People who bought larger fractions than they needed have discovered that over the years.

When you say "moved there" do you mean you bought another condo or property in the same area? Which you rent/exchange for most of the year? So where do you live if the property is exchanged out - other properties? And where do you live when it is rented? Sounds fascinating, but I got a little lost.

 

[Meadbh]

When you say "moved there" do you mean you bought another condo or property in the same area? Which you rent/exchange for most of the year? So where do you live if the property is exchanged out - other properties? And where do you live when it is rented? Sounds fascinating, but I got a little lost.

I bought another condo in the area, and I now live in that condo year round.

I retain ownership of my vacation property, but I no longer use it for my own vacations. I put high season weeks in the rental pool (generating income) and low season weeks in a vacation property exchange program (generating luxury vacation accommodation for me, see below).

https://www.theregistrycollection.com

 

[capjak]

Timeshares work for us and some others (see full-time link below of some people that are doing this full time).

I bought all mine on the resale market for a fraction of the developer price and get unlimited weeks via II getaways at around $500-$1000 per week in 2 bedrooms. Maintenance fee including reserves is $1,000 per week.

http://fulltimetimeshare.com/blog – Mike and Edie's adventures travelling from time share to time share for 2 to 5 years

 

[audreyh1]

I bought another condo in the area, and I now live in that condo year round.

I retain ownership of my vacation property, but I no longer use it for my own vacations. I put high season weeks in the rental pool (generating income) and low season weeks in a vacation property exchange program (generating luxury vacation accommodation for me, see below).

https://www.theregistrycollection.com

You originally had ~4 weeks in that condo, 1/12 right? So you had a mix of high season weeks and low season weeks? Or did you end up with more weeks? If it takes that few weeks to generate income to cover the coast AND sufficient weeks in an exchange program, that's pretty amazing!

 

[Meadbh]

You originally had ~4 weeks in that condo, 1/12 right? So you had a mix of high season weeks and low season weeks? Or did you end up with more weeks? If it takes that few weeks to generate income to cover the coast AND sufficient weeks in an exchange program, that's pretty amazing!

In my vacation condo, I own a 1/12 fraction, and the schedule is a weekly rotation. Therefore, every twelfth week is mine. Usually this means four weeks in a calendar year, but if the first week is early in January, there may be five that year.

Because this is a fractional ownership of what is essentially a very well managed condo building with a fully funded reserve (I've been on the board) costs are very reasonable, currently just over $1000 CDN per year. There are no extra charges for using my condo except for a $70 (CDN) housekeeping fee for each week.

When my condo is in the rental pool, I get a fraction of the total rental pool revenue. In the past couple of years, that has covered my costs.

When I use my weeks to exchange with another property in the Registry Collection, I pay an exchange fee of ~$300 US. The type of accommodation that I get in return usually would cost 8-10 times that if booked independently.

 

[street]

I will throw in my 2 cents even if my second place isn't a vacation home but a very rural cabin.
There was some very good advise from the posters and it is for some not for others. If you desire one and want to buy it that isn't all bad. You can always sell the property and may even do better then what you paid for it.
My cabin is a place of paradise for me and a few friends and son. It is my get away and it has everything I have a passion for like fishing, bow hunting, hiking and working the land and being close to nature. My place doesn't cost really anything for up keep because it is a small cabin I built and is nothing fancy or has any provisions. I don't even insure it but still I can stay there for 3 of the seasons.

 

[NW-Bound]

Another alternative is an RV parked semi-permanently at the desired location. In my RV travel I have seen a lot of "seasonals", as they are called, in commercial campgrounds. In Nova Scotia, I chatted with an older man who lived in a nice 5th wheel that he rented a yearly spot to park to be close to the sea. When the CG closed down for the winter, he went back to his apartment in town, which was just a few miles away.

The drawback is that some CGs may be crowded, and the scenery may not be ideal.