Vacation home, do you regret it?

[Danmar]

It's such a personal choice. Bought our first "vacation" home in 1997. It's a lakehouse (called cottage) in Ontario about a 2 hour drive from Toronto. Used it as a weekend getaway place while working. Got a lot of enjoyment out of it. Still do. Family, friends on weekends. Boating, etc. I retired in 2006 and bought another "vacation" property in Canmore Alberta. This became our principle residence. Took up skiing and biking. Winters were long though so bought another place in Arizona. This made 4 places.
Obviously, not something most people would do, but we enjoy it. Need to hire professional property managers and this can be expensive. Still travel a fair bit to international destinations but warm weather trips to the beach not necessary with the Arizona house.

Rent instead of owning? Depends on your personality. Do you want to be in control of do you want to be flexible? I like my clothes in the closet, my car in the garage, my furniture, etc when I arrive. But I can certainly see the other side of the issue. Usually a lot cheaper to rent.

These are lifestyle rather than financial decisions. No regrets.

 

[Danmar]

We do about 6 months in SoCal and 6 in Oregon. Own in both places.

Every trip we end up trashing a bunch of condiments and partial containers (pickles, coffee, etc.). Have tried to outfit each place completely with the fantasy that I could get on an airplane with just a toothbrush; with the result that, again, the pants or jacket I wanted is 1000 miles away.

All that said, I like living with our stuff and our furniture and our design choices. I like owning, not renting.

I know the feeling. We have basically completely outfitted 4 places. The clothes we keep at each place meet the needs of that place and are all quite different. I know where everything is (mostly). We often move to another place with hardly anything, certainly have a tooth brush everywhere Sometimes we will have an issue when we travel internationally picking the right clothes which could be in different homes.

I am an owner type of guy too, for better or worse.

 

[O2Bfree]

We had a little vacation place on a nearby island for five years. We had some extra cash to invest, and real estate prices were down, so we decided to pick up a place partly for investment and partly for pleasure. The island is "the shortest distance to far away", as the tourism ads tout, we can get there in about an hour, and we were lucky to pick up a cute place on a short sale.

We did enjoy it, but it was quite a bit of extra work making repairs and keeping up the yard (it was a small place on 3/4 acre, so lots of mowing and weed/brush control). We probably would have kept it longer anyway, but the HOA was planning some large assessments for repairs and upgrades at the marina. Much of the work was hotly protested by members who had less expensive places not on waterfront property.

Also, some of the planned improvements were unnecessary and/or overly-expensive. Some wealthy people on the HOA board were from the mainland's east side and wanted a more upscale look. We're talking improvements such as a $30K card-lock gate for the parking lot at the fishing beach, where a simple chain with a padlock had worked fine for decades. Or $500K to replace a very short bridge that could have been replaced for half that. This, on a local island paradise with charm largely attributed to its funkiness.

So we bailed and sold the place last year. Made a nice little profit, and no more weekends spent mowing and bushwhacking over there, but we do miss the place from time to time.

 

[HadEnuff]

Have spent years considering this. Just cannot get comfortable with owning two places; maintaining one is enough headache.

I'm with you.

 

[kcowan]

I think the key factor is whether the OP loves maintaining properties. For cottage properties, expect to spend 5-8 days of hard work before you can enjoy it each year.

For rentals, be prepared to be frustrated that certain things should be done.

For HOAs, expect to be frustrated if you are out-voted for improvements.

There is no universal perfect solution. Only something that fits you for some period of your life. And consider it a lifestyle expense. If it makes money, consider yourself very lucky!

 

[W2R]

As you all probably know by now, I am quite a homebody and do not have any desire to travel. I also have no desire for a second home, but if I did then I'd buy one of those lock-n-leave condos in a multistory building, that I wouldn't have to maintain or be too concerned about when gone.

But for me, it's just not anything that would add to my life. I would always feel obliged to go travel to the property and check on it at least once or twice every single year. I have more that I want to do with my retirement time. Obviously others feel differently about having a second home.

 

[Fedup]

I was debating about buying a place in UK this year but the design of the bedrooms were just weird. So I didn't. I go to Hawaii yearly and usually rent at the same luxury place. So it feels like home. They have the same decor so it's not a problem. But very glad I backed out of a timeshare years ago, even though it's in Hawaii but the timeshare is not as luxurious as the one we normally rent. Both of my brothers bought timeshares in Hawaii, they are now regretting. They are now bored with Hawaii.

 

[Gumby]

For the past 16 summers, the young wife and I have rented the same house on a beautiful lake in mid-coast Maine. It is usually a family affair, with mother in law, sisters in law and nephews coming to stay for varying amounts of time. By now, it really does feel like home, and we quite enjoy our time there. But I'm sure glad I don't have to worry about busted pipes or furnaces or painting or landscaping or any of the other obligations of ownership. Having one house of our own is hard enough.

 

[Meadbh]

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.

 

[NW-Bound]

We've had a vacation condo in Scottsdale, az for 15 years. 1682 miles from our far sw suburban Chicago home. At first, it was a monthly getaway, with only one trip during the summer. 9 round trip flights a year.

Now 2 trips a year- just a snowbird place now. Now we drive there instead of flying.

I don't think I would want a second home where I would be responsible for maintenance, but the condo is perfect for us - small, no maintenance, and relatively low cost. I never have regretted buying it.

My daughter's first home is a townhouse next to a large resort, and was built by the resort original developer. Hence, it has very nice surroundings, and one can walk to the resort for golf or to dine in its restaurants.

The upkeep is minimal, as the exterior is all maintained. The HOA fee is $300/month for a 1,000-sq.ft. home, which seems high but you never have to worry about exterior painting, roof leak, etc... In fact, the home insurance policy she has to get is about the same as that for renters, which only covers the home content. I suspect that many of the owners are snowbirds. Prices are about $150-175/sq.ft.

Adjacent to these town homes are larger homes from 1,700 sq.ft. to 4,000 sq.ft. These larger homes are more traditional, requiring the owners to maintain the exterior.

 

[imoldernu]

Regrets? I've had a few, but then again, too few to mention...

We lived between our campground home and Florida from 1990 to 2004, when we bought into our Liberty Village CCRC in Peru Il

Our Woodhaven Lakes campground home... 25 miles away in IL. Total annual costs including campground fees, utilities, insurance and taxes...
Less than $2500/yr.

Our Lake Griffin Harbor - Florida home. Total annual costs - lot rent, utilities, off season maintenance, taxes and basic utilities about $6500/yr. We'll sell after our kids use it while their new FL home is being built this summer.

Our current home in Peru...We'll keep our Woodhaven Lakes place for summer "vacation" trips... 35 minutes away.

Wouldn't trade the past 28 years of moving around for anything, but the trip to Florida and the prep work before coming and going has become too much to handle.

 

[Out of Steam]

We've never owned a vacation house, though wouldn't say we never will. I could imagine owning a city condo and a vacation house, but can't imaging staying in the workforce long enough to pay for both.

One thing I am certain of is that I wouldn't ever want to own two houses requiring exterior maintenance. One or the other would need to be a condo or something similar.

 

[RAE]

Our situation is somewhat similar to yours, only in reverse - we live in northern Michigan, but rent a house on the Gulf Coast during the winter to escape the long winters here. Everyone is different, but renting is clearly the best way to go for us. No maintenance on a second house, no insurance (including flood insurance), no property taxes, no worrying about the house being broken into when we are gone, etc, etc.. Plus, we can always decide to rent in a different location some day if we want to. We love the house we rent, and have rented it for 5 straight years now. We bring a lot of our own stuff with us, so the rental home is very comfortable to us while we are there, and almost seems like home. Anyway, renting works very well for us, and we have no plans to buy a house down south.

 

[Dash man]

We're snowbirds owning a condo in Florida right on the Atlantic coast north of two major cruise ports and couple hours drive both to another. We're finishing up our first winter season here and will head back to our PA home in a few weeks. A major remodel will be done while we're up north, so we'll be coming south to an almost new place next fall. We'll fly down to check the progress as it occurs. We've loved it this year with the beautiful ocean view and sounds of the ocean.

 

[Done]

We have owned a small mountain home for many years and initially enjoyed the adventure of visiting it on weekends. We have fond memories of the early days we spent there and the care we put into renovating. Over time, however, the maintenance became a burden and we slowly tapered off our trips. Each time we would visit, we would need to clean, rake leaves or shovel snow, exterminate, restock supplies, paint, repair, etc. We felt that we had become landlords to a mostly-vacant home. The upkeep, insurance and taxes cost thousands per year which I could no longer justify when I FIREd, so we decided to find a paying full-time tenant. Now we have a slightly positive cash flow after employing a local property manager, but if the opportunity arises, we will sell. Unless you're planning to relocate to the property later, I would recommend renting or using hotels or airbnb to allow for more variety and less commitment, leaving the work and expense of maintenance to someone else.

 

[Ronstar]

My daughter's first home is a townhouse next to a large resort, and was built by the resort original developer. Hence, it has very nice surroundings, and one can walk to the resort for golf or to dine in its restaurants.



The upkeep is minimal, as the exterior is all maintained. The HOA fee is $300/month for a 1,000-sq.ft. home, which seems high but you never have to worry about exterior painting, roof leak, etc... In fact, the home insurance policy she has to get is about the same as that for renters, which only covers the home content. I suspect that many of the owners are snowbirds. Prices are about $150-175/sq.ft.



Adjacent to these town homes are larger homes from 1,700 sq.ft. to 4,000 sq.ft. These larger homes are more traditional, requiring the owners to maintain the exterior.

Although I really like the condo/townhouse/HOA arrangement for its ease of maintenance, the uncertainty of future HOA fees is troubling. My HOA fees increase has far exceeded that of other expenses, going from $135 per month in 2002 to $290 per month in 2017.

But I accept it because there is no way I could handle yearly maintenance by being at the condo only during fall / winter.

 

[brucethebroker]

+1. We had a beautiful weekend home on the water for 23 years, mortgage paid off. But the kids stopped coming over the last few years and worrying about the pool, the house, fallen trees, etc took a lot of the fun out of the place. We sold it last year cutting out a $10K annual expense and infusing a $20K annual influx (using the standard SWR rate). Now we rent nice places at the beach for a few weeks in the summer and travel a bit more in the winter. We enjoyed it for most of the years we owned it and were relieved to leave it behind.

Sounds like you have a great plan going.........

 

[brucethebroker]

Although I really like the condo/townhouse/HOA arrangement for its ease of maintenance, the uncertainty of future HOA fees is troubling. My HOA fees increase has far exceeded that of other expenses, going from $135 per month in 2002 to $290 per month in 2017.

But I accept it because there is no way I could handle yearly maintenance by being at the condo only during fall / winter.

That is a valid consideration. We have found that two of the usual suspects towards high HOA fees are 24/7 security guards at gates and golf courses. Many golf course (mandatory memberships) communities have great deals on used condos, but the fees can be $600 to $1000 a month. If you find a nice neighborhood, with low fees (ask owners about it-they will tell you!) and a board dedicated to keeping fees low, it is a very affordable option.
BTW, if you have pass code controlled gates, and year round owners in your area of condos (keeping an eye on things), the security can be pretty good even without guards.

 

[NW-Bound]

Forgot to say, my daughter's townhouse HOA fee does not include any golf privilege at the nearby resort. There's also no 24-hr guard.

Come to think of it, the $3,600 annual HOA fee is kind of high. But then, I forgot to check to see what the RE tax is. It should be lower than normal, as the city does not maintain the roads through the subdivision, and they have to pave it themselves. They also have their own garbage collection, as the city dump truck does not drive through. Sewer/water/electric are provided by the city.

 

[Dash man]

Some people think our $1487/qtr HOA fees are high, but a 46 year old building on the beach takes maintenance to look as good as it does. The fees also pay for 24/7 security, water, sewer, Comcast cable including HBO, a fiber optic internet line owned by the association, so no fees after next August, a pool, direct beach access, and other amenities. The only downside is the residents continually vote for no reserves, so there are typically a couple thousand in assessments each year.

 

[NavAir]

We have had a second home (condo on the Beach) for the past 24 years. We love it. It is 750 miles away from our full-time home, but with over 100 trips in that time, we are used to the drive. There is the issue of expense, but we knew that going in. We have a good Management team, so there is minimal maintenance for me too do each time we are there (one or two Honey-dos). It is so much nicer showing up with nothing but the clothes on your back and being at home.

We did have one large casualty (Hurricane Ivan in 2004), which kept us out of the condo for almost 4 years!

Plus, the property has appreciated significantly in that time.

 

[Meadbh]

Some people think our $1487/qtr HOA fees are high, but a 46 year old building on the beach takes maintenance to look as good as it does. The fees also pay for 24/7 security, water, sewer, Comcast cable including HBO, a fiber optic internet line owned by the association, so no fees after next August, a pool, direct beach access, and other amenities. The only downside is the residents continually vote for no reserves, so there are typically a couple thousand in assessments each year.

I think that many people have no understanding of how condominiums work. They often think that really low condo fees are a bargain. Just because maintenance costs are shared doesn't mean they don't exist. Unrealistically low fees will either result in deterioration of the property, and/or a multitude of special assessments.

Here in BC there is a legal requirement that at least 25% of the annual operating budget be placed in the reserve fund. Also, every condominium complex with 5 or more units is now required to have a depreciation report done by a qualified professional (engineers usually) and updated every three years, unless voted down by 75% of the owners (which would make the condos almost impossible to sell). The depreciation report is key to getting a handle on likely future costs and in justifying realistic fee schedules. The condo board, in using the information in the depreciation report, can choose one of several funding models: minimal (not recommended as special assessments are inevitable); threshold (funding a certain percentage, eg 50% of expected long term expenses are in the reserve at all times); or fully funded (reserve funds are enough to pay for any and all predictable expenses, with no special assessments). The threshold model is the fairest to current and future owners.

My condo complex has built up a very healthy reserve fund while keeping fee increases close to inflation (10% increase in 7 years). We rigorously maintain all key building systems. Nevertheless, if everything went wrong at once (roofs, boilers, electrical systems) we might need a special assessment. Failing a catastrophe, we should be able to avoid special assessments. Owners are not complaining about fees.

 

[Ready]

My parents bought a condo near the beach in the late 90's for $120K. It was not in great shape and there were insufficient reserves to make needed repairs. To make matters worse, several owners were in default and stopped paying their HOA fees completely, and the remaining owners had to make up the difference.

Then came the 40 year mandatory Broward County inspection, which determined that unless major structural repairs were made, the unit would be declared uninhabitable. My parents were assessed a $52,000 special assessment to make up the repairs. They could not afford it, so they sold the place for $67,000.

I watched them live through this experience and promised myself I would never put myself in a situation like this. I know some condos are well maintained and funded, but you have to be very careful when buying a condo to protect yourself from a situation like this.

 

[NW-Bound]

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.

 

[ivinsfan]

I thought a lot of condo reserve underfunding had gone away with the tightening of some lending rules after the crash. My DSis was in an HOA with a lot of older owners who apparently didn't want to pay a dollar more in fees then they did 10 years ago.

One unit went up for sale and the lender flagged the property for the HOA being underfunded and wouldn't write the loan. The minute the owners heard they couldn't sell their units they were willing to pay the amount needed monthly. But without that huge stick it would have been a different story.