Considering buying a lake house (pros and cons)

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Buster65
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Considering buying a lake house (pros and cons)

Post by Buster65 »

Hello:

My wife and I are considering buying a lakefront home that we intend to rebuild on. This is a big endeavor because it involves taking down an existing structure, laying a new foundation, designing and building a new home and re-landscaping. Likely will need an updated septic and water well system. All in this is probably a $1.7-$2.2M project. It represents about 20% of our invested assets. The plan would be to pay cash for everything and have no debt when complete. Upon completion we will have our primary home $1.5M, the lake home $2M and about $8M remaining in investible assets which we need to live on. I am retired and my wife is one to three years from retirement (both age 59). The homes will be about 3 hours away from each other so a little concerned about taking on a construction job while not living near the area. I am wondering if anyone has had a similar experience and can offer the pros and cons of a lake home or any 2nd home. We have two boys. One is across the country and the other is about a 5 hour drive to the proposed lake area house. Note I also through in some numbers because I am questioning if we can "afford" this given we use our assets to invest in which we live on and obviously removing $2M from that mix will reduce the amount of capital we have working for us. Appreciate any and all feedback.
supalong52
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Re: Considering buying a lake house (pros and cons)

Post by supalong52 »

Why not just buy a house you like, rather than one you have to tear down and rebuild?
Valuethinker
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Re: Considering buying a lake house (pros and cons)

Post by Valuethinker »

Buster65 wrote: Tue Oct 29, 2024 1:53 pm Hello:

My wife and I are considering buying a lakefront home that we intend to rebuild on. This is a big endeavor because it involves taking down an existing structure, laying a new foundation, designing and building a new home and re-landscaping. Likely will need an updated septic and water well system. All in this is probably a $1.7-$2.2M project. It represents about 20% of our invested assets. The plan would be to pay cash for everything and have no debt when complete. Upon completion we will have our primary home $1.5M, the lake home $2M and about $8M remaining in investible assets which we need to live on. I am retired and my wife is one to three years from retirement (both age 59). The homes will be about 3 hours away from each other so a little concerned about taking on a construction job while not living near the area. I am wondering if anyone has had a similar experience and can offer the pros and cons of a lake home or any 2nd home. We have two boys. One is across the country and the other is about a 5 hour drive to the proposed lake area house. Note I also through in some numbers because I am questioning if we can "afford" this given we use our assets to invest in which we live on and obviously removing $2M from that mix will reduce the amount of capital we have working for us. Appreciate any and all feedback.
1. Unless you have a very expensive lifestyle, there's no question you can afford this (have you factored in capital gains taxes on selling investments to do this?)

3% of $8m is $240k (pre tax) to live on. Plus presumably Social Security at some point? That's more than most working people are on. It buys a pretty good lifestyle (and based on your principal residence value, you don't sound like the sorts who live it up).

2. Should you do this is harder. I would try to rent a property on that lake for a year, ideally, before doing it. How much do you use it? How much of a problem is the traffic?

Managing a construction job when you are several hours away is not to be minimized. Good news is your contractor can show you a lot via internet, these days. Bad news is you are not there, and when you are there will be weekends and holidays when contractor may be offsite.

It can be a great place for the family - and any grandchildren - to get together. A place of memories. But it's another burden, and if that's not likely you may find the "pull" isn't as great.

A lot of people do this and it's great in your early 60s - but would you rather spend the time and money travelling? Seeing and staying in different places? However as you get into your 70s it can become more of a burden. And when you are not there, there's always something to worry about.

My aunt owned a farm, and a cottage, and they sold the house in the city and bought a condo. In the end, they found they didn't use the condo. Lived at the farm and in the summer at the cottage by the lake (it wasn't winterized). About 90 minutes apart if they avoided weekend traffic. Did them well for retirement for 3 decades from their mid 50s. But it was a lot of upkeep and things to look after.
SkinnyFats
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Re: Considering buying a lake house (pros and cons)

Post by SkinnyFats »

I posted this a while back....

I bought a lake house back in 2001.

It’s about 1.5 hours from home, so not too far.
We’ve got the boats, jet skis, etc etc.

The first 6-8 years we were there constantly. Spent all day every summer weekend at the dock. Had company constantly. Good times.

Like all things, the “new’ eventually wears off.

We still go most weekends. But now it’s usually just me and my wife. Company occasionally. The boats seldom get used. Mostly we float around and play with the dogs.

A lot of time we go because we feel obligated, or need to check on the place. It’s not always where we’d rather spend the weekend, but we go anyway.

Also, it’s one more thing to worry about. Right now hurricane Helene is coming through. I’m at home, so I’ll know what happened here. Saturday I’ll go up to the lake to check on everything there.

The things that never change, though, are the work and the bills. There’s always something that needs fixing. Repairs, maintenance, etc. Replace the deck. Replace the roof. Replace the siding. Repair the boats. Pay the property taxes. Pay the utility bills. Pay the insurance. Pay the contractor. Pay. Pay. Pay.

It hasn’t bugged me enough to just sell it (and my wife loves it up there). But when it’s gone, I’ll never own two houses again. One is plenty of work all by itself.
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TomatoTomahto
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Re: Considering buying a lake house (pros and cons)

Post by TomatoTomahto »

When my wife floats this kind of idea, I tell her that’s what they make hotels and resorts for.
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arcticpineapplecorp.
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Re: Considering buying a lake house (pros and cons)

Post by arcticpineapplecorp. »

mosquitoes?

think about whether you need to OWN this lifestyle or merely have ACCESS (from time to time?) to this lifestyle.
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familythriftmd
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Re: Considering buying a lake house (pros and cons)

Post by familythriftmd »

SkinnyFats wrote: Tue Oct 29, 2024 2:05 pm I posted this a while back....

I bought a lake house back in 2001.

It’s about 1.5 hours from home, so not too far.
We’ve got the boats, jet skis, etc etc.

The first 6-8 years we were there constantly. Spent all day every summer weekend at the dock. Had company constantly. Good times.

Like all things, the “new’ eventually wears off.

We still go most weekends. But now it’s usually just me and my wife. Company occasionally. The boats seldom get used. Mostly we float around and play with the dogs.

A lot of time we go because we feel obligated, or need to check on the place. It’s not always where we’d rather spend the weekend, but we go anyway.

Also, it’s one more thing to worry about. Right now hurricane Helene is coming through. I’m at home, so I’ll know what happened here. Saturday I’ll go up to the lake to check on everything there.

The things that never change, though, are the work and the bills. There’s always something that needs fixing. Repairs, maintenance, etc. Replace the deck. Replace the roof. Replace the siding. Repair the boats. Pay the property taxes. Pay the utility bills. Pay the insurance. Pay the contractor. Pay. Pay. Pay.

It hasn’t bugged me enough to just sell it (and my wife loves it up there). But when it’s gone, I’ll never own two houses again. One is plenty of work all by itself.
Wow lots of good points there! Especially feeling like you HAVE to go there when you'd rather do something else, as well as paying contractors over and over again from a place that doesn't bring you so much joy any longer.
mjg
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Re: Considering buying a lake house (pros and cons)

Post by mjg »

Do what ever you want.

But in general, this board will say do not do it.

You are not leaving this world with your wealth / assets.

If you do it, you will not be putting your retirement at risk.

It's all a lifestyle question, and whether you are the type of person that would spend a lot of time at the second house, or prefer owning vs renting / leasing some place for a period of time.
J295
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Re: Considering buying a lake house (pros and cons)

Post by J295 »

Are you anticipating your kids/families enjoying the property?

In our case, when our kids were growing up our family time away from home was sports trips and vacations to new places; and once a year vacation with my parents and all siblings and kids/grandkids. Thus, we would not have had time to make much use of a second home.

Now — our kids are in their 30s with their own families and when we get together it’s often at their homes to accommodate their busy schedules. They live in different parts of the country and world.

I don’t like home maintenance, although others enjoy it so that’s also something to consider.

Ymmv. I have nothing against a second home when it’s a good fit. I’ve seen many good fits (and there has been some decent price appreciation too). It just isn’t my cup of tea.
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beernutz
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Re: Considering buying a lake house (pros and cons)

Post by beernutz »

Is there a chance the lake home will become your primary residence in the future with the current primary home going on the market?
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stan1
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Re: Considering buying a lake house (pros and cons)

Post by stan1 »

Do what you want to enjoy your successes. $8M with a home you can sell is fine.

However: what is the elevation of the house pad compared to the height of the dam or outflow from the lake? Who is responsible for the dam or outflow maintenance? Federal, state, local, HOA, private? If there is a 1000 year flood what is your best prediction of what would happen? If there is a 1000 year drought how would your lifestyle be hindered? Access roads if there are a lot of creeks that could flood? Basically we all have to assume that Milton could happen again. Fire insurance if it is in a forest, and when (not if) there is a large fire would you still want to live there?

The joys can still be had, but the black swan events of flood and fire are getting more likely and impactful. Sorry to be the realist, but at least think about these things. Since you have $8M left you'll still be fine if you have to take an uninsured loss one time if you really value the quality of life you hope to achieve.
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praxis
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Re: Considering buying a lake house (pros and cons)

Post by praxis »

I retired in 2005 and we bought a lot in the Colorado mountains and built a cabin with another couple. Our home is 18 hours drive from the cabin. We had a great contractor and, being retired, I drove there every month during construction to meet with him and buy fixtures, furniture, make color decisions, etc. My wife retired in 2011 and we have spent every summer at the cabin. Our two boys and their families come rarely. They have their lives to live and it's far from them. We have a steady stream of friends that pass through for a few days. Wife loves to raise wildflowers in our gardens and we do almost all the maintenance ourselves. We leave the furnace on each winter and drain the pipes. Before building, we discussed whether it would limit other trips for us and agreed we could do both. That's proven to be true for each year we've had the cabin. We drive there in late May and drive home in early October. We have enjoyed one or two international trips per year for a few weeks each time and we travel back to the cabin in the winter to ski and like to dive in the Caribbean every winter. It hasn't hampered our travel. We compromised by inviting that other couple to partner with us and they gave input on the design and enjoy visiting for a week or two each year but live in Florida, so they do not use the cabin as much as we do. We enjoy their company, but often take trips when they bring family/friends so they can use the whole place. It's a big cabin. Four BR, 4 1/2 BA so we all have a space when it's full. We discuss when to sell (I'm 75, DW is 70) and we believe if we do, rather than buy us out, our co-owners will just cash out with us. So far, we love living in both our places, have ample friendships here and there, are not burdened by cleaning and maintaining both places. We are both fit enough to hike most days and fish and kayak the rivers nearby, so for now, we are happy we have the cabin and our modest home too. I believe it would be fairly easy to sell your lake home if you lose interest or energy for it. Life is short. Enjoy your dream. It sounds like you can afford it easily.
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Re: Considering buying a lake house (pros and cons)

Post by WhyNotUs »

If you can live on a SWR and SS/pension, then you can afford it.

Why do you want to do this? What is your core motivation?

Pro: "Permanent" get away spot, potential for family gatherings, potential appreciation, if you are bored it is a big project to keep you engaged

Con: Removal and rebuilding surprises/hassles/cost overruns, more driving, ongoing maintenance of two properties, taxes/insurance/furnishings x 2, feeling that you need to go there even if you are not feeling it

There are lots of rental homes on lakes that can be rented for a season/month/weeks with none of the downsides. Let's say your $2M remains invested and earns 5%. What will $100k minus taxes get you in a rental on a lake?
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Stinky
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Re: Considering buying a lake house (pros and cons)

Post by Stinky »

Are you “lake people”?

Have you spent enough time at the lake (or any lake) so that you’re sure you want to make such a large commitment?

We were not “lake people” when we bought a lake house about 90 minutes away back in 2014. Our whole family initially enjoyed it - a lot. But as time went on, the “novelty” wore off, and we were going there only on the occasional weekend. So we sold the lake house in 2022.

In my view, you can afford it. No problem. And if you really want it, I’d say go ahead. (Consider buying an existing house rather than a new build).

But back to the original question - are you “lake people”?
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RickBoglehead
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Re: Considering buying a lake house (pros and cons)

Post by RickBoglehead »

We considered a lake house, relocating there, started looking and then Covid hit. Having inherited a lake cottage some years back that needed work and was the lowest property in the neighborhood, 80 miles away, we decided to never own 2 properties. Too much pressure / anxiety wondering what is happening there.

Our lake season is June - August, way too short to justify the expense. Boats are holes in the water surrounded by fiberglass into which you pour money.

We sold that cottage in late 2020. Explored southern lakes in 2019, 2021, 2022, then stopped. Prices went crazy. Infrastructure isn't comparable to where we live. Water is nice to look at, but not worth the cost in our opinion. A forum member sold his CA home, moved to the same area, and 3 or so years later sold.

We just replaced roof, HVAC, some large windows, deck, and painted the house. Sold the boat this past summer after 7 years, and our total cost was gas and insurance. Not doing the lake.
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123
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Re: Considering buying a lake house (pros and cons)

Post by 123 »

You can afford it but that's undoubtedly a 2+ year project with tear down, permits, and construction. That's doing without it for 2 of the best years of your life. That's two+ years of issues, hassles, frustration, and potential construction disputes. Just up your budget if needed and buy something you can utilize right away.

If you're planning to build something unique, think again. The more unique the more potential wasted money into aspects of the project that may not increase its resale value.

It might be worth doing a one year rental first to try the concept and area out. A three house drive can become a struggle as you age.
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retired early&luv it
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Re: Considering buying a lake house (pros and cons)

Post by retired early&luv it »

Is this far enough north that you will have to winterize it and heat in winter? Or south where you are less likely to have to worry about frozen pipes, frozen toilets, frozen other stuff? Cost to heat in winter?

Who will rake the leaves, at both homes? My parents built a lake place when I was a small child. My memory was that it was a place to go work every weekend in summer.

I was the executor of my mothers estate, had to sell it just as the financial crisis hit, took a couple years to sell it. None of us kids had any desire to keep it.

My dad was too cheap to hire a land surveyor before they built. Big mistake we discovered when I was the executor and i hired a land surveyor.

I am happy to do my vacations elsewhere, same with the rest of the family.

Have you considered trying to rent a lake place for a summer to see how much you would enjoy it?

Not sure if this would be in a forested area, but it likely is. Trees fall on lake cottages every day. Trees close to a cabin make fire danger greater if there is a forest fire. If you have a lot picked out, make sure you understand all the codes for septic and drainfield location, water well setback location, width of lot required to get building permit, etc. Will you have internet by satellite or something else?

If in a forested area, with global warming there may be greater risk of fires in the future. Will your roof and other construction be fire resistant.

Distance for shopping? Is it convenient or not? Same with restaurants, hardware stores, etc. If you are in a large city you may be surprised how little choice there is in small town grocery stores.
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Re: Considering buying a lake house (pros and cons)

Post by tibbitts »

supalong52 wrote: Tue Oct 29, 2024 1:57 pm Why not just buy a house you like, rather than one you have to tear down and rebuild?
It's not unusual for there to be no empty lots and no existing homes you'd want to live in for sale on a given lake. There is simply not that much available actual lakefront property.
123
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Re: Considering buying a lake house (pros and cons)

Post by 123 »

There are prior threads focused on lake houses, it comes up for time to time.To find them type "lake" (without quotes) in the google search box that normally is located in the top right corner of the page.
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Re: Considering buying a lake house (pros and cons)

Post by 123 »

retired early&luv it wrote: Tue Oct 29, 2024 4:17 pm ... If you are in a large city you may be surprised how little choice there is in small town grocery stores.
You may be lucky even to have a small town grocery store. In many areas a grocery store may be many miles distant.
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TravelforFun
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Re: Considering buying a lake house (pros and cons)

Post by TravelforFun »

SkinnyFats wrote: Tue Oct 29, 2024 2:05 pm I posted this a while back....

I bought a lake house back in 2001.

It’s about 1.5 hours from home, so not too far.
We’ve got the boats, jet skis, etc etc.

The first 6-8 years we were there constantly. Spent all day every summer weekend at the dock. Had company constantly. Good times.

Like all things, the “new’ eventually wears off.

We still go most weekends. But now it’s usually just me and my wife. Company occasionally. The boats seldom get used. Mostly we float around and play with the dogs.

A lot of time we go because we feel obligated, or need to check on the place. It’s not always where we’d rather spend the weekend, but we go anyway.

Also, it’s one more thing to worry about. Right now hurricane Helene is coming through. I’m at home, so I’ll know what happened here. Saturday I’ll go up to the lake to check on everything there.

The things that never change, though, are the work and the bills. There’s always something that needs fixing. Repairs, maintenance, etc. Replace the deck. Replace the roof. Replace the siding. Repair the boats. Pay the property taxes. Pay the utility bills. Pay the insurance. Pay the contractor. Pay. Pay. Pay.

It hasn’t bugged me enough to just sell it (and my wife loves it up there). But when it’s gone, I’ll never own two houses again. One is plenty of work all by itself.
I built my lake house and boat dock on the fourth biggest lake in Texas three years ago. We along with the kids, grandkids, and close friends have loved it immensely but of course we're only on Year 3. We look forward to going there (also 1.5 hour drive) by ourselves and enjoy the tranquility the lake offers. The house is new so there is not much that we have to maintain, and we can use lake water to irrigate our yard so that's great.

Our oldest son will take over the lake house as part of his inheritance when we can no longer take care of it.

Three years in, so far so good.

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lessismore22
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Re: Considering buying a lake house (pros and cons)

Post by lessismore22 »

Financially, you can. No doubt.

As another poster mentioned, a lot of the unwanted upkeep would be a non-issue for a newly built house.

It really comes down to how much you enjoy the lake. We are 8 years into owning ours and would do it all over again without hesitation.
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Re: Considering buying a lake house (pros and cons)

Post by bltn »

We finished building a water front home 15 years ago on a lot we acquired seven years before the construction. The second home is a four hour drive from our other home, We had a good contractor after we changed from the original contractor
.and and I only met with him every 4- 6 weeks. This project took place during a building boom in 2006-2007. The house was finished around 20 months after we started it.

This house , with taxes, hurricane insurance, and general waterfront maintenance has been rather expensive, but my wife has always been a beach person and we enjoy our time there. Since we got the beach home, we don t take vacations to other places. Prior to building this home, 90% of our vacations were to beach destinations. Now I m retired and we have our own beach destination among neighbors we like. We make six to eight two week trips a year. My daughter loves to visit our vacation home once or twice a year with her family. My son prefers visiting us at the house where he grew up.

My plan currently is to keep both houses to avoid capital gains taxes. We ll see how things work out.

We have some friends who sold a waterfront retirement home, and moved back to the area of a previous home. They lease a waterfront home in their old neighborhood for four months every year. I don t know how the expenses compare, but they don t have the maintenance headaches. That kind of arrangement might be attractive.
AnotherMike
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Re: Considering buying a lake house (pros and cons)

Post by AnotherMike »

Our lake home is about half the distance away and a quarter the cost — and we enjoy it!
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Buster65
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Re: Considering buying a lake house (pros and cons)

Post by Buster65 »

Really appreciate each and every comment, suggestion. There is obviously a lot to consider so this very much helps me think
about things. I am not rushing into anything and taking into consideration many things I've heard from various people. Heading
back up in a few weeks to look at some property and to make a decision or to not make a decision :)
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Watty
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Re: Considering buying a lake house (pros and cons)

Post by Watty »

Buster65 wrote: Tue Oct 29, 2024 1:53 pm Appreciate any and all feedback.
I have no background with anything like that but a few thoughts.

1) You can afford it even if (when ?) the construction goes way over budget. The financial worst case scenario should not impact you, only your heirs.

2) You are 59 now. With all the planning, construction, issues with being near water, and delays then you will be doing really good to get into the house in around two years and you may miss the summer season in 2026 so you may not really get to enjoy it much until the summer of 2027. You might be 61 or 62 before you get to move in the house.

It will be highly variable but realistically even if things go well you will be likely be slowing down a lot sometime in your 70s if you are even still alive then.

Unless you are real lucky you may not have a lot "good years" left and making a three hour drive to the house as you age will get harder.

If you want a lake house you should really just buy an existing lake house even if it is not your dream home, if the stars align just right you could even be in it by the end of the year.

If you buy an existing house you will also know that it is worth roughly what you paid for it. If you spend $2 million to build a house then when you are done you could end up with a house which is only worth $1.5 million. Carefully research just what the house will be worth when you are done.

3) Take a good hard look at the nearby houses. If they are similar to the house you are going to tear down then there is a risk you could get moved into your new lake house only to have the next door neighbor start tearing down and rebuilding their house too so you could be in a construction zone for a year or two after you move in. Also consider if the nearby house could be short term rentals where people may come up to party for a week.
Last edited by Watty on Tue Oct 29, 2024 10:03 pm, edited 2 times in total.
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Re: Considering buying a lake house (pros and cons)

Post by Jack FFR1846 »

Stop in to the town's building inspector. We live across from a lake (we are not lake people and don't really use it) and it is surrounded by lake houses from the turn of the century. These were built before zones or codes existed in the town. With some of the houses, if they wanted to do what you're proposing, they would not pass perc tests so would be denied any new building. Building inspectors would know about things like this in town and could likely tell you off the top of their head if you'd be ok with your plans or if you'd have to spend lots of money to make the lot buildable or if there's no chance to build.
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vested1
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Re: Considering buying a lake house (pros and cons)

Post by vested1 »

RickBoglehead wrote: Tue Oct 29, 2024 4:06 pm We considered a lake house, relocating there, started looking and then Covid hit. Having inherited a lake cottage some years back that needed work and was the lowest property in the neighborhood, 80 miles away, we decided to never own 2 properties. Too much pressure / anxiety wondering what is happening there.

Our lake season is June - August, way too short to justify the expense. Boats are holes in the water surrounded by fiberglass into which you pour money.

We sold that cottage in late 2020. Explored southern lakes in 2019, 2021, 2022, then stopped. Prices went crazy. Infrastructure isn't comparable to where we live. Water is nice to look at, but not worth the cost in our opinion. A forum member sold his CA home, moved to the same area, and 3 or so years later sold.

We just replaced roof, HVAC, some large windows, deck, and painted the house. Sold the boat this past summer after 7 years, and our total cost was gas and insurance. Not doing the lake.
I'll out myself as that "forum member". Hello Rick, it was nice meeting you and your wife at the lake. We had that house a little over 2 years, not 3, and it's risen in value since we sold it 3 years ago by about 300k. Still we made good money on it. It was 3 stories with one bedroom over the garage as the 3rd story, over 3,000 sq ft, 5 bed 3 bath, 30 years old now.

To the OP. In my opinion lake houses are best suited for young couples with small kids, which is who we sold our lake house to. My wife and I have always been adventurous and outdoors focused as campers, and kayak fishermen/women with our own kayaks. We had always wanted a lake house but couldn't afford one in California, but after selling our tiny rancher there we had more than enough to do so, and we dove in with both feet. We bought a new pontoon boat and a bass boat to go with our kayaks and canoes, and set about bringing the property and house up to snuff.

We remodeled the master bath and the walkout basement as well as replacing 600 sq ft of decking on our dock with composite. It was glorious, until we couldn't get anyone at any price to do work on the property. Contractors wouldn't show up, and when they did I had to redo their work. We lost 30 trees the first year due to microbursts. The 1.5 acres of yard with lots of sloped lawn needed constant attention, and the acre between the house and the lake needed the weeds knocked down 3 times a year when they got head high, 7 hours a pop.

We anticipated lots of visitors, and got a few, but our kids were grown with lives of their own. One group lived the closest at 5 hours away, with the others 2,500 miles away, then hours away in a rented car from the airport. At age 69, not only was the maintenance work challenging, but I kept hurting myself like falling down with a running chainsaw or getting stitches at emergency for cutting my arm on a sharp edge.

We miss the fishing, the boats, and feeding the turtles every morning. We miss the dock and the firepit down at the lakefront. We don't miss any of the rest of it. If we had been 40 years younger with young kids it would have been perfect. Fulfilling your dreams is a laudable pursuit, as long as it is tempered with reality. We now live in a smaller but nicer 4 year old single story 3x3 2,600 sq ft lake house on a different lake 1 hour from family, with an HOA that takes care of everything outside, which I would contend is "age appropriate". YMMV.

My question would be how many years will you have left being able to fully take advantage of an active lifestyle on a lake with all the personal maintenance that's involved, and will it be worth it? Only you can answer that question.
ymarkley
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Re: Considering buying a lake house (pros and cons)

Post by ymarkley »

We bought a second home on Lake Michigan back in 2013 (I was 44 at the time) and did an extensive renovation. Our primary residence is 3 hours away. Getting a contractor you can trust is key. My wife asked all the neighbors and the one they overwhelmingly recommended did a great job. We also spent a lot of time in the local hang outs. The local bar and breakfast place were the most fruitful for finding good plumbers, HVAC, etc....

Financially it makes no sense but it is our happy place. We built it to entertain and friends/family line up to visit. I get it is a financial boat anchor but it is hard to put a price on enjoying a great meal that I cooked in the kitchen that I created, on a second floor deck we designed, with a bunch of people we enjoy being with, as the sun sets over the big lake...
Tracyfaa
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Re: Considering buying a lake house (pros and cons)

Post by Tracyfaa »

I'll keep this short. I grew up on a small island on a lake. 11 houses, small town, walked to school, then took the bus from the JH to HS when that time came. I remember exploring many little used or abandoned cottages with my friends. Swimming. Skiing. Ice skating in the winter. Fishing.

We had everything we needed. We were NOT rich. It taught us the value of frugality, and to always appreciate what you have been given.

After college moved to the big city on the west coast, then back to the big city in the midwest. Retired now.

I would move back to that little place in a heartbeat if I could and if my wife would be on board.

Just do it.
Wanderingwheelz
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Re: Considering buying a lake house (pros and cons)

Post by Wanderingwheelz »

I think we’d definitely have a second home if there was anywhere we’d want to spend our time within a two or even three hour drive of where we live. That’s one of the drawbacks of living where suburbanites want to be on their free time. Maybe the jokes on us?

I say go for it if you are fortunate enough to find a place you want to spend time that’s not too far from home base. I’d love to have a second home someday, but flying too and from seems impractical.
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eri
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Re: Considering buying a lake house (pros and cons)

Post by eri »

Build a house and you’re making a commitment to an area. Try and visualize ahead 10-15 years to how the lake community might change. There’s an amazing amount of money floating around that can quickly take away an areas silence and privacy. There’s many special places I no longer visit because of over development but luckily I vote with my feet. I’d feel terrible if I’d built a dream home there.

My math says >7% is annual holding cost of a house, so 2M is 140k per year of expense and lost opportunity. Would you rather spend 4 months traveling the world and staying in $1000/night hotels? No gutters to clean and you wouldn’t need to get certified to do your septic reports…
Bogle Bobble Head
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Re: Considering buying a lake house (pros and cons)

Post by Bogle Bobble Head »

What is the purpose of the lake house? Is it a retirement home? My fil has a lake home, when he was planning their estate he asked my wife and I if we wanted it earmarked for us. We replied that we loved visiting them at their lake home but it wouldn't be a good fit for the two of us.
Buster65 wrote: Tue Oct 29, 2024 1:53 pm One is across the country and the other is about a 5 hour drive to the proposed lake area house.
I think there is an assumption that families will come visit more often than they are able. We visit them at the lake home one or two times a year & it's only a 4 hr drive for us. As our kids have grown up our weekends have more and more busy making it difficult to visit them there. We see them much more at their home. My fil says he spends about $15k/yr just having the place open & operating the home (it's already 100% owned by them). They use it nearly all summer so it's worth it for them. Having said all that, If it was me & I was his age, I would probably spend the $15k on family vacations with my adult children and grand children. To each their own, there is no right answer here.
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Watty
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Re: Considering buying a lake house (pros and cons)

Post by Watty »

One thing I forgot to mention is that if you do build the house then when you do move in your neighbors may not be very welcoming since your construction will have impacted their enjoyment of their house for a long period of time. If you build a large house on the lot it may also impact their views.
Valuethinker
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Re: Considering buying a lake house (pros and cons)

Post by Valuethinker »

Tracyfaa wrote: Wed Oct 30, 2024 8:28 am I'll keep this short. I grew up on a small island on a lake. 11 houses, small town, walked to school, then took the bus from the JH to HS when that time came. I remember exploring many little used or abandoned cottages with my friends. Swimming. Skiing. Ice skating in the winter. Fishing.

We had everything we needed. We were NOT rich. It taught us the value of frugality, and to always appreciate what you have been given.

After college moved to the big city on the west coast, then back to the big city in the midwest. Retired now.

I would move back to that little place in a heartbeat if I could and if my wife would be on board.

Just do it.
However not having immediate road access to a medical facility is a big issue as one gets older. The challenges of having to get the boat out when one wants groceries or needs to buy anything (of course, one could say the same about having to get in the car and drive somewhere).

These *are* good places to grow up in. Sense of safety. Not worrying your kids are going to get knocked down by a car. But they don't necessarily suit us as we get older. (Also: memory tends to put a golden hue on everything. The tough bits get forgotten or dulled down in memory).
Valuethinker
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Re: Considering buying a lake house (pros and cons)

Post by Valuethinker »

Watty wrote: Wed Oct 30, 2024 2:45 pm One thing I forgot to mention is that if you do build the house then when you do move in your neighbors may not be very welcoming since your construction will have impacted their enjoyment of their house for a long period of time. If you build a large house on the lot it may also impact their views.
Small communities often have very deep and bitter divisions - that go back even generations. Plus the habitual dislike of newcomers and "part timers" - city folk who don't live their full time, don't shop at the local businesses, don't participate in local community life.

(In the more picturesque parts of England, the 2nd home types are deeply unpopular, for pricing the local young people out of the housing market).
legalwriter1
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Re: Considering buying a lake house (pros and cons)

Post by legalwriter1 »

There can be lots of problems with contractors. Construction delays and defects are common. You can rent a VRBO or Airbnb for monthly rates or weekly rate pretty much anywhere. The newness wears off over time. My grandparents own a family cabin near a lake that we have had in the family for about 40 years. I prefer taking vacations to different lakes and destinations. You can rent boats at many lakes without the worry or hassle.
Tramper Al
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Re: Considering buying a lake house (pros and cons)

Post by Tramper Al »

If a lakehouse means like, a house on a lake, then I have one. And I have somewhere near your level of net worth, invested assets, etc.

Our place is about 130 years old, largely original, and has been in the family all that time. I spent summers at this and/or nearby cottages while growing up, so I may be a little more attached than you are at this stage. I've only been the owner for about 4 years now, though.

Our place is about 2.5 hours drive, and at most 3 season ready. I haven't had anything like a full construction to manage from afar. At the very least, I think you'd want to plunk down a camper trailer.

I agree, though, with suggestions to go with an old house, an existing home, cottage retreat. The money commitment is much smaller, and yet in a way you get much more in the way of history, quirkiness, warmth.

I can totally relate to the adult kids around the country issue and have seen this play out both in our family and among many neighbors. Adults in their prime earning/working years generally don't have multiple weeks off every summer to simply hang out, they just don't. While the working adults will surely visit and enjoy the place, those putting in many days and nights will be the retirees and the grandchildren, and that's OK. Your kids will likely still grow to love the place and want to hold on to the tradition long after you have moved on.

I do agree, though, that it's one more thing to worry about and there is always something that needs to be fixed. OK not just one thing.
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Re: Considering buying a lake house (pros and cons)

Post by tibbitts »

When I was young my parents "built" (by hiring a contractor, that is) a lake house on a much smaller budget (even inflation-adjusted) than involved here. It was exactly 90 minutes aways. On a terrible day it was 95 minutes away. Later I moved to where it was 150 minutes away; on a terrible day it was maybe 160 minutes away. So in both cases a low-stress, predictable drive.

My parents had planned to use it for their retirement (it was a 4-season home), but that never happened due to the death of one of them. And they had planned for me to inherit it, but that never happened because it was just too long a holding period before that would have happened, at too high a cost. So I think the mentions of multiple-generation considerations in this thread are basically wild speculation.

Having said that, it was absolutely worthwhile for them and we all enjoyed it.
Tramper Al
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Re: Considering buying a lake house (pros and cons)

Post by Tramper Al »

tibbitts wrote: Wed Oct 30, 2024 4:10 pm So I think the mentions of multiple-generation considerations in this thread are basically wild speculation.
I agree that next gen commitment that can bridge years of low occupancy or vacancy only happen if the kids have enough regard for the place and its tradition. That does tend to happen on our lake, though. With multiple kids it is often one or another who lives near enough, care enough to take a lead in the next generation.
Gubshu
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Re: Considering buying a lake house (pros and cons)

Post by Gubshu »

My husband’s family has a lake house that he will inherit, and we take care of it. It’s three hours from us. To be honest, it’s not that awesome. Three hours is just not close. We go out every other week for two days, and we have chores to do when we go. Our kids are two and three hours away, and while they like it, their busy lives mean that they rarely go. That said, a lot of the families that have houses on the lake spend tons of time there - many work remotely while there. Most of them are a half hour to two hours max from their lake homes. I think that closer is better, to be honest. We are considering eventually buying a place that is 90 minutes from us, at the most.
tibbitts
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Re: Considering buying a lake house (pros and cons)

Post by tibbitts »

Tramper Al wrote: Wed Oct 30, 2024 4:18 pm
tibbitts wrote: Wed Oct 30, 2024 4:10 pm So I think the mentions of multiple-generation considerations in this thread are basically wild speculation.
I agree that next gen commitment that can bridge years of low occupancy or vacancy only happen if the kids have enough regard for the place and its tradition. That does tend to happen on our lake, though. With multiple kids it is often one or another who lives near enough, care enough to take a lead in the next generation.
I'm not sure that Bogleheads would approve of kids just starting in their careers committing significant money to maintaining a lake house, especially when their careers might take them hundreds or thousands of miles away. Something would have to give, so what should they sacrifice: 401k? Buying a primary home? And increasingly there aren't multiple kids; at least the statistics I've seen seem to be show that since my parents built their house in the 1960s, the average family has dropped from over 2 to under 2 children. So it might fall to one child, with no certainty of there being a follow-on generation after that. A lake house would be nice... but maybe not as practical for a child living alone without any family.
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theac
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Re: Considering buying a lake house (pros and cons)

Post by theac »

SkinnyFats wrote: Tue Oct 29, 2024 2:05 pm I posted this a while back....

I bought a lake house back in 2001.

It’s about 1.5 hours from home, so not too far.
We’ve got the boats, jet skis, etc etc.

The first 6-8 years we were there constantly. Spent all day every summer weekend at the dock. Had company constantly. Good times.

Like all things, the “new’ eventually wears off.

We still go most weekends. But now it’s usually just me and my wife. Company occasionally. The boats seldom get used. Mostly we float around and play with the dogs.

A lot of time we go because we feel obligated, or need to check on the place. It’s not always where we’d rather spend the weekend, but we go anyway.

Also, it’s one more thing to worry about. Right now hurricane Helene is coming through. I’m at home, so I’ll know what happened here. Saturday I’ll go up to the lake to check on everything there.

The things that never change, though, are the work and the bills. There’s always something that needs fixing. Repairs, maintenance, etc. Replace the deck. Replace the roof. Replace the siding. Repair the boats. Pay the property taxes. Pay the utility bills. Pay the insurance. Pay the contractor. Pay. Pay. Pay.

It hasn’t bugged me enough to just sell it (and my wife loves it up there). But when it’s gone, I’ll never own two houses again. One is plenty of work all by itself.
You gave me a great chuckle there!
That is a great summation, just wanted to point that out.

There's a great life-lesson in there for anyone who can hear what you're saying.
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha (a George Harrison song)
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theac
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Re: Considering buying a lake house (pros and cons)

Post by theac »

I haven't read thru all the posts, but while I'm posting, I'll say to the OP that if you do buy it, you may want to rethink tearing down the whole house and rebuilding on a new foundation.

I knew someone who was involved in the REMODELING of the last house Rock Hudson lived in, in the Hollywood Hills.

And when John Landis bought it, all the walls were torn down to the foundation, except 2 (I believe in the kitchen). That was the minimum requirement to qualify it as a remodel--at least 2 standing walls. And they even had to be propped up,
just to keep them from falling over! :D

That saved the new owner a lot of fees and problems with regulations that had taken place after the date of the original build.

On a "remodel," you may not need to upgrade to the latest standards and many things will get "grandfathered in" such as access clearances from the property line, sewage system, etc etc, which may cost you a lot more, while giving you a lot less house than what you could have otherwise gotten by going the "remodel" route.

Anyway, something to check into.
"We keep you alive to serve this ship. Row well...and live." Ben Hur...and The Taxman! hahaha (a George Harrison song)
Parkinglotracer
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Re: Considering buying a lake house (pros and cons)

Post by Parkinglotracer »

You only live once. We had a lake house in upstate New York and it was a hoot. We have a snow bird house in st Pete Clearwater now. Our second home is about 15% of our networth. I have never been able to enjoy my 3 portfolio like I have been able to enjoy a camp fire with friends at the lake, seeing the fireworks from our pontoon boat with the booms echoing across Deruyter lake, or having dolphins racing in our wake cruising thru the inter coastal around treasure Island. Having some money is being rich, using it to improve your life is prosperity. Go for it. If it isn’t for you, you can always sell it. Go for it!
Johnsoalan
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Re: Considering buying a lake house (pros and cons)

Post by Johnsoalan »

I have had several lake houses over the years. Actually live in one now as my principal residence. The ultimate luxury is having one house only. Multiple homes become a burden and will own you more than you own them. With money no object I would rent and go to different places. We now do this often and bring the whole extended family. They love it. Then you turn on the key and walk away. Airbnb is your friend.
PeninsulaPerson
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Re: Considering buying a lake house (pros and cons)

Post by PeninsulaPerson »

TomatoTomahto wrote: Tue Oct 29, 2024 2:11 pm
When my wife floats this kind of idea, I tell her that’s what they make hotels and resorts for.

This!

So this!

And such good advice about chatting with the building inspector.

And how having just one home is a luxury.

If you stay at a resort, if you tire of the area or just have other time issues, you have such an easy out.

If you have ever done renovations at your current home, you know how exhausting and frustrating even the best projects can be!

You don't have to own in an area to feel at home there.

Use that $$$ to resort up, and maybe adopt a rescue dog to love. You'll still have millions & millions & millions left over.
CaptainT
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Re: Considering buying a lake house (pros and cons)

Post by CaptainT »

Can you afford a 1 time 2 million dollar toy? Yes

Is a lake house worth 1/4 your net worth to you? That's a more personal choice
Some things I would think about
Nearby access to top notch health care? How did your parents age? How about your spouses parents? Would it be a year round lake house or seasonal only? What do similar homes on that lake go for? How do you and your family spend weekends now?would you want to sacrifice those things for hanging at the lake? If you have adult children how often do they visit now assume they will visit no more then currently. Do you enjoy construction projects? Do you have experience and skills related to construction project? If had to sell shortly after construction completed how heartbroken would you be? Are you handy? Is your spouse?
brian2013
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Re: Considering buying a lake house (pros and cons)

Post by brian2013 »

I'll give you my thoughts on owning "things" in the context of an old Buddhist story:

The Buddha was sitting teaching to his students when a wealthy farmer ran up to them. "I've lost my cows, have you seen them?"

They responded that they had not.

When the farmer ran off to look for his cows, the Buddha told his disciples "Friends, do you know how lucky we are? We have no cows to lose."

I prefer experiences over things. Owning things can be a burden, especially big, expensive things. Having just witnessed Helene wipe out many places in my beloved NC mountains, this philosophy seems even more relevant than ever.

If it were me in your shoes, I'd forego the big rebuild project and take lots of vacations. Heck, rent out the same place every year if you want a place to return to with your family. If/when the next Helene comes through, you will "have no cows to lose."
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RickBoglehead
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Re: Considering buying a lake house (pros and cons)

Post by RickBoglehead »

Some more thoughts.

3 hours away is too far to manage closely. Contractors are notorious for missing deadlines. A columnist from WSJ wrote a few years back about building at a lake in South Carolina (which stimulated our interest) and being overbudget and way late.

Summary:

Bought lot in December 2016.

Paperwork and approvals delay start of building by 6 months.

Surprise expenses to clear and level sloped lot, etc.

November 2018 moved to area, into rental home, building is not done. $20,000 spent on rental and storage of personal items.

June 2019 building complete (11 months). $100,000 over budget.

In my emails with her, she remarked on the changes they had to adapt to, including limited dining options, the "club" mentality, and going through Covid in an area that treated it differently than where they moved from.

https://www.wsj.com/articles/our-15-yea ... _permalink
https://www.wsj.com/articles/five-thing ... _permalink
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