Am I crazy? Cabin advice

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Cheese
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Am I crazy? Cabin advice

Post by Cheese »

I’ll try my best to lay this out simply. Lately we have been contemplating a cabin purchase (approx 2 hours away) and I’d appreciate some perspective from the community.

Mid 30s. 3 small kids. Can work remotely.

COMPENSATION
Base: $250k
Bonus: $100k
Equity: $100k
TOTAL: $450k (for context, I’ve had a somewhat fast ramp in income over past few years ($175k, $200k, $250k, $450k over past four years)

BALANCE SHEET
retirement accts: $700k
Home value: $600k
Home loan: $300k (30 yr at 2.75%)
Cash: $100k
TOTAL: $1.1M

P&L:
PITI: $2k/mo
spending: $6k/mo
TOTAL: $8k/mo or $96k annually

QUESTION: am I crazy for thinking of buying a cabin that is $600k?

Would love to hear your perspective on time/memories spent at vacation homes and/or hidden/unforeseen costs or other downsides.

I would put 20% down and could get a 30yr at 2.75%.

Thank you so much.
livesoft
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Re: Am I crazy? Cabin advice

Post by livesoft »

I do think you are crazy unless you plan to rent it out for a significant fraction of the time and to cover all your maintenance, taxes, and mortgage.

We consider every year whether to buy the beach condo that we go to. And every year we think when we pack up and leave it, "Thank goodness we don't own such an albatross, but get to use it every year."

We have more than one friend who have had their cabin go up in flames. A friend's father died when he refused to leave his cabin.
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MarkerFM
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Re: Am I crazy? Cabin advice

Post by MarkerFM »

The downpayment appears to exceed the amount of cash you have on hand. How are you going to get the rest?
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Cheese
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Re: Am I crazy? Cabin advice

Post by Cheese »

livesoft wrote: Fri Aug 28, 2020 2:40 pm I do think you are crazy unless you plan to rent it out for a significant fraction of the time and to cover all your maintenance, taxes, and mortgage.

We consider every year whether to buy the beach condo that we go to. And every year we think when we pack up and leave it, "Thank goodness we don't own such an albatross, but get to use it every year."

We have more than one friend who have had their cabin go up in flames. A friend's father died when he refused to leave his cabin.
I do love renting other people’s vacation homes and dealing with zero of the maintenance etc. part of me is justifying as an investment and that we won’t lose money on this long-term but as this forum has taught me, there are many better investments than vacation real estate :D

I would consider renting it out but the season here is short so I’d then be in the rental business and not using it during prime season. Thanks livesoft - always appreciate your perspective.
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Cheese
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Re: Am I crazy? Cabin advice

Post by Cheese »

MarkerFM wrote: Fri Aug 28, 2020 2:44 pm The downpayment appears to exceed the amount of cash you have on hand. How are you going to get the rest?
I’d probably use $20k from my primary residence heloc. As I wrote that sentence that probably gives me my answer :shock:
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BolderBoy
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Re: Am I crazy? Cabin advice

Post by BolderBoy »

If you are not 100% financially independent now, I think this is a purchase that you'll ultimately regret.
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sailaway
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Re: Am I crazy? Cabin advice

Post by sailaway »

Reconsider when you have the down payment plus a good emergency fund in taxable, or maybe even later, when you are approaching FI.
mak1277
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Re: Am I crazy? Cabin advice

Post by mak1277 »

I'm currently looking, passively, for a 2nd home as well. My point of view is that I'm only going to buy something if I can realistically plan/expect to spend 75-100 nights a year in it. While that's a completely arbitrary number, I would never spend that much money on something I was only going to use sporadically.

Edit to add - I have no mortgage on my primary residence, would buy the 2nd house in cash, and the total of the two would still be less than 15% of my NW. I wouldn't feel comfortable going much higher than that.
surfstar
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Re: Am I crazy? Cabin advice

Post by surfstar »

If you're not currently crazy, a remote cabin can help you down that route.
Jack FFR1846
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Re: Am I crazy? Cabin advice

Post by Jack FFR1846 »

It really isn't an investment.....it's a money and time sink. The time you spend maintaining your current home is multiplied. If you're not renting it out, it's certainly a money sink. If you can rent instead, you'll save money doing that.

If you had said that you plan to spend 200 days a year there and can do all your work remotely from the cabin, then I'd ask why you'd keep your primary home.

More homes mean more cost and more work.
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JakeyLee
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Re: Am I crazy? Cabin advice

Post by JakeyLee »

I have a simple rule that I've held myself to for a few decades now: "Never carry more than one mortgage"... This has always helped me recover and navigate safely when the next catastrophe strikes.

Vacation homes and cabins can get tricky. Some folks convince themselves that it's a pure real estate investment play, as if they are buying a rental property. Next thing you know, you are using that logic to justify buying an expensive vacation property. It can be done. But at your recent increases in compensation, i see no reason you can't pay off your home in a 2-3 years, or just outright buy a cabin with cash. Meh, just a different perspective.
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Watty
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Re: Am I crazy? Cabin advice

Post by Watty »

Cheese wrote: Fri Aug 28, 2020 2:33 pm Would love to hear your perspective on time/memories spent at vacation homes and/or hidden/unforeseen costs or other downsides.
I have never owned a cabin like that but here are some things to consider that have come up in past threads.

You may not be able to get a good internet connection even if the provider say you should be able to.

If you want to use it a lot then also renting it is problematic. The problem is that you will likely want to use it during the very best rental weeks like holiday weekends.

Some home like that are designed for seasonal use and may not be insulated well enough to use in the winter. If there is any snow they may also be very difficult to get to.

Once your kids get older they will have school, activities, sports, etc and you may not be able to go up to the cabin as much.

Once the kids get to be 12 or so they may rather spend weekends with their friends instead of going to the cabin.

When things get back to normal you may want to take vacations elsewhere.

You will have twice the home maintenance. Finding someone like a contractor, handyman or plumber in a rural area can be very difficult. When you find one they may be able to be at the cabin at 9:00 AM on a Tuesday when you did not plan on being there. Even if you do some of the work yourself you may be a long way from a hardware store.

Cheese wrote: Fri Aug 28, 2020 2:33 pm BALANCE SHEET
retirement accts: $700k
Home value: $600k
Home loan: $300k (30 yr at 2.75%)
Cash: $100k
TOTAL: $1.1M
If you buy a $600K cabin then you will have about $1.2 million in real estate in the same general area. That is over 100% of your net worth. I would not feel comfortable with that.

In many housing markets cabins like that are selling like hotcakes because of the pandemic. Once the pandemic is over if there is a recession vacation homes may be very hard to sell and may drop sharply in value.
Am I crazy?
Crazy is too strong a word, maybe it is a half baked idea.

Try renting a cabin in that area to see how that goes. You could rent it by the day, week, month, season, or even sign a year lease on a cabin.
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WoodSpinner
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Re: Am I crazy? Cabin advice

Post by WoodSpinner »

OP,

How sure are you about the interest rate? 2.75%/30 year is fantastic for a second home — I haven’t seen anything close to that.

WoodSpinner
stan1
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Re: Am I crazy? Cabin advice

Post by stan1 »

I was not expecting a $600K cabin when I read the post title.

Since your kids are young they may not have a lot of activities yet. As they get older your afternoons, evenings and weekends will be sports, recitals, scouts, birthday parties, and other events that are important to them. You and your spouse will need a calendar to schedule the activities of three kids and will need to juggle getting them all to where they need to be until they are old enough to Uber themselves. There will be very few free weekends to take a trip. Rent a place to stay at whatever location you'd like to visit.
mak1277
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Re: Am I crazy? Cabin advice

Post by mak1277 »

stan1 wrote: Fri Aug 28, 2020 3:22 pm I was not expecting a $600K cabin when I read the post title.

Since your kids are young they may not have a lot of activities yet. As they get older your afternoons, evenings and weekends will be sports, recitals, scouts, birthday parties, and other events that are important to them. You and your spouse will need a calendar to schedule the activities of three kids and will need to juggle getting them all to where they need to be until they are old enough to Uber themselves. There will be very few free weekends to take a trip. Rent a place to stay at whatever location you'd like to visit.
I have a friend who told his kids they were not allowed to be in any activities that required weekend attendance. He did this so that he wouldn't have to sacrifice his time at his 2nd home, which he and the family went to almost 50 weekends a year. This strategy was successful and his (now adult) kids appear to still like him.
Kelrex
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Re: Am I crazy? Cabin advice

Post by Kelrex »

What is it that *you* think makes it worth this level of cost?

It's not really an investment. If you were to strictly look at it as an investment, using the savings you would get from not having to pay for a cabin rental and compare that against the cost, how does that look as a commercial real estate venture? Just how far are you deviating from the 1% rule?

That's fine, it's not an investment, but that alone doesn't make it a fundamentally bad thing to purchase.

-What would owning this cabin do for you that renting doesn't?
Are you the kind of person who is willing to pay a premium for "pride of ownership"?
Do you absolutely love home and property maintenance?
Would you really use it substantially more
Do you really want to spend all of your time off at one location for many years to come?

-Why this cabin?
Is there a reason you feel the need to buy a cabin that's as expensive as your main residence?
Is there something unique about this particular cabin that you've never seen at the hundreds of other cabins that you've been considering over the years? Perhaps a private tennis court? A unique water access??

-What about moving?
If you can work from home, then why not consider moving somewhere more cabin-like and spending all of your time there and doing occasional trips to the city, which has a year-round season?

-What's the opportunity cost?
What would you be giving up to do this?
Is this a better option than every single other option you could have for that level of expense?
Kelrex
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Re: Am I crazy? Cabin advice

Post by Kelrex »

oops double post
clown
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Re: Am I crazy? Cabin advice

Post by clown »

From my perspective, the cabin is not an "investment" asset -- it's a "lifestyle" asset. You buy it because it makes your heart feel good and because it makes family memories and may become a multigenerational family retreat. Not all assets are "investments;" think about clothes and cars, we buy them (knowing they are don't produce a cash flow or increase in market value) because they enhance our lifestyles.
misterjohnny
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Re: Am I crazy? Cabin advice

Post by misterjohnny »

I will share my experience. I am 55 and we bought a mountain cabin 2 hours away from us 9 years ago. Age of children at that time: 11, 9, 7.
Similar income, bought a $300k cabin. We chose not to rent it out because I didn't want the hassle. Wanted to be able to go up on a whim and not worry if it was rented. Looked at it not as an investment but as a cost, one that I was willing to pay for peace (we live in Los Angeles are so getting away from people is a great thing). Plus, I didn't want to have to keep all my stuff under lock and key. We offered it to family and friends for free, and they always gave us wine or a dining out gift card in appreciation.

I wish we would have bought it sooner. When the kids got into High School, we found there weren't many weekends we could go. When my middle child turned 16 he got a summer job so that took away summer weekends. You may find that you do not use it as much as you thought as the kids get older.

Fast forward to this year. I retired and bought a boat. Kids want to go up to the cabin since we have a boat. Can go midweek. Kids old enough to take care of themselves when they are home (1 in college, another leaving very soon).

If you are going to think of it as an investment, you need to rent it out. It is easier to do that today with AirBNB and other similar sites, along with technology to keep your cabin secure and renters happy (they can use it without any personal interaction from you).

If you don't want the hassle of renting it, it is a money sink hole. One that I am happy to fill. I wish I had rented it for the last three years though, I could have justified to my wife buying a better boat!

Edit to add: We still went on a lot of other vacations during the last 9 years, which made us feel a little guilty not using our cabin more. But we could afford it so what the heck.
DoubleComma
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Re: Am I crazy? Cabin advice

Post by DoubleComma »

WoodSpinner wrote: Fri Aug 28, 2020 3:21 pm OP,

How sure are you about the interest rate? 2.75%/30 year is fantastic for a second home — I haven’t seen anything close to that.

WoodSpinner
My second/vacation home (non-rental) is 78% LTV @ 2.625 for 30 Years. That was as recent Refi, at purchase it was 80 LTV 30 year FRM @ 3.75%. Each time that was the Par rate, no fees other than title and appraisal.
DoubleComma
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Re: Am I crazy? Cabin advice

Post by DoubleComma »

I don't think owning a second home is crazy at all.

It's not the normal belief around here, it certainly isn't the least expensive way to vacation in an area and there work involved with owning 2 homes.

We own a vacation home, its about 90 minutes from our primary home and up in the mountains. Outside the pandemic we use it probably 80 nights a year. This year we spent nearly 90% of our time at the vacation home from April through July. Never NEVER will I rent it out. I don't want other people in my home, using my things and sleeping in my bed. I've rented enough houses to see how they are cared for, even though our family is gentle on things, many other aren't. Vacation rentals get abused. Also, we don't want to pack when I use it, so there are plenty of clothes and staples on hand to simply get in the car and go. There is a local general store in the area where we can get perishables like milk, eggs, and limited produce...plenty for us.

On the rental topic, we have toyed with buying another as a rental. But it would be 100% rental, set up as such, furnished as such and zero personal attachment to it. I just have come to terms with being a landlord yet.

IMO, in your plan, what is crazy is starting with a $600k cabin.

We purchased our initial vacation home for $260k, sold and upgraded a couple time to the current which is worth mid-$500k. I share this because there are always lower cost homes/cabins/condos available...even in California vacation destinations. I live in California, MCOL area as compared to SF Bay Area or LA/OC, but still high on a national standard.
Last edited by DoubleComma on Fri Aug 28, 2020 5:59 pm, edited 1 time in total.
thatme
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Re: Am I crazy? Cabin advice

Post by thatme »

There are a lot of cabin threads on here, and all typically give the same kind of advice. The only thing I would add is consider something at a lower price point - it will significantly help balance out the legit negatives that everyone has raised.

We are currently building a cabin but doing it slowly and with cash. We bought the land last year, and hoped to put a small "bunkhouse" on the property this summer (12x16 or a bit larger). We managed to get a permit and electricity to the site, but no construction took place due to the pandemic and ongoing work obligations, so we decided to table it until next summer. Eventually we'll have a nice big cabin on the property (and the bunkhouse will transition to overflow housing). Definitely more rustic than you're talking about I'm sure, but I would think about what you might be able to do with no debt.

I like the "never more than one mortgage" rule someone posted above, makes a lot of sense.
Olemiss540
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Re: Am I crazy? Cabin advice

Post by Olemiss540 »

600k screams less "cabin" and more "lake front vaca home".

Cabin is a $150k log heated getaway with little maintenance required....
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retire2022
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Re: Am I crazy? Cabin advice

Post by retire2022 »

Cheese

You can buy a fixer upper or an existing house at a lower price point than you can afford.

I own 89 acres 3.5 hours upstate NYC, I brought it all cash, it took me 6 years to find it. I have 1.9 million portfolio and will rehab the house after I retire from my job.

here is my story:

viewtopic.php?p=4447032#p4447032

read these most recent threads

viewtopic.php?f=1&t=276265

viewtopic.php?f=11&t=321378
Kelrex
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Re: Am I crazy? Cabin advice

Post by Kelrex »

thatme wrote: Fri Aug 28, 2020 5:46 pm There are a lot of cabin threads on here, and all typically give the same kind of advice. The only thing I would add is consider something at a lower price point - it will significantly help balance out the legit negatives that everyone has raised.

We are currently building a cabin but doing it slowly and with cash. We bought the land last year, and hoped to put a small "bunkhouse" on the property this summer (12x16 or a bit larger). We managed to get a permit and electricity to the site, but no construction took place due to the pandemic and ongoing work obligations, so we decided to table it until next summer. Eventually we'll have a nice big cabin on the property (and the bunkhouse will transition to overflow housing). Definitely more rustic than you're talking about I'm sure, but I would think about what you might be able to do with no debt.

I like the "never more than one mortgage" rule someone posted above, makes a lot of sense.
I'm not sure I understand the "never more than one mortgage" concept. Wouldn't it matter more the total amount of mortgage and not so much the number of mortgages?
johnny_mac
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Re: Am I crazy? Cabin advice

Post by johnny_mac »

Timely question for me. Yesterday we closed escrow on the sale of our cabin we had for 15 years and today around noon the money hit our checking account.

Our story is similar to many others on this thread and to OP.
We bought our cabin in 2005 after we paid off our home mortgage. Kids were 12 and 10 years old.
We never wanted to rent it out because of the hassle factor and most of the time we would want to go up there (4th of July, Labor Day, Spring Break, Thanksgiving, etc.) would have been the likely times we would have been able to rent it. Plus we didn't want to work around anyone else's schedule.
It was wonderful - many, many happy memories. And for the first 10 years of our ownership (cabin was built in 1980) it was relatively maintenance free.
But the kids are graduated college and off on their own and DW and I realized we just weren't getting up there as much as we had been (every 3 months) and when we did go up it was 25% play and 75% maintenance work.
We also did a new calculation on how much the cabin was costing us and it was close to $1000/month with HOA, electricity, internet, water, prop taxes, etc. It needed a new paint job (estimated cost $8000) and the roof had probably 5 years left on it.
So last month we decided to sell. It is a super hot market right now and we listed on a Friday, got an above asking price offer on Saturday, and accepted the offer on a Sunday.

All the inspections revealed a bunch of things that needed to be fixed, so we ended up crediting buyers $5K for that work.

Bottom line is we were super happy to have it and I'm super happy to get rid of it. It served us well and was a great family spot. But now DW and I have the flexibility to go anywhere (at least when the pandemic cools off) and an extra $1000 in our pocket every month - you can stay in a lot of AirBNB's for that.
matti
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Re: Am I crazy? Cabin advice

Post by matti »

My wife and I bought a lake cabin two years ago and don't regret it at all. We love it! However, our situation is quite a bit different than yours. We gross $150k and have no kids. We live in a LCOL area, so our house is worth $135k (we owe about $50k on this mortgage) and the we bought the cabin for $161k. So, our total mortgage liability right now is $180k (which includes both properties).

$600k seems like a lot of money to me, but again, I'm in a much different situation than you. All I can say is that we really enjoy the cabin. Not sure if this is useful in any way. Best of lcuk.
Loon11
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Re: Am I crazy? Cabin advice

Post by Loon11 »

bought acreage in 08 and built a low cost cabin in 09 - large enough to be comfortable and private, near a great river. Don't regret it - but using it less as we age - only because its always a chore to pack up our cats, bring the food and anything else we want there including movies (no TV or internet there although my smartphone now has coverage there). We don't rent it out - don't want another rental property. Enjoy the place and the serenity but it is a bit of work. Only cost is electricity - actually cut off everything when we leave so not terrible. I suppose one day the hvac will die, water heater, well, and roof will go - then maybe it will be time but for now, we get there about once a month and its still quite enjoyable.
Ours is paid for-would not have built it if I needed a mortgage.
tibbitts
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Re: Am I crazy? Cabin advice

Post by tibbitts »

mak1277 wrote: Fri Aug 28, 2020 3:29 pm
stan1 wrote: Fri Aug 28, 2020 3:22 pm I was not expecting a $600K cabin when I read the post title.

Since your kids are young they may not have a lot of activities yet. As they get older your afternoons, evenings and weekends will be sports, recitals, scouts, birthday parties, and other events that are important to them. You and your spouse will need a calendar to schedule the activities of three kids and will need to juggle getting them all to where they need to be until they are old enough to Uber themselves. There will be very few free weekends to take a trip. Rent a place to stay at whatever location you'd like to visit.
I have a friend who told his kids they were not allowed to be in any activities that required weekend attendance. He did this so that he wouldn't have to sacrifice his time at his 2nd home, which he and the family went to almost 50 weekends a year. This strategy was successful and his (now adult) kids appear to still like him.
This was the case with my parents - although I didn't have other activities that were more important to me. That just wasn't something that was in the realm of my experience; for my parent the vacation and second-home use came first. Maybe it would have been different if I had excelled at some outside activity, but I never did. Whatever other activities I became involved in, there was no doubt as to how any conflict would be resolved.
ItzaHoot
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Re: Am I crazy? Cabin advice

Post by ItzaHoot »

Not truly parallel to you but perhaps how things can go.

1. have a nice home.
2. Bought a RV, used frequently initially and then tapered off.
3. Made a rock solid commitment to RV, and travel more. Traded in the old and bought a bigger/better new RV.
4. Tapered off again, finally sold it.
5. Now retired, getting the house ready to sell and move to...
6. Plan to rent for a year to see it the area is what we truly want before buying again.

Final analysis, if you're honest with yourself, consider the following:
A. What is the sum of the annual payments, plus taxes, insurance, and maintenance/upkeep?
B. Would it be cheaper to short term rent (like for a week or two at a time) over the course of each year vs. the yearly outlay in (A.)?
C. Property security when you're not there.
D. Do you really want to add to your "existing mortgage" via a HELOC to buy this property.

A lot of people buy timeshares and spend the rest of their life trying to unload them. I know of exactly one person that is happy with his.
iamblessed
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Re: Am I crazy? Cabin advice

Post by iamblessed »

I don't think you are crazy. I think it is to soon. It is about half of what you are worth. You have a great income. I would save starting today then do it with cash.
novemberrain
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Re: Am I crazy? Cabin advice

Post by novemberrain »

I was thinking about a mountainside cabin. I live in Bay Area .Then the wildfires hit in the last few weeks and I see that a good majority of the fires are on the mountainside.
Now I am thinking whether it is worth the risk.
Bobby206
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Re: Am I crazy? Cabin advice

Post by Bobby206 »

On the one hand the costs will always be more than you anticipate. Think of your own house and how much more it costs. Fridge breaks, new HVAC, sprinklers break, utility bill went up for some unknown reason, etc, etc, etc.... So plan that it will cost more.

On the other hand your kids are young and if you see yourselves frequently traveling to the same place then it could be a place you truly set memories. There isn't a price for that.

We opted against buying a place partly due to the economics and partly because we prefer going to new places. However, have many friends that go their cabin once or twice a month and love it.

Also, once kids start soccer, ballet, etc... there is something every Saturday and I mean EVERY!

Good luck!
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Cheese
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Re: Am I crazy? Cabin advice

Post by Cheese »

Boy I love this forum.

Nowhere else (at least that I’m aware of) could I post a question seeking advice and receive 30+ well thought out responses in less than 24 hours. Your thought provoking questions, perspective and advice are eye opening. thank you so much.

I am not going to pursue this cabin. Too much, too far away, and too soon.

For those interested, we plan to rent cabins at various lakes over the coming years while saving aggressively to achieve the following. 1. Understand which lake we’d like to be on. 2. Have a substantial cash balance to pay for most (if not all) of cabin. 3. Set my expectations more in line with reality and not buy a cabin that is worth what our primary residence is. 4. Understand if we even want a cabin or just continue to rent for a few weeks a year with zero maintenance, tax, hassle, etc.

I am so grateful to each of you for your perspective and advice. Thank you!
SC Anteater
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Re: Am I crazy? Cabin advice

Post by SC Anteater »

mak1277 wrote: Fri Aug 28, 2020 3:29 pm
stan1 wrote: Fri Aug 28, 2020 3:22 pm I was not expecting a $600K cabin when I read the post title.

Since your kids are young they may not have a lot of activities yet. As they get older your afternoons, evenings and weekends will be sports, recitals, scouts, birthday parties, and other events that are important to them. You and your spouse will need a calendar to schedule the activities of three kids and will need to juggle getting them all to where they need to be until they are old enough to Uber themselves. There will be very few free weekends to take a trip. Rent a place to stay at whatever location you'd like to visit.
I have a friend who told his kids they were not allowed to be in any activities that required weekend attendance. He did this so that he wouldn't have to sacrifice his time at his 2nd home, which he and the family went to almost 50 weekends a year. This strategy was successful and his (now adult) kids appear to still like him.
We purposefully didn't sign our kids up for soccer because it was a fall sport and it would conflict with our college football season tickets (and no little league because it started too early and cut into ski season). My kids seem to have turned out ok.
jello_nailer
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Re: Am I crazy? Cabin advice

Post by jello_nailer »

Swiss -
Off subject:
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TimeTheMarket
Posts: 166
Joined: Fri Jan 25, 2019 8:49 am

Re: Am I crazy? Cabin advice

Post by TimeTheMarket »

You're well on your way to that cabin, but you're not there quite yet.
Username is not serious :)
Savvy
Posts: 276
Joined: Sat May 05, 2012 3:09 pm

Re: Am I crazy? Cabin advice

Post by Savvy »

Many areas have timeshare options. My family owns 1/5th of a cabin, so about 1 week per month. Find something like that. No maintenance, no fuss.

Do not buy your own!
psy1
Posts: 192
Joined: Thu Jan 31, 2019 1:40 am

Re: Am I crazy? Cabin advice

Post by psy1 »

Imagine those 3 small kids all going to full pay private schools that now cost ~$70K per year. The entire cost of the cabin ($600K) would not even cover college at today's prices. I would pass.
retire2022
Posts: 1515
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Am I crazy? Cabin advice

Post by retire2022 »

Actually if op is close to national forest it is cheaper to drive there and camp out.

best
sean.mcgrath
Posts: 513
Joined: Thu Dec 29, 2016 6:15 am
Location: US in NL

Re: Am I crazy? Cabin advice

Post by sean.mcgrath »

Cheese wrote: Sat Aug 29, 2020 2:16 pm Boy I love this forum.

Nowhere else (at least that I’m aware of) could I post a question seeking advice and receive 30+ well thought out responses in less than 24 hours. Your thought provoking questions, perspective and advice are eye opening. thank you so much.

I am not going to pursue this cabin. Too much, too far away, and too soon.

For those interested, we plan to rent cabins at various lakes over the coming years while saving aggressively to achieve the following. 1. Understand which lake we’d like to be on. 2. Have a substantial cash balance to pay for most (if not all) of cabin. 3. Set my expectations more in line with reality and not buy a cabin that is worth what our primary residence is. 4. Understand if we even want a cabin or just continue to rent for a few weeks a year with zero maintenance, tax, hassle, etc.

I am so grateful to each of you for your perspective and advice. Thank you!
Fwiw, I think this is the right decision. We rented for a number of years, and when the time was right we pounced and paid cash. No regrets, we learned a lot about what we wanted while renting (and had great vacations), and the purchase was a fantastic move.
Nowizard
Posts: 3012
Joined: Tue Oct 23, 2007 5:33 pm

Re: Am I crazy? Cabin advice

Post by Nowizard »

Not crazy but perhaps a little premature for one in that cost range. In our area that price would definitely purchase more than a "cabin" on a beautiful lake. Ours, for example was 10 years old, fronted on a 25,000 acre lake with an acre and cost $285,000. The drive was three hours which got old. Two is more reasonable. We did not want to rent it out but had opportunities to do so. A key factor is to take a close look at how long they stay on the market. In our area, there are a number of them, and they may be significantly overpriced initially in terms of selling price while theoretically "worth" the realtor's suggested price. Find someone to look in on it, as you will want that at least every two weeks unless you are there often, including cold weather if snow hinders access. Ideally, there will be a nearby mix of part and full-timers.

Tim
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Ralph Furley
Posts: 74
Joined: Fri Nov 29, 2019 10:42 am

Re: Am I crazy? Cabin advice

Post by Ralph Furley »

Large jumps in income often create new desires for toys and things. Personally, I would settle into your new income level for sometime. I would build my asset column larger, shrink my liability column. Revisit in a couple of years when the market has likely cooled a bit and you're in a better position.

One thing you can definitely do: set aside a substantial budget for VRBO / Airbnb in that area and see how you like driving up there two or three times per month. Take a cabin for a test drive.
Xrayman69
Posts: 595
Joined: Fri Jun 01, 2018 8:52 pm

Re: Am I crazy? Cabin advice

Post by Xrayman69 »

Cheese wrote: Sat Aug 29, 2020 2:16 pm Boy I love this forum.

Nowhere else (at least that I’m aware of) could I post a question seeking advice and receive 30+ well thought out responses in less than 24 hours. Your thought provoking questions, perspective and advice are eye opening. thank you so much.

I am not going to pursue this cabin. Too much, too far away, and too soon.

For those interested, we plan to rent cabins at various lakes over the coming years while saving aggressively to achieve the following. 1. Understand which lake we’d like to be on. 2. Have a substantial cash balance to pay for most (if not all) of cabin. 3. Set my expectations more in line with reality and not buy a cabin that is worth what our primary residence is. 4. Understand if we even want a cabin or just continue to rent for a few weeks a year with zero maintenance, tax, hassle, etc.

I am so grateful to each of you for your perspective and advice. Thank you!
Good and comfortable decision to hold off.

I would have said that you have the means and resources but it would reduce margin for error and thus risk at this point. I would fully understand and encourage in a few more years when your savings and retirement make the debt and contribution to net wealth of the cabin is reduced.

Make sure that your employment is very very stable given the location of cabin is approximated to your job. If you moved your job would the cabin still be as readily accessible.
mak1277
Posts: 1562
Joined: Fri Jan 09, 2015 4:26 pm

Re: Am I crazy? Cabin advice

Post by mak1277 »

retire2022 wrote: Sat Aug 29, 2020 8:41 pm Actually if op is close to national forest it is cheaper to drive there and camp out.

best
This is great, but if I subscribed to this theory I'd never see my spouse. Not everyone wants to sleep on the ground.
retire2022
Posts: 1515
Joined: Tue Oct 02, 2018 6:10 pm
Location: NYC

Re: Am I crazy? Cabin advice

Post by retire2022 »

mak1277 wrote: Sun Aug 30, 2020 10:06 am
retire2022 wrote: Sat Aug 29, 2020 8:41 pm Actually if op is close to national forest it is cheaper to drive there and camp out.

best
This is great, but if I subscribed to this theory I'd never see my spouse. Not everyone wants to sleep on the ground.
One could rent RV or buy an RV who said you had to sleep on the ground? Recreational Vehicles is still camping out.
KyleAAA
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Joined: Wed Jul 01, 2009 5:35 pm
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Re: Am I crazy? Cabin advice

Post by KyleAAA »

You could easily afford it without strain. Whether or not you would regret it is not a financial question.
thatme
Posts: 165
Joined: Wed Feb 18, 2015 12:54 pm

Re: Am I crazy? Cabin advice

Post by thatme »

mak1277 wrote: Sun Aug 30, 2020 10:06 am
retire2022 wrote: Sat Aug 29, 2020 8:41 pm Actually if op is close to national forest it is cheaper to drive there and camp out.

best
This is great, but if I subscribed to this theory I'd never see my spouse. Not everyone wants to sleep on the ground.

We did best of both worlds here - bought an inholding inside of a national forest! We're surrounded by millions of acres of forest, but inside a 40-acre "neighborhood" of private property with about 30 cabins. We have neighbors but we're still "out there" for sure.
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MrBobcat
Posts: 457
Joined: Fri Jan 11, 2019 5:19 pm

Re: Am I crazy? Cabin advice

Post by MrBobcat »

Think of how many days you could rent a cabin if you had $600k socked away and you wouldn't even have to go to the same one every time if you didn't want to.
Porter01
Posts: 22
Joined: Tue Feb 23, 2016 7:54 pm

Re: Am I crazy? Cabin advice

Post by Porter01 »

Built cabin 2004. 2.5 hours away. Surrounded by national forest. Go there most weekends. It’s different world every time. The beauty, peace and quiet really helps with dealing with work week.
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