Vacation Home, Lake Place, How Much$

[SJhawkins]

Getting closer to calling it quits in my career. Still thinking of a lake place.

See here

Vacation home/cabin use?

Being in the land of 10,000 lakes we do have some beautiful areas to be in. My question revolves around what years did you really use it? We did not buy cabin in the early years, kids kept us busy between all the sports, band, church etc. We meet some great people in those years, lots of team...

www.early-retirement.org

Question for the group, how much would you pull from from the bucket for a cabin?

Stats
-Age 56
-Retire at 57
-Planning a Burn Rate $70k, current burn rate is closer to $50k with 2 kids ready to lauch.
-SS about $4,200/month at 70, not working past 56, did not include spouse, planning for worse case of one.
-Nugget is 2.5 million as of today.
-SS benefit at 70 is about what we spend today less heath insurance.

Worst case would need to sell the cabin if life happens. I could see enjoying this place for maybe 10 years and will be tired of it, with anyluck the kids will want it after that, a big maybe. In my mind planing for anything more than 10 years a big crap shoot.

Thoughts?

 

[Slim11]

Extra homes , even cabins are extra $$$. Taxes, heat, AC, or dewinterizing. Snow removal if needed. Plus 2x on the bug spray , cleaners etc. It can be fun, but its also expensive unless you live like your camping. But if you did that you wouldnt have bought a cabin. Is your home paid off? What is the nugget invested in?

 

[Koolau]

I think the main thing to keep in mind is that you need a Safe Withdrawal Rate from your remaining funds for living expenses. Only you can decide on the % but something in the 4% or less range is typical. I'd w*rk through that math and see what remains available to acquire a cabin.

Best luck and keep us posted.

 

[Dash man]

IMHO, second homes should only be bought if you’re debt free and purchased with cash.

 

[Koolau]

IMHO, second homes should only be bought if you’re debt free and purchased with cash.

While I agree, you can (under appropriate circumstances) convert other assets to get the cash.

 

[SJhawkins]

Extra homes , even cabins are extra $$$. Taxes, heat, AC, or dewinterizing. Snow removal if needed. Plus 2x on the bug spray , cleaners etc. It can be fun, but its also expensive unless you live like your camping. But if you did that you wouldnt have bought a cabin. Is your home paid off? What is the nugget invested in?

Home was paid of at age 39, no other loans after 39 for that matter.

No worries on heat, think one or two steps above camping that we still do enjoy.


The Nugget is invested in your typical 3 fund portfolio at 65/35 (equities/fixed) for the most part, on the struggle bus for the fixed income side, that's another didiscussion. Been at that ratio for the past 20+ years, not thinking of changing it.

 

[SJhawkins]

IMHO, second homes should only be bought if you’re debt free and purchased with cash.

That's the plan, pull X from the 2.5 nugget and live. If all goes south and need to liquidate for some unknown reason and end up $100k upside down for some reason don't think that will change much, my simple logic anyway.

 

[Gumby]

We are now in the lake house in Maine for our annual two week sojourn. This is the 25th year that we have rented the same house. It has been substantially less expensive and less problematic than owning it.

 

[Stormy Kromer]

OP, I had a second home near Ely, MN for 15 years. I loved it. So did the whole family. We paid $220k in 2010 and sold it for $398 in 2022. We lived there full time for 6 years after ER'd.

If you can afford it... do it and enjoy it.

Can I ask where you are looking ?

 

[SJhawkins]

I think the main thing to keep in mind is that you need a Safe Withdrawal Rate from your remaining funds for living expenses. Only you can decide on the % but something in the 4% or less range is typical. I'd w*rk through that math and see what remains available to acquire a cabin.

Best luck and keep us posted.

Current thinking is around 3.5% for the next 14 years (til age 70), 2% maybe after SS kicks in. 15 years is so far out in my mind it's gust a big WAG.

By my math that gives us around $300-$400k to plunk down. Part of me says that's way to much, on the other hand is the cash really gone? The place could be sold, may take half a year however.

See a few only lots, that is an option too, those can be had for $150k, that's an option too. Frankly the lot is much more important then the the cabin that may be on it.

We are project people, that's driving reason behind this, not everyone's cup of tea but we enjoy it. On a few acres currently that we find lots to futz with, might not be enough to futz with in retirement

 

[SJhawkins]

OP, I had a second home near Ely, MN for 15 years. I loved it. So did the whole family. We paid $220k in 2010 and sold it for $398 in 2022. We lived there full time for 6 years after ER'd.

If you can afford it... do it and enjoy it.

Can I ask where you are looking ?

Really like Park Rapids area but more likely west of the big water Mille Lacs to keep the drive under a hour and a half. We can get to the south side of Mille Lacs in about an hour, that's a possibility too.

I love Ely/Vermilion area, truly God's country, get that way every year at some point. The boundary waters is something everyone should experience at some point. Northern Minnesota is nothing like southern Minnesota, two different worlds.

 

[SJhawkins]

We are now in the lake house in Maine for our annual two week sojourn. This is the 25th year that we have rented the same house. It has been substantially less expensive and less problematic than owning it.

I get that too, we been renting the same place ever fall for the past same number of years, it's definitely easy. After about 5 days I'm looking for something to do, mow the lawn, fix the screen door.

 

[Stormy Kromer]

It would be nice to have a place as close as you describe, an hour or two. We had to drive 7 hours to our place near Ely. But, that is part of why it was special.

We had to sell it to move back to our farm in SW MN to take care of family and business a few years ago. Now we go to Ontario twice a year on fly in fishing trips to cure our itch for the north woods.

I wouldn't trade the time we spent at our place "up north" for anything.

If you can afford a vacation place where you describe without taking away from your necessary living expense, just do it. You'll get your money back and then some. You already know that there are expenses to a second home such as taxes, upkeep and utilities.

You can always sell it. Go and have fun!

When you're 90 you won't regret it.

 

[SJhawkins]

Stormy, thanks for the pics, that's exactly the type of place I'm thinking of, maybe not as nice.

 

[Koolau]

Stormy, thanks for the pics, that's exactly the type of place I'm thinking of, maybe not as nice.

Yeah, of course, I don't think of that as a "cabin" - maybe a cottage. Anyway, it looks very nice.

 

[Stormy Kromer]

Hi all, that was our cabin for 5 years and our only home for another 6 years. Loved it.

The only reason we sold it was due to family obligations back here on the farm in southern Minnesota.

I'm very glad we did it. Wouldn't change a thing. Nothing is forever, but don't let that stop you from doing it while you can.

 

[skyking1]

If those numbers work for you, then do it
Being a project guy myself I see the appeal. I am building our new house now.

 

[DrRoy]

I get that too, we been renting the same place ever fall for the past same number of years, it's definitely easy. After about 5 days I'm looking for something to do, mow the lawn, fix the screen door.

Hmm. It you are out of things to do after 5 days, I would question sinking the $ into buying a place. When I was a kid, our family had a cottage on a lake in Quebec. We would go up for 8 weeks in the later years, and I never lacked for something to do any day.

 

[YellowSubmarine]

Second home seems doable. I have a second home in FL, actually my main home now. One thing you must realize is maintenance, repairs. For instance, I was gone for seven weeks for an extended Easter stay in Ohio. When I returned, I had a fence down, weeding and landscape work, ice maker faulty and the Air conditioner was wet. Just yesterday, I found two light switches faulty. Money is one expense, and time for upkeep is another. I don't mind the work at 73; and my skill set covers those bases. But there're come a time...
btw...I enjoy both locations immensely; and it was a good decision for me in 2013.

 

[Koolau]

Second home seems doable. I have a second home in FL, actually my main home now. One thing you must realize is maintenance, repairs. For instance, I was gone for seven weeks for an extended Easter stay in Ohio. When I returned, I had a fence down, weeding and landscape work, ice maker faulty and the Air conditioner was wet. Just yesterday, I found two light switches faulty. Money is one expense, and time for upkeep is another. I don't mind the work at 73; and my skill set covers those bases. But there're come a time...
btw...I enjoy both locations immensely; and it was a good decision for me in 2013.

The older I get the less I'm willing to do maintenance. Call it lazy or getting old and I won't bat an eye. I don't think I'd ever again own a SFH.

 

[pjigar]

As someone said, buy a vacation home close to your primary home, you will likely use it more. Speaking of which: If you don't use the vacation home every other week then your "vacation trip" will be really a maintenance trip. Neighbor has a place 5 hours away and every time he visits is to cut the grass or fix this or fix that! You can hear the chore dread in his voice when he talks about a planned visit. Another friend has a hunting cabin 3 hours away which he visited once every quarter. Now he moved 6 hours away and may be he visits once a year if lucky.

It is best if you can move and BE at the vacation home full time eventually. We planned this when kids were young. We bought a place near a lake 30 minutes away (paid pretty penny). Now we live at the vacation home full time. I know this doesn't apply to OP but this if for the young dreamers.

 

[pjigar]

See a few only lots, that is an option too, those can be had for $150k, that's an option too. Frankly the lot is much more important then the the cabin that may be on it.

We are project people, that's driving reason behind this, not everyone's cup of tea but we enjoy it. On a few acres currently that we find lots to futz with, might not be enough to futz with in retirement

Buy a lot if you are a project person. Plan to live in an RV while you build. DW would not sign up living in an RV when I rebuilt the place so I did the next best thing: Built the inside of the house first and moved then I worked on the outside of the house (sidings, trim, hardscape, shops, garage, etc.).

Funny how project people work/think: I am still not finished building after 4 years of moving here. I am adding another room to the house and shop still has some pending items. I am already thinking of what kind of house I want to build next!

 

[FD1000]

We have never owned another home, boat, pool, or timeshare and will never own them.
Life is simple that way.
If I need to use the above, I just pay for it.
RV? never. I don't want to drive or own a bus.
We always travel by a regular vehicle and stay at hotels/motels and never at the same place. There is a big world out there to explore.

 

[street]

My advise is follow your dream!!! It is an investment and something you can enjoy.
It maybe not be the best advise for some but I wouldn't look at the financial side of it as a priority game changing decision.

Good Luck!

 

[SJhawkins]

Hmm. It you are out of things to do after 5 days, I would question sinking the $ into buying a place. When I was a kid, our family had a cottage on a lake in Quebec. We would go up for 8 weeks in the later years, and I never lacked for something to do any day.

I should say that after 5 days I want to start fixing whatever I find at the resort, they just don't look kindly at some guy walking around with his screw gun fixing popped deck screws.

Well know the resort Owners well enough that they may welcome the help