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Old 06-23-2020, 09:52 AM   #41
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Has any purchased a vacation/second home after retirement and later felt they shouldn’t have done it simply because of being at an older age? At 60 I realize I probably won’t live long enough to pay off a 30 year mortgage but like many people I’ve always wanted a place but financially couldn’t do it.

With money no longer being a real concern I’m now thinking about it. Any of you others have a strong feeling one way or another on such a purchase? Admittedly I would have gotten more use out of it when my kids were younger but like most parents with a family I couldn’t afford it.
I have never purchased a vacation/second home, even though I could easily afford it, because I don't see the point (for me). And of course, at age 72 keeping up with two homes would be a challenge I suppose.

It probably makes more sense for those living up north who need/want to snowbird. But me, I'm here living in my paid off Dream Home which is exactly the home I have dreamed of owning all through my life. Every morning when I awaken and realize where I am, it is a huge thrill. Not only is my Dream Home perfect for me, it is set up exactly the way I want it, too. I can't imagine why I would ever want to leave and go live in some other home, even briefly. There is so much to see and do in New Orleans that even pre-COVID19 we never felt bored with living here.

I have occasionally thought of buying a home a few hundred miles north of here for hurricane evacuation usage, like many New Orleanians do. But really we have only had to evacuate once in the past 15 years since Katrina, and that was only for two nights so it doesn't make sense to me.
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Old 06-23-2020, 10:08 AM   #42
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We live in a fairly dense neighborhood near the hospitals - plenty of sirens, homeless people, restaurants, stores, city park and zoo nearby. There's a condo in our complex, almost a mirror image of ours, that seems to be a shared family vacation home. Vacant most of the time, then around holidays, folks open it up, put the patio furniture out, and congregate for a week or so. Assuming Grandma bought it in the early '90s at half the price we paid for ours, and willed it to the kids without triggering a reassessment, they are paying minimum $2500/year in property taxes, $679/mo for the HOA (elevator building with pool, tennis courts and garage parking), plus a massive $33,000 plumbing replacement assessment in 2016. We live here full-time and don't really think of it as a vacation spot, so I can't imagine pouring that much $$$ into it as a second home. Maybe they find it relaxing compared to where they're coming from? Remind me not to move there, wherever it is!
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Old 06-23-2020, 11:21 AM   #43
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30k cost of ownership for 9 years =270k
Then sell it for 50 more than you paid so thats 50k profit against the 270k loss which is 220k loss.

You should use a different logic for second homes. Your primary home is your cost of living and if you didnt own it you would be renting something so its part of the cost of living.

But noone needs a second home. Its all just extra money out the door that you didnt need to spend. Everyone likes to use different logic to try to justify it, but the truth is instead of that second home you could just go on a cruise every year. On a cruise you are also getting the use of the ship during the holiday but few of us would say you are investing in the ship.

I only point this out because there is an entire industry out there trying to convince you that a second home is just like your first home and is an investment. Lots of my friends have second homes and they nearly all think of them as investments. But the only ones who make a profit are the ones who dont track their expenses.

Lake Tahoe where the OP was asking about requires an outlay of 500-600k to buy a 3 bedroom house on a small lot. Its a harsh climate at 6300 feet with nearly a hundred feet of snow a year. You are looking at repainting your house every 10 years and replacing the roof every 15. The driveway and decks need to be redone every other year. Property taxes are close to 10k a year. Utilities are expensive as you need to keep the heating running all year and even a small garden needs water. 30k was about as low as I could do it with doing most work myself except for painting and roofs that require ladders.

My neighbor bought a bigger and pristine house for 700k and then didnt do a lot of maintenance. After about 10 or 12 years the whole place was looking pretty tired and he grew tired and put it on the market. It only went for 500k and the new owner put about 200k in to bring it back to how it was originally. These houses need to be fed money and are going to get it one way or the other.

I am not trying to dissuade anyone but at least go into the transaction with your eyes open. I often thought the shack approach was the way to go for a summer home but in the winter it needs to be comfortable. If its not more comfortable that your primary home you wont visit.
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Old 06-23-2020, 12:13 PM   #44
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FWIW I wouldn't consider buying in any of the states with serious financial problems like CA and IL. Far too risky.

More: https://www.pewtrusts.org/en/researc...nding-gap-2017 and many other places.
This is really a great point. I live in Illinois and would not consider a cabin or lake home simply because you truly don't know what they will hit you with next as far as taxes and other regulations. The cost for plates on my 4'x8' trailer jumped 555% this year. I understand that you probably wouldn't be registering vehicles at a second home but that is just an example of the craziness that we see here. Today it may be an increase for plates but tomorrow it might be some form of non-resident home fee to cover our crippling debt.
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Old 06-23-2020, 12:16 PM   #45
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30k cost of ownership for 9 years =270k
Then sell it for 50 more than you paid so thats 50k profit against the 270k loss which is 220k loss. ...
But when you bought it you knew, or should have known, that owning it would cost you $30k a year.... right? And you presumably thought that your enjoyment of the use of the property was worth $30k a year if you bought it... so there is no loss.

It is no different that if you made a decision to spend $30k a year on travel for 9 years and then stating that your travels were a $270k loss.

WADR, totally silly.

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..... a second home is just like your first home and is an investment. Lots of my friends have second homes and they nearly all think of them as investments. But the only ones who make a profit are the ones who dont track their expenses. ...
WADR, neither are investments.... your principal residence is where you live and if you don't rent you pay property taxes, insurance, and perhaps mortgage payments instead of rent. A vacation home is a lifestyle choice and not an investment. That said, I've had both homes and vacation property that I have sold for more than what I had invested (original cost and cost of capital improvements) and others for the same.

You are totally ignoring the value of being able to use the property... most people consider that the cost of use in lieu of rental or lease costs. If you had the property and chose not to use it then that is on you.
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Bought one
Old 06-29-2020, 06:13 PM   #46
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Bought one

I inherited some surprise money from my father that I used to buy a vacation home in Western North Carolina, an area we love. We bought it fully furnished and found a fantastic property manager who keeps it in great condition and rented when we aren’t there. We may well end up retiring there. We knew NOTHING about this kind of stuff, but boy have we been happy with the purchase. We have not only a beautiful place to go in these awful times, but also a new source of income
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Old 06-30-2020, 10:19 AM   #47
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Our first condo that we purchased in 2007 was built in 1987, so we expected to pay every year to maintain/upgrade it. When we sold it, we took a capital loss of $30k after all expenses, so that ended up being $3k a year and we spent 5.5 months there every year.

We considered it to be a winning decision financially.
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Old 06-30-2020, 01:11 PM   #48
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You can rent a vacation home for a long time lease.
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Old 06-30-2020, 02:32 PM   #49
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When I worked, I would head for the lake house early on Fridays--getting there just in time to take in that incredible 6 mile sunset view to the west.

My father was sitting on the 36' screened porch and he'd say, "I've been looking at this view my whole life."

Well, now I sit on the screen porch in the same chair, and I think about the five generations that have enjoyed our place. And I also think "I've been enjoying this view for the last 70 years." And it all makes keeping the place worth every penny.
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Old 06-30-2020, 08:44 PM   #50
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If you haven’t thought about renting Out the place you buy through airbnb/vrbo, it’s a lot easier than we ever thought.
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