Owning 2 homes - Is it worth it?

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Firemenot
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Re: Owning 2 homes - Is it worth it?

Post by Firemenot »

I’ve owned a second home it the past. All the emboldened squatters give me pause now. Remote work makes it more feasible now, however, to split time.
edge
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Re: Owning 2 homes - Is it worth it?

Post by edge »

Wife kept wanting multiple homes. Asked her to figure out how many days a year we would be in them. She took forever to do it. Would be a ridiculously small number and then less actual vacations.

Pain in the rear with very little benefit and many downsides (maintenance etc). And the pain would be all mine and not hers.

I sense makes slightly more sense in retirement (split year living) with smaller more manageable properties (condo / townhome).

No way would I rent out a property. No. Way.
hudson
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Re: Owning 2 homes - Is it worth it?

Post by hudson »

edge wrote: Tue Apr 02, 2024 3:41 pm Wife kept wanting multiple homes. Asked her to figure out how many days a year we would be in them. She took forever to do it. Would be a ridiculously small number and then less actual vacations.

Pain in the rear with very little benefit and many downsides (maintenance etc). And the pain would be all mine and not hers.

I sense makes slightly more sense in retirement (split year living) with smaller more manageable properties (condo / townhome).

No way would I rent out a property. No. Way.
Once I was in the same boat...same request. There was no way I was going to add the pain of a 2d house.
My solution was to say that we would get a nicer place at a place of our choosing once or twice a year....maybe more.
It's been 14 years since we passed on the 2d house. Everybody's happy.
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snackdog
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Re: Owning 2 homes - Is it worth it?

Post by snackdog »

We had a vacation home for ten years. Short term renters about 30% of the time defrayed the operating costs and kept the mice at bay. We adored the house and location but when we were there I spent a lot of time fixing/improving stuff or going to the hardware store. I like to tinker.

When we sold it (for triple what we paid), we realized the savings on annual property taxes alone would take us on a carefree holiday for a couple weeks per year. 4% annually of the proceeds of the sale would be two months in a luxury airbnb almost anywhere for the next several decades. No we go back to the same location but in a basic house with an incredible view. I don't go to the hardware store or fix anything. I go hiking or fishing. Sometimes we go elsewhere. Carefree!
BH Consumer FAQ: | Car? Used Toyota, Lexus or Miata. | House? 20% down and 3x salary. | Vacation house? No. | Umbrella? $1 million. | Goods? Costco.
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ichee_marone
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Re: Owning 2 homes - Is it worth it?

Post by ichee_marone »

We own two and the appreciation far outweighs any cost to maintain either house. 3 hours back and forth. We also VRBO out of state for a month to test out another location and can see splitting time there (we intend to sell the main house, at some point, but could carry 3 houses for a couple of years). Somewhat dependent on where kids settle, I guess 😁
lessismore22
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Re: Owning 2 homes - Is it worth it?

Post by lessismore22 »

Firemenot wrote: Tue Apr 02, 2024 12:18 pm I’ve owned a second home it the past. All the emboldened squatters give me pause now. Remote work makes it more feasible now, however, to split time.
This is why our 2nd home makes sense to us. Can work remotely. Ours is only an hour away. We will spend 2/3 of the summer there, and make a half dozen trips in the winter for ice fishing. I would never buy a second house that required a plane ride to get to.
CuriousGeorgeTx
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Re: Owning 2 homes - Is it worth it?

Post by CuriousGeorgeTx »

We have a vacation hone in the mountains and love it. (Our primary hoe is in southeast Texas and we like to enjoy cool mountain air in the summer and a little snow in the winter. We have lots of friends and extended family in the general area. It is in a zero lot line community, so we only have to take care of the inside. We can and do lock it and leave it.

As others have said, it is only something to consider if you really can afford it. You don’t want to impair your retirement trying to stretch to do something that is beyond your means.

We bought ours in the wake of the 2008 crisis. it’s worth 2 or 3 times what we paid for it. I doubt we would buy it at today’s prices.
bltn
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Re: Owning 2 homes - Is it worth it?

Post by bltn »

We own a house in Florida as well as a home about a 4 hour drive away. We built the house in Florida in 2007. We paid cash for the vacation home. We decided having a vacation beach home made sense for us since 95% of our vacations had been to warm beach destinations. We had vacationed in the area of our beach home several times before deciding to build there.

With our experience, I d mention several considerations.
1. Pay cash or get a short term mortgage for the second home.
2. Get the home within easy driving distance from you main residence.
3. Don t get a home whose cost has to be supported by rentals. Keep the second home for your use only.
4. Realize that there will be maintenance costs to include taxes and insurance and make sure you re comfortable with these costs. These maintenance costs may decrease your ability to take vacations in other destinations.
5. Don t plan on this being a good investment (though it may turn out to be ok as a storage of wealth that may be liquidated if necessary.)
bltn
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Re: Owning 2 homes - Is it worth it?

Post by bltn »

hudson wrote: Tue Apr 02, 2024 3:55 pm
edge wrote: Tue Apr 02, 2024 3:41 pm Wife kept wanting multiple homes. Asked her to figure out how many days a year we would be in them. She took forever to do it. Would be a ridiculously small number and then less actual vacations.

Pain in the rear with very little benefit and many downsides (maintenance etc). And the pain would be all mine and not hers.

I sense makes slightly more sense in retirement (split year living) with smaller more manageable properties (condo / townhome).

No way would I rent out a property. No. Way.
Once I was in the same boat...same request. There was no way I was going to add the pain of a 2d house.
My solution was to say that we would get a nicer place at a place of our choosing once or twice a year....maybe more.
It's been 14 years since we passed on the 2d house. Everybody's happy.
Our second home started as the purchase of a waterfront property lot which I thought might be a good investment. My wife thought it would be a good home site. We got an offer to sell the lot a year after we bought it for about 5 times the purchase price. That was my number. My wife wanted a beach home. We now have a beach home! The good news is that our beach home is now worth about 4 times the total cost of the residence. Because of capital gains taxes we ll probably keep it as part of our kid’s inheritance. Oh well.
timcob
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Re: Owning 2 homes - Is it worth it?

Post by timcob »

Owning a second home is a different logic than your first house. We all have to live somewhere and so your expenses are comparable to renting. So for example you might own for 2000 a month or be able to rent the same home for 1800 so your costs are only 200.

The second home is different logic as nobody needs to own two houses and you can only actually be in one house at a time. So the entire cost of the second house is a loss. Add to that the duplication of many bills such as insurance, electric, cable, taxes etc.

We had a second home at a popular lake for nine years. When we sold it I got 50 k more for it than I bought it for. The realtor congratulated us on our wise investment. But I had to pay taxes on that 50 and there was also the real estate commission etc. Also I always budget and kept meticulous records and so knew that the second house cost about 30k a year to own when I considered interest, taxes, insurance, bills and maintenance. So rather than making 50k I actually lost well over 200k on it. Many of my friends also had second homes and hardly anyone keeps good records and most people have no idea how much they are spending on them. My conclusion is that there were two types of people: those who made money and those who kept good records.

My advice is to treat a second home like you would a boat or a plane. You buy these things because you want them, but they are not investments like the ones we usually think of the term. And there are certainly ways to lose less money on them. Keep good records so you know the true cost and dont forget to include numbers like inflation and opportunity cost. Over a few years it all adds up to real money so dont do it unless you are gettign a lot of enjoyment out of it. As a rule of thumb the appreciation of most houses is inflation+1% and the ownership cost is about 5%. Most real estate loses money. And as soon as it stops being fun, sell it.
Gadget
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Re: Owning 2 homes - Is it worth it?

Post by Gadget »

My personal feelings are that a 2nd home is never a great financial decision on its own unless you just get really lucky. Sort of like getting lucky on an individual stock pick like NVIDIA, which is basically against the bogleheads mantra.

However, 2nd homes can be great family decisions for your mental well being and making family memories. It's up to each individual to decide what that is worth. For our family, we love our weekend home and use it all the time outside of kid sports seasons. It's a great retreat for family memories, even if it's likely a loss financially each year. If we weren't able to drive to it though within a couple hours, we'd get a lot less use out of it. For our family, a 2nd home where we could only visit it by flying to for a few vacations a year wouldn't be worth it. But each family is different.
CLKGTR
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Re: Owning 2 homes - Is it worth it?

Post by CLKGTR »

bg5 wrote: Sun Nov 26, 2023 11:01 am So my wife and I ages 42 and 37 are both teachers and we will get pensions (our state allows us to collect SS as well). We are great savers and already have around 600K in retirement and that will probably be around $2 million (if not more) by the time we retire in 10-15 years.

We have always thought about buying a 2nd home to winter in such as Florida or Arizona but am curious how others who have two homes feel about it. I have also considered just renting during the winter months or hopping around form vacation to vacation such as going to Mexico for two weeks, then to Arizonia, etc. to break up the winter.

If we could retiree today our pensions combined would be around $80,000 and we will probably draw around $40,000 a year from retirement along with SS when it kicks in. we will be debt free so it appears we will be able to easily afford a 2nd home but now sure what advice those who own a 2nd home have for doing so


Been there and done that. Dont do it.

Buying a second house is one of those dumbest financial moves which include 1) Boat 2) Plane 3) Timeshare and etc.
Gubshu
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Re: Owning 2 homes - Is it worth it?

Post by Gubshu »

H’s family has a vacation home a little more than 3 hours from us. H will inherit it. We have already been taking care of it for years, though, as his elderly mother lives out of state. If it were my choice, I would not have this responsibility. It IS a responsibility, financially and physically. If we had enough money that we could hire people to do everything for us - open, close, winterize, maintenance, cleaning - it would be fine. As it is, we go out to work, we might relax for a couple hours, and that’s about it.
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