Vacation Homes

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Gekko
Posts: 3779
Joined: Fri May 11, 2007 5:00 pm
Location: USA

Vacation Homes

Post by Gekko » Thu May 22, 2008 7:25 am

Vacation homes. You visit a beautiful place, you're enchanted, and the next thing you know you're dreaming about owning a little cottage tucked in the woods or by the lake or near the beach. Snap out of it, honey. Owning two homes is more than twice the hassle of owning one. The second home will have to be maintained, repaired and insured just like your first, but it will be empty for long periods, so things can go terribly wrong when no one will notice (bursting pipes, rat infestations, termite damage, etc.).

And if it's not sitting empty, it's being (ab)used by strangers or by freeloading friends. Most likely, you'll start feeling obligated to spend time there so you feel like you're getting your money's worth, even when you or your family would rather be somewhere else. Let other people deal with the hassle and rent their vacation homes.

http://articles.moneycentral.msn.com/Sm ... rRent.aspx

djmbob
Posts: 333
Joined: Thu Mar 15, 2007 6:16 pm

I Have a Second Home

Post by djmbob » Thu May 22, 2008 8:28 am

Second home is in Lost River, WVa. It is awesome... built it to have "a place in the mountains" after being at the Pentagon on 9-11. When I first bought the land and built it, I spent about 90 days a year there (since it is a 2 hr trip from DC) on weekends, vacation days... absolutely loved it and needed the respite in the quiet, beautiful mountains to get away from the hot, hectic pace in the DC area. Loved it so much after the first 3 years that I bought another 40 ac nearby... might even build a new place adding all the things I wished I would have done when building the first home.

Enjoyed the heck out of it for 4 years, then Uncle Sam transferred me to TX about 3 years ago. I only got to the cabin about twice a year and have been totally bummed out, wondered about the investment, monthly costs (and yes had pipes crack one winter, but with the well pump turned off, no flooding). And yep, happy to have friends "freeload" cause they can check on it for me... and they ARE friends.

Now am being transferred back to the Pentagon in 3 weeks and am so excited I can hardly wait. My WVa place is so worth it, any fretting over costs (no mortgage) and wondering if I did the right thing, is all a fading memory now!!

Key factors: only 2 hour drive away (not an all day trip or flight), totally different world than that which I live in during the work week, no mortgage, not a ton of $$ invested, such a beautiful setting it lifts my soul!

On the other hand... timeshares... but guess that's another thread!

Cheers
Ray

bolt
Posts: 870
Joined: Wed May 30, 2007 7:19 pm
Location: Boston

Post by bolt » Thu May 22, 2008 9:17 am

Alot of Gekkos points in the articles and his view as well as mine being aligned with the OP are quite valid. However a 2hr ride away into a whole diffrent enviroment that you like must be GRRrrreat! Face it, most guys without families do not want to mow the lawn and maintain the 2 house's w/honey doos. Nesting is in womans genes like roaming the deserts and plains looking for womenz is in mens genes, :oops: Hunting cabins regulary have squatters in them. Second homes where its 6 months here and 6months and 1day there for residency not so much. Good Luck!

heyyou
Posts: 3198
Joined: Tue Feb 20, 2007 4:58 pm

Post by heyyou » Thu May 22, 2008 10:31 am

The most successful second homes that I've seen were relatively nearby, had enough land size and zoning for a second homesite after retirement, and had a suitable climate and altitude for retirement. I'm thinking of those who bought raw land 20 years before retirement, could easily drive there on Friday nights, had a plain cabin during working years, then built a nice retirement home (rent the cabin for income). That proximity helps with maintaining relationships later. Your long-time friends and children may still live in the urban area that you left.

High mountain or waterfront houses both require high maintenance. Think twice about how you want to spend your weekends. Your lungs or heart may force you from retirement living in the higher mountains of the West. My last mistake was 300 miles away so the Friday drive was too long, the hot climate made the home a winter-only site, and the high maintenance was not fun. Next, Hawaii looked good but we hadn't bought any real estate when the air tickets doubled. Now we would have to move there to justify the travel costs. The lesson is our current home in our small, tourist town is the right one, I'm just slow learning that lesson.

User avatar
Scarab
Posts: 18
Joined: Wed Dec 26, 2007 11:53 am
Location: Central Florida

Best purchase we ever made

Post by Scarab » Thu May 22, 2008 11:37 am

We reside in Florida - have for 50 years. Thirty-six years ago bought 7 acres in the mountains of NC. Built an inexpensive cabin there. As we were in education, went up every summer, Thanksgiving, Christmas and Easter vacations. After retirement, spent close to six months a year there and the other six months in FLA.

Sold NC place last summer only because at our age, it is becoming physically difficult to maintain two houses. Also, the 12 hour drive is a bit much.


It was well worth it over the years. To each his own.
:lol:

Scarab

Wagnerjb
Posts: 7203
Joined: Mon Feb 19, 2007 8:44 pm
Location: Houston, Texas

Post by Wagnerjb » Thu May 22, 2008 1:05 pm

We bought a vacation home a year ago, and I want to echo a few themes mentioned in several of the posts above.

1) Proximity is key. The condo is 3 hours from our main home, near a lake (just outside a decent sized city).

2) Upkeep is key. We had a "nightmare" last summer with pipes leaking and leaving an inch of water in the basement. My sister-in-law likes to use the condo occasionally, and we welcome her use - if for no other reason, she checks up on the place. If your vacation home is far enough away that you visit it infrequently, you need somebody (family, friend or neighbor) that can watch the place.

3) Difference is key. Our condo is near a lake and outside a city that is very different from where we live year-round. Without the differences, it wouldn't feel like a "vacation" to go to our condo for a long weekend.

Legal disclaimer so Diehards won't lecture us: you should only have a vacation home if you can afford one. It should not be viewed as an investment.

Best wishes.
Andy

User avatar
murfields
Posts: 147
Joined: Tue Feb 20, 2007 4:25 pm
Location: Surprise, AZ

Post by murfields » Thu May 22, 2008 1:33 pm

Paradise for us is two homes two hour apart and an easy drive. Winter in Sun City Grand, Arizona with all it's desert beauty and sunshine and warm weather every day. Activities galore and wonderful senior neighbors mostly winner residents. Wonderful medical care including Mayo Clinic. Only problem is June arrives and you now have temperature ranging from 100 to 115. So at end of May we head to Prescott, 110 miles away--door to door. the weather is on the average 18 to 22 degree cooler during the day and 30 to 34 at nights than Sun City Grand. Both home are behind gates with protective neighbors which is an important addition. During the summer we make two trips a months to Sun City Grand to pick up mail, check the home and have an occasional medical appointment. During the winter we make one trip per month to Prescott for checking the home and wife's monthly visit to the hair dresser. The drive is short and very pleasant: elevation goes from 2000 ft to 6000ft and is near and in the Prescott National Forest.

Our life style and two homes is not for everyone, but for us it gives us the option to have the best weather for winter and summer.

Murfield
"Nobody wants to have in his cash holdings a definite number of pieces of money; he wants to keep a cash holdings of a definite amount of purchasing power"

Glenn
Posts: 120
Joined: Mon Feb 19, 2007 6:06 pm

Post by Glenn » Thu May 22, 2008 1:52 pm

My two homes are about 2:45 hours apart. One is near my soon-to-be-ended employment in the Valley of the Sweltering Sun (Tempe, AZ). The other is 6,000 feet higher in the mountains of northern Arizona. We bought it years ago when the kids were little and used it as a summer retreat, with wife and kids there all summer and me coming up periodically to chill out. Best investment I ever made. (Originally, I didn't view it as an investment, but it is now worth 2.5 - 3 times what I bought it for 10 years ago - despite the slump in real estate values.)

It has come with its share of problems, of course, including frozen pipes, kamikaze squirrels electrocuting themselves and shutting the power off, skunks under the porch, a flash flood, lightning strikes, elk bringing down the fence. The problems, however, only negate about 5% of the positives.

User avatar
gunn_show
Posts: 1473
Joined: Wed Jun 06, 2007 3:02 pm

Post by gunn_show » Thu May 22, 2008 2:14 pm

Glenn wrote: It has come with its share of problems, of course, including frozen pipes, kamikaze squirrels electrocuting themselves and shutting the power off, skunks under the porch, a flash flood, lightning strikes, elk bringing down the fence. The problems, however, only negate about 5% of the positives.
thanks for the LOL chuckle Glenn
"The best life hack of all is to just put the work in and never give up." Bas Rutten

georgepds
Posts: 105
Joined: Tue Feb 27, 2007 11:59 am

Post by georgepds » Thu May 22, 2008 2:49 pm

My two houses are 60 miles apart.. My vacation home, which was my principal residence , is on a barrier island just off the north Atlantic. I use it as a summer home now and its great. There are no gates, but I know the full time neighbors well, and they keep me informed. I'd miss it if i did not keep it

That said, when I retire it will be to the beach house. There is no cottage in Tuscany or the Costa del Sol in my future , mostly for the reasons the OP mentioned. I will however rent in places I always wanted to see or see again ( Paris, London, Rome, Buenos Aires here I come)

tjwolf
Posts: 34
Joined: Mon Feb 26, 2007 2:28 pm
Location: Minnesota

Post by tjwolf » Fri May 23, 2008 10:15 am

Second home turns out to be a 36' 5 th wheel trailer w/screened deck, on Minnesota lake. We were going to build a house but with property taxes rising dramatically every year, decided to go the trailer route. Have now been doing this for about 15 years. Very little maintenance, low taxes since it is taxed as a motor vehicle, etc. One draw-back though, is the is the lack of appreciation

We have all of the built-ins of a modern home without all of the upkeep of a full size house. We winterize and close up in the fall, sometimes go to a rented condo in Arizona, other times stay on the farm.

First home is on a farm 62 miles from the lake property. Very private, with over a 1/2 mile driveway. Have to escape the lake on most weekends due to jet skis and hi-powered boats. The lake property sits on a point with a sheltered bay on one side. Retired, so can enjoy the lake during the week.
Tom

superlight
Posts: 1292
Joined: Mon Mar 31, 2008 9:26 am

Post by superlight » Fri May 23, 2008 10:50 am

I think in SoCal we have fewer options for short-drive vacation homes. The areas where my granddad had his cabin (crestline), and my dad had his cabin (wrightwood), have become like extended suburbs, with commuters heading down the mountain.

It's a long stretch to Mammoth but I think that might be the kind of place I look ...
"Simplicity is the ultimate sophistication."

User avatar
Robinhood
Posts: 165
Joined: Mon Jan 28, 2008 12:37 pm
Location: Boston, MA

Post by Robinhood » Fri May 23, 2008 12:55 pm

The attraction of a weekend retreat may decrease substantially with the increased cost of fuel. Many people are already trapped in long commutes to work and may be loath to extend the pain to their weekends. Better to buy a primary residence that can also be your weekend refuge.

Gekko
Posts: 3779
Joined: Fri May 11, 2007 5:00 pm
Location: USA

Post by Gekko » Fri May 23, 2008 1:03 pm

"In resort areas - given the number of days people actually use their second home - staying at the Ritz for $500 a night could be a much better deal. Do the math; it's not pretty." - http://www.moneyweek.com/file/10891/six ... -hell.html

"Many high-net-worth clients have one house too many, perhaps as a function of years of low interest rates. A couple with less than $5 million or $6 million should think twice about owning more than one house, given the costs associated with maintaining a home. These costs are often underestimated. Ideally, a couple should have around $10 million if they want to own two luxury properties and not house themselves into a corner. If you want three houses - a pied-a-terre in the city, a place in Florida, a flat in London - you should have a $20 million Number or greater." - Lee Eisenberg, "The Number"

sgt skidmark
Posts: 17
Joined: Mon Dec 31, 2007 2:27 pm
Location: Chicago IL

Re: Vacation Homes

Post by sgt skidmark » Fri May 23, 2008 1:28 pm

I've been fortunate enough to own a small saltbox summer home on nantucket for 8 years now. It was partially inherited and partially financed by me. Even though I am 1600 miles away, those 4 or 5 times I get out there for a min of 7 days is well worth it. Problems melt away as soon as I step off the ferry. I'm not sure I can put a price on that and what it brings to my state of health. Just amazing.

Had no such issues with flooding or burst pipes yet. The full time neighbors check on the house and let me know if anything is wrong.

Hopefully come retirement I'll be able to convince the family that this will be the permanent residence. The upside is if they quash this the value has skyrocketed that the "investment" is well worth it.

I think generalizing that 2nd homes are a bad idea is not quite accurate. There are many influences that make 2nd home ownership quite hassle free.

Just my $0.02
Tax/NoTax 65/35 | Stocks/Bonds/Cash 77/20/3 | Age/Horizon 37/40

Allan
Posts: 808
Joined: Wed Feb 21, 2007 9:15 pm
Location: Houston

Re: Vacation Homes

Post by Allan » Fri May 23, 2008 1:49 pm

sgt skidmark wrote:I've been fortunate enough to own a small saltbox summer home on nantucket for 8 years now.
I'm jealous. My wife and I are vacationing on Cape Cod (Chatham) and visited Nantucket this week for the first time. What an amazing place, just beautiful, not spoiled by development or tourism. If we could afford a 2nd home this area would be at the top of my list.

Sgt, let me know if you need a house sitter in the summer:).

Allan

ilovedogs
Posts: 191
Joined: Thu Sep 27, 2007 8:00 am

Post by ilovedogs » Sat May 24, 2008 7:16 am

My two homes are two hours apart. My office is in my first home.

I got a good deal on the second place when I bought it six months ago. I also said for the next 12 months I will cap my total expense at this place to $2895. I expect to be about $50 over. It was easy. Already well maintained, and curbed desires to make changes. Next year I will thin the trees. In five years I'll put on a metal roof. I'll sell it in 35 years.

I did not make this purchase to make money. One lesson I "took home" after a year of checking my balance at Vanguard, was I wanted to experience my money, not just count it on a computer screen. Ironically, I would have lost money if I had not bought the house.

Gekko, we see the world differently, dogs and vacation homes!

kate

bolt
Posts: 870
Joined: Wed May 30, 2007 7:19 pm
Location: Boston

Post by bolt » Sat May 24, 2008 9:14 am

I love Murfields plan. All in one free state AZ! Lucky Bastage! :lol:

johnjtaylorus
Posts: 620
Joined: Sun Apr 06, 2008 12:44 pm
Location: washington, dc

Post by johnjtaylorus » Tue May 27, 2008 2:31 pm

djmbob, I owned a weekend house in Highview for 20 yrs.

Used to park at Yellow Spring and run by the river.

Beautiful area.

Slapshot
Posts: 265
Joined: Fri Mar 02, 2007 12:26 pm
Location: SE Mass.

Post by Slapshot » Tue May 27, 2008 2:52 pm

This is not for everyone, but we own a quartershare at a resort hotel in a ski area about 3 hours away. Being retired, we can take advantage of the space available option weekdays and have access to a full kitchen unit just about anytime we want. During the winter we ski nearly every other week, and it is just as nice in the summer and fall and much less crowded. For about $1600/year condo fee we have all the amenities of a 5 star condo hotel. Our rental income most years covers most of our fees. Plus we put one week a year into RCI and will be spending next week in an oceanfront unit in Florida with it. No maintenace worries, no hassle. But the key is being to use it midweek. If we were restricted to weekends and school vacations, it wouldn't work nearly as well.
This time, like all times, is the best of times if we but know what to do with it.

stan1
Posts: 6094
Joined: Mon Oct 08, 2007 4:35 pm

Post by stan1 » Tue May 27, 2008 2:55 pm

superlight wrote:I think in SoCal we have fewer options for short-drive vacation homes. The areas where my granddad had his cabin (crestline), and my dad had his cabin (wrightwood), have become like extended suburbs, with commuters heading down the mountain.

It's a long stretch to Mammoth but I think that might be the kind of place I look ...
Agree there aren't a lot of choices in Southern CA these days. My grandparents had a "beach house" in Corona del Mar by Newport Beach when my Mom and her sisters were growing up (about 800 sq feet including the one car garage). The "beach house" has been sold, torn down, rebuilt, torn down again, and rebuilt again over the past 20 years since the family sold it.

Eastern Kern County in the Sierras (Tehachapi or Kernville) is about half the distance and both have standard services like medical care and grocery stores nearby and the roads are mostly good getting there. Also Kennedy Meadows but its a lot more remote. Mammoth is pretty pricey but perhaps worthwhile if you really enjoy skiing.

Post Reply