2nd home/cabin etc. How'd you decide to pull the trigger?

[Carnage]

DW and I have been having discussions about buying a beach house or a cabin even though our first mortgage isn't completely paid off (but close). If you have a 2nd home/cabin/beach house, how'd you pull the trigger and decide to buy one? Or did you inherit it? As someone on the FIRE path, it's really hard for us to do that vs say just doing like a VRBO for a month.

 

[Ronstar]

We live in Illinois and wanted an Arizona snowbird place. Either a condo or townhome - something to lock and leave. I did several weeks of research online, and contacted a realtor. I drove to Arizona and scoped the area out for a week or so before DW flew in. This was 2002.

The realtor showed us several places. We liked one, put in an offer, and bought the place. We spent many winters there and I spent about a week per month there except for summers. We sold it in 2019 because we wanted something bigger, something to move in to full time. That hasn't happened - yet.

 

[USGrant1962]

Bought the family lake/mountain house from MIL before she passed. But it needed substantial updating/renovation, which we are still working on. If there wasn't a family second home where the kids (and DW) spent their summers growing up I don't know if we would have pulled the trigger on a second. But we love it, especially during COVID-19.

 

[jrcunniff]

I’m in a similar state of mind. My home is paid off, but I’ve been thinking about a second (beach) home. With the recent spike in housing costs, I’ve put those thoughts on the back burner.

The reasons for doing it were (1) I’d like to live by the shore once I retire, and (2) I thought purchasing made more sense *now* while I’m still actively working and pulling in an income, instead of waiting until I’ve retired.

What’s held me back (prior to the housing environment) were (1) trouble coming to a “final” decision about where I’d want to live in retirement, (2) determining if I really am comfortable uprooting my life to live where I currently have no family/friends in the area, and (3) deciding if I want to use it as a rental property (yes, for the revenue potential; no, for the hassle factor).

To date, the Cons outweighed the Pros. But I’m still considering and reconsidering.

 

[Winenot]

Shortly after the recession, we bought a condo in the Phoenix area ( had family there and were somewhat familiar with the city.) It was a great deal and, initially anyway, we viewed it as an investment. We immediately turned it it over to a property manager as a full time rental. Then, in 2017, we kicked the tenant out and have been using it in the winter months since. Absolutely love it! The condo is in a gated golf community and we are very comfortable locking it up and leaving it for the months we are not there. We live in a small city in the north so it’s nice not to deal with the extreme weather in the winter, plus we find so much to do in the big city to keep us busy.

 

[JP.mpls]

Carnage,
My wife of 39 years died of cancer. That is one big slap in the face, that life is short, and you can't take it with you.

We had always planned on getting a little place in Florida when we retired. I figured WTH.

I rented a VRBO in two different locations, and went down there looking for a place and area to buy.

I bought about the tenth place I checked out. It was in one of the communities I rented in.

I was there all last winter, and I had fun. It wasn't perfect, but it was an adventure. It was also a much more active lifestyle for me, than wintering in Minnesota.

If I get tired of it, or want something different, I will sell, and try something else.

My recommendation. Don't over think it, and take some chances.

Good luck,. JP

 

[RetireeRobert]

Never had any yearning for a second home. In years past, my family and I would rent beach house for several days. We found that, after some days had elapsed, we were getting bored. So, these rentals sated whatever need we had for "second home". Our thoughts, as well, was with a second home, that is where you always go. With vacations you can switch it up and go new places.

 

[Dawg52]

I bought my beach condo in 2014. Prices were off the lows but still a good deal at the time. I never dreamed values would escalate as they have but better to be lucky than smart I suppose. I would have a hard time buying anything in today's environment but if money is not a problem.....go for it.

 

[Octogirl]

2nd home

DH and I also talked about purchasing a 2nd home (vacation) for several years. Came close but never bought one. Last fall, we bought an Airstream ! Perfect !
We can move it when we change our mind.
This summer, we re at the beach for the whole summer !
We think of it as our "tiny house" ....less work and more time for having fun.
I know "glamping" is not for everyone, but we re loving it.

 

[oiseux]

Once we identified the location, we simply decided that if we were willing to lose what we put into it and still be on track, we took the plunge on a beach condo that will serve as a future FIRE base. This one is overseas, in a year round city with plenty of activities and destinations within reach.

The prior purchase was made partly for the investment potential, which made any financial considerations easier. That probably prepped ourselves for the next.

 

[luckydude]

DW and I have been having discussions about buying a beach house or a cabin even though our first mortgage isn't completely paid off (but close). If you have a 2nd home/cabin/beach house, how'd you pull the trigger and decide to buy one? Or did you inherit it? As someone on the FIRE path, it's really hard for us to do that vs say just doing like a VRBO for a month.

DW and I are in a similar boat. We've been talking about getting a vacation SFH (15k-2k sqft in size, beachfront or close to the beach with ocean views + a nice, big swimming pool for kids) either on the Big Island or Oahu for the last several years but just haven't been able to pull the trigger because the cons always seem to outweigh the pros.

The biggest con for us is having to deal with long-distance absentee ownership and maintenance for much of the year. We don't expect to spend more than 1-2 months a year there, so the rest of the time the property would sit vacant. What happens if a pipe leaks or the roof leaks or someone breaks in? We could probably hire some property manager to look after the property for us, but even then I'm not sure how the arrangement could work out.

On another front, I've also been thinking about getting a large acreage property up in the mountains (500+ acres) 2-3 hours from our home on which I can put up a cabin and build my own hiking/biking trails and get away from the world for some peace, quiet and solitude on weekends. I think it's doable logistically but I just haven't found the ideal property quite yet.

 

[DrRoy]

I inherited a lake cottage with my sister, but sold out to her. DW and I wanted to be able to go to different places on our travels and not have the demands of maintaining a permanent property. Now we do VRBO/AIRBNB.

 

[old medic]

Ours was easy... the foreclosed house next door that we had been wanting to buy came up for auction..... $6500 later it was ours....

 

[Philliefan33]

In 2011 we purchased a vacation home in a lake community sixty miles (but a world away) from our primary home. We paid cash; half from an inheritance and the balance from our savings. The purchase had no effect on our RE plans.

While I was w*rking, we came up on weekends to decompress. Now FIREd, we go back and forth between the houses as we wish. I pretty much live at the vacation home from May 1 to Labor Day. I have a summer gig that pays me to kayak and bike, I spend my days off doing those two activities or hiking or relaxing at the lake. It’s like being at summer camp. The only downside is the dearth of competitive pickleball players. DH prefers pickleball over kayaking & biking so he spends more time at the main house.

Key things that make it worth owning rather than renting: The trip from one house to the other is an hour and fifteen minutes. That’s close enough for 1-2 day visits when we want, or to do maintenance. The carrying costs (taxes, utilities, etc) do not strain our finances a bit so there is no reason to rent out the property.

If you decide to buy, keep in mind that owning two homes means you end up owning two of almost everything.

 

[street]

I always felt to own is better then renting. In the case of owning two homes miles apart doesn't seem so appealing. Like other posters have mentioned you have double of what you have with one. I would love to own and travel to my winter get away each year but but sure I want all the stress of owning two places so far apart.

I do have a ranch home besides our main home but I'm 20 minutes from it and visit and stay through out all seasons. It is a settlers line shack and no real up keep is required.

If it was me I would just rent if going for just a few months, if it is a air trip away. If close and you can spend time there fast and easy, then buying makes sense to me.

I bought my place then I built my 3 season cabin. No power, no running water but have a wood burning stove that I could live there in an weather conditions.

Good luck!

 

[JDARNELL]

My wife and I were looking at a second home near where our boys were going to college so we could have a nice place to stay during their baseball season. Our realtor said why don’t you do a vacation cabin since the time you plan on being here doesn’t really conflict with tourist season. So we went that route. We just blocked the cabin for the days we wanted to be there. During covid we had a place to rally at when the kids got sent home from school. Of course now our place stays rented 250 days a year.

 

[pb4uski]

DW and I have been having discussions about buying a beach house or a cabin even though our first mortgage isn't completely paid off (but close). If you have a 2nd home/cabin/beach house, how'd you pull the trigger and decide to buy one? Or did you inherit it? As someone on the FIRE path, it's really hard for us to do that vs say just doing like a VRBO for a month.

My family had a lake cabin growing up about a half-hour drive from home. My dad built it when I was 6 years old and I accompanied him for a lot of that build. There is a spot on the floor of the bathroom that is filled with roofing nails... he needed me occupied so he could focus on something and gave me a hammer and bunch of roofing nails an put me to work... I can see it each time I'm in the basement.

When DW and I were dating she grew to love it there as well... so we always had buying a place there but our expectations of what we expected to pay was always just a little behind the escalating prices.

At one point we even bought a building lot on another lake, but ended up not liking the location... the bottom was mucky and it was a really shallow area... so we decided not to build and solt the lot.

A FSBO 3-season property came up for sale about 5 doors down from my mom's place the year my dad died but they were asking a lot for it. We looked at it and dilly-dallyed on it all summer. Finally a good friend told me "PB, that is where you want to be, just go for it"... so we bought it that fall but did have a mortgage.

Two years later we had to replace the septic sytem so we put in a foundation septic system and a well. Five years after that we demolished it and rebuilt a new year-round home on the foundation. Shortly after that we moved in and made it our year round home.

It sort of just comes down to making a leap of faith.

 

[pjigar]

We only bought the second home after we had a decisive plan for moving to the second home a few years down the road. It doesn't make sense to own two houses for us in Texas with high real estate tax. And add insurance, maintenance and utility for the new place. Do a simple math: How much would you spend on VRBO every year? How much would be taxes+insurance+utility+interest(or lost return)+maintenance going to be for the 2nd home? The answer would be obvious. Unless you have special case like moving soon, sentimental, etc. then second home do not make financial sense. If you are in a popular tourist place and do VRBO of you second home then equation changes exactly opposite.



PS: I have heard that if you have a long distance second home then your vacations are spent fixing things.

 

[pb4uski]

Yes, second homes are an expensive splurge. My sisters are keen to keep the family lakefront home when my mom dies... the annual property taxes and upkeep are about $13k a year, but the other thing to consider is that you have a $400k investment that earns nothing and the opportunity cost of money on $400k at 4% is $16k... so your total economic cost is about $29k.

Divide that $29k by the number of days that you use it and the result can be startling.

 

[bobandsherry]

Guess depends on how much time you plan to spend there. Is that where you want to go over and over and over? Do you want to maintain a second home? For my wife and I, we enjoy going and doing different things so never considered buying just in one place, we'd feel we'd have to go there just because we owned it. And I didn't look forward to remote management of the property.

 

[JRon]

The people we know that have made that purchase and the people we know that haven’t, have mostly been driven by family. Friends just bought a lake cabin so they can have their kids and future grandkids all gather together. We decided not to purchase a 2nd place so we’re home more to spend more time with our grandkids. We do travel quite a bit and just use hotels or Airbnb/VRBO when we do.

If family doesn’t enter into the equation and you want to go to the same place all the time, then it’s pretty much a financial decision and you can do the math.

 

[Scrapr]

Our 2nd home was in an area that I traveled for business once a week. For several years i stayed in hotels. The family would come over & we would do activities & loved it. After about 4 years of that we bought a SFH. We loved having all our own "stuff" in the exact same place we left it. I would do yard maintainece & other easy stuff while there.

We loved it so much we sold the big house & moved there full time. The biggest driver for buying was to have good family time

 

[harley]

I always felt to own is better then renting. In the case of owning two homes miles apart doesn't seem so appealing. Like other posters have mentioned you have double of what you have with one.

This is one of the biggest issues IMHO. We've got 2 (or 3) of a lot of stuff. And no way to recoup the costs. If we decide to sell our FL place we'll haul a bit of it back up north, but other than that Restore and Goodwill will be getting a bonus. Maybe I'll have a SWFL ER open house and let omni and JP and the others take anything they want first.

Yes, second homes are an expensive splurge.
[snip]
Divide that $29k by the number of days that you use it and the result can be startling.

Like RVs, boats, etc., people seldom have second (or third) homes for financial reasons. More like despite the financial reasons. To some, it's worth it without question.

Personally I'm leaning more to Street's solution.a home in town, and some nearby nature/relaxation to escape to on a regular basis. Then throw in renting someplace warm for a couple of months in the winter, and you're set. Sounds like a plan.

 

[oiseux]

Yes, second homes are an expensive splurge. My sisters are keen to keep the family lakefront home when my mom dies... the annual property taxes and upkeep are about $13k a year, but the other thing to consider is that you have a $400k investment that earns nothing and the opportunity cost of money on $400k at 4% is $16k... so your total economic cost is about $29k.

Divide that $29k by the number of days that you use it and the result can be startling.

(edited to fix quote)

They can be an expensive splurge, but a lot of that can be mitigated. In my case, I can rent it out while not using it via a full-service management company. Even after deducting their fees and all other expenses, I earn 4 to 5% back on my investment, with RE appreciation on top of that.

 

[skyking1]

It is topic we touch on. in 2009 after the economic reset, we purchased a lot by the beach on the county foreclosure auction. We were tent trailer campers then, but you needed a self contained RV with bathroom to camp on your lot. That sent us down the trail of a diesel truck or two and several different 5th wheel trailers.
We are into the lot around 14K and comp sales are around 25K for it. In terms of money it is a nothingburger. Yearly taxes and stormwater is <300.
We keep it because we always have a reservation on the busy summer camping weekends
The last few years we have only gone a couple of times, and we came to the conclusion that we will not be building on the lot or having a second home there.
We do camp often in the 3 seasons. So far we have not nailed down a single location that would suit us that is within a reasonable drive.
If we had to fly then renting AirBNB would be our choice, as property = responsibility in our life experiences.