Pipe dream... But requirements????

LibbyL123 · August 2015

For a vacation home.

Let's say you decided to get one (again pipe dream I know I know)......

What requirements would you have besides price and location???

Distance from home ____ miles?
Be able to use _____ weeks or weekends a year?

On vacation at the beach and love looking at the real estate....... Just thinking about the future and if it's something we could do down the road and what others might feel is necessary for purchase there than money etc...

simplyelise · August 2015

I am not a beach person in the slightest and I don't like the idea of buying a place far away to hire a management company to rent it out most of the time. I'd definitely rather be the renter in that scenario.

So if I were to buy a second house (don't even have a first yet lol), it would probably be more of a cabin in a rural area of my state, maybe down in the ozark area on a smaller lake. I don't think I'd want to rent it out at all, but offer to family and friends sometimes. That would be about 3-5 hours from where we live and plan to stay, so easy for a weekend trip.

hoffse · August 2015

H and I have talked about doing this, because it's a fairly realistic thing for us once our debt is gone. Most of the older people we work with have vacation homes. There are lots of lake houses within an hour's drive of us and the Gulf is 4 hrs from us.

For us, the lake is probably more reasonable because it would be easy to go after work on Friday and come back Sunday evening. We would (in theory) get a lot of use out of it for more than half the year, and then we would feel like we could go other places as well. We have lake weather from about April through November, so plenty of opportunity during the year.

With the beach, it's just far enough away that we wouldn't be able to make a regular weekend work, so most holidays would end up being spent there. That said, beach homes/condos have much higher rental potential than lake homes. A friend of ours has a family beach house that rents out for $6K per week because it's oceanfront. His mom (the owner) has no problems keeping it full, and it's a 5-bedroom house that can sleep like 12 people, so lots of times she has multiple families/couples stay and split the cost.

I think for us the criteria would be:

1) Willing to retire there (or contemplate it seriously). You don't want to be the person stuck with a vacation property you are trying to sell in retirement. They move much slower than regular houses because the buyer's market is much smaller.

2) Be able to use it enough or rent it out enough that we still feel like we can travel to other parts of the world even though we own it. We really enjoy travel, and we wouldn't want to feel like all future vacations would need to be at the same place.

To be honest, one thing to look at is how often you actually go. We go to the beach on average 1-2 times per year. That's enough to give us our beach fix while feeling like it's a special thing. Our friend with the oceanfront house just lets us stay there for free (which is amazing), but even if we paid for a rental like that all to ourselves and didn't split the cost with another family... it would be $6-12K per year. That's a lot of money but a LOT less money than actually owning a house down there ourselves. The maintenance and insurance alone (hurricanes) is much higher than you might expect. Plus the price of the actual real estate is really high.

With a lake, we could easily test our interest by buying a boat, paying docking fees, and seeing how much we actually use it. That's a nice "in between" step because your initial cost isn't as high, and if you find you really don't use it as much as you thought you would, you can always sell a boat. It's much harder to sell a house.

H and I have actually talked seriously about buying a small flat somewhere in Europe to use as a vacation home in retirement and then doing maybe 4 months there, 8 months here kind of thing. We aren't exactly sure where that would be, but ideally some place near a good transportation hub so we can use it as a base to visit other places for long weekends, etc. We've talked seriously about Brussels, Paris, and Barcelona because all are very well-connected to other parts of Europe. If we did that, we would rent it out when we weren't there.

MommyLiberty5013 · August 2015

My family has waterfront property (roughly 15 acres) that my grandparents bought in the 1970's and put a home and a boat house on it. It's on a far northern lake in a north eastern state.

I can tell you from personal family experience that having a home 8-10 hours away from your primary residence is VERY difficult. My grandparent's live in Ohio. They didn't go there in the winters, but lived there full time in the summers, and nearly every year some vandals would come and break in and steal stuff in winter time. One time, someone pooped in the water tank.

Property taxes are another issue. And, now that only grandpa is still living, our family is faced with the issue of how to pass on a piece of property. It's hard - it cannot be divided like cash or stocks can. And, then there's the up keep and maintenance time, effort, and monetary costs.

DH's parents have a town home in a south western state and live in Iowa. At least they are in a gated community and don't have the vandal/theft problems. They live there in the winters. Again, they face the same issues.

A friend's family has $$$$ real estate on the Gulf coast of FL. And, they too are facing the same issues - how do you split land? Who pays for the up keep/taxes? How do you devise a visitation schedule for all parties involved? What's fair when there are 4 families dealing with one piece of property?

IF you do buy a second home, then just recognize these issues exist and don't romanticize it only thinking of all the wonderful reasons to have a 2nd home.

Furthermore, knowing you have this 2nd home and paying for it may also cause you to feel guilty if you don't spend "enough time" there and may cause you not to take other vacations. Like the problem people have with buying boats - they think they will get used, then they don't and the boat sits and sits draining money.

strickland8052 · August 2015

I don't think I would be interested in a second home, even if we had the money. We like traveling to new places, so I'd rather take this hypothetical money and use it on international travels.

But... for the sake of playing along, I'd choose a little cabin in a quaint little town by the mountains and the lake about 2-3 hours away. It is nice to get away from the city, but right now we can accomplish that by visiting my parents who live somewhere similar to what I just described.

hoffse · August 2015

MommyLiberty has some excellent points.

Frankly, I think that's one reason why the "vacation" house either needs to be quite close (like those lake houses 1 hr from us... en route to H's family in Atlanta, no less) or else you need to be willing to rent it out. Houses need to be occupied on a regular basis for all sorts of reasons. If we had a property that we weren't visiting regularly, we would have it professionally managed while we weren't there so that SOMEBODY was in it at least once a week, if for no other reason than basic cleaning/upkeep and so that we would know if something happened while we weren't there.

For me, the property management aspect of it is a cost that just needs to be factored in if we aren't going to be there very often.

Personally, I also think that buying a vacation house is only wise if you are in a situation where you put down an enormous down payment or perhaps even pay cash for it. And I'm somebody who is into debt leveraging. The reason being that the value of vacation houses tends to go through booms and busts to a greater degree than your standard residential homes, and you don't want to find yourself suddenly (seriously) upside down on that property while struggling to make payments. Good luck finding a buyer when you need one. The whole thing needs to be affordable enough (with respect to your monthly costs) that you can afford to wait it out if you decide to sell.

short+sassy · August 2015

So funny you just posted this! My coworker and I were just complaining this morning about the unbearable heat and I was telling him how much I hope to buy a cute little (but luxurious) cabin in Lake Tahoe once I retire. And become a "sun bird". Leave NOLA from May-Sept to escape the heat and live in Tahoe instead. We'd probably go out for a month or two during ski season as well.

Bonus points that Tahoe has visitors all year long and we could rent it out to vacationers when we won't be there.

vlagrl29 · August 2015

Kaua'i and it has to be a beach home that we can live in for 6 months (winter here) and rent out for the other 6 months. I would like it to be somewhat walkable to the ocean. And once we get to retirement age we will just move there full time.

ETA - our house and DH's studio will be paid off by that time. our house already is and DH wants to have his studio paid off in 10 years instead of 20.

dragonstarjk · August 2015

H and I have had several discussions about this, because frankly, I hate winters here. I want to retire somewhere warm, or at the very least, purchase a condo somewhere warm to live in in the winter. We probably would not do this until retirement so we wouldn't be too concerned about whether we could rent it out or not. It has to be somewhere warm and near a beach! I love the central coast of California and we've also talked about Hawaii. Both are a long ways away, but I'm figuring if we can afford a vacation home, we'll be able to afford to fly there :-P

AprilZ81 · August 2015

I don't know if I would ever buy a vacation home because I would want to be right on the beach an the hurricane insurance and flood insurance would cost too much. Plus I would feel obligated to go to the vacation house anytime we went somewhere and I like to visit new places.

als1982 · August 2015

We talk about this all the time. If we were now financially where we hope to be in five years, we would buy a condo in Orlando. H's dad and most of his college friends live there, so we visit often. I also love the proximity of Orlando to other beaches and places for day trips (Clearwater, St. Augustine, etc.) plus it would be an easy place to rent out, or let friends and family stay there when they're visiting the parks.

I'd also love to own a place in Barcelona or Wellington, New Zealand, which are our two most favorite international destinations. So much to see and do in both places!!

Xstatic3333 · August 2015

I would love to have a small cottage on Cape Cod, or maybe one of RI's beaches, both of which are within 1.5 hours of home. I think this is doable for us within15-20 years since we don't plan to upsize our primary residence. I would get it near the beach, but not oceanfront since erosion is a huge issue in these communities.

We both are unusual and love visiting beach towns in the off season. It's great for bird watching, and the Cape still has many great restaurants and attractions with less crowds. We would plan to rent the cottage out for most of the summer, but visit most off-season weekends. Friends of ours who do this more than cover their mortgage with the summer rental, even with management and cleaning fees. I'd just want to wait until we had a sizable DP.

JoanE2012 · August 2015

We have no desire for a vacation home - traveling and seeing new places is very important to us. I'd be bored if I went to the same vacation spot all the time. But that's just us. We see plenty of our friends and family that visit the same place year in and year out and love it.

Xstatic3333 · August 2015

JoanE2012 said:
We have no desire for a vacation home - traveling and seeing new places is very important to us. I'd be bored if I went to the same vacation spot all the time. But that's just us. We see plenty of our friends and family that visit the same place year in and year out and love it.

Maybe it's a regional thing, but most of my friends and family with vacation homes use them more for weekends then for their major vacation of the year. That may be easier in New England when there are so many options that are a very short drive and very profitable to rent out.

smerka · August 2015

My parents have a ski condo in CO. It has been an execllent investment for them. It has doubled in value in 15 years. It is ski in/ski out and rents yearround. They get to use it two weeks a year without hurting the tax status.

CuriousKiddosMama · August 2015

I would love a vacation home someday. I could see this turning into our retirement home pretty easily. I would want it just a couple hours away so it's easy to get to for a 2 or 3 day weekend. I would love one in Texas hill country near the winery's and a lake. That would be neat.

JoanE2012 · August 2015

Xstatic3333 said:

We have no desire for a vacation home - traveling and seeing new places is very important to us. I'd be bored if I went to the same vacation spot all the time. But that's just us. We see plenty of our friends and family that visit the same place year in and year out and love it.
Maybe it's a regional thing, but most of my friends and family with vacation homes use them more for weekends then for their major vacation of the year. That may be easier in New England when there are so many options that are a very short drive and very profitable to rent out.

Yeah, true, I wasn't thinking of it like that. I was thinking more of a place that you would fly to, not a place within an hour or two drive.

Xstatic3333 · August 2015

JoanE2012 said:

Xstatic3333 said:

JoanE2012 said:
We have no desire for a vacation home - traveling and seeing new places is very important to us. I'd be bored if I went to the same vacation spot all the time. But that's just us. We see plenty of our friends and family that visit the same place year in and year out and love it.
Maybe it's a regional thing, but most of my friends and family with vacation homes use them more for weekends then for their major vacation of the year. That may be easier in New England when there are so many options that are a very short drive and very profitable to rent out.

Yeah, true, I wasn't thinking of it like that. I was thinking more of a place that you would fly to, not a place within an hour or two drive.

Gotcha. I wouldn't want one you had to fly to, either. And I'd definitely prioritize big trips over having a beach house financially.

I just got back from dinner last night with a good friend who just bought her third Cape house! They are all very small cottages, and she's renting two of them out constantly and keeping one to use. They're considering it part of their retirement portfolio. They have good jobs but nothing too crazy, they've just been financially savvy.

brij2006 · August 2015

We have actually been seriously discussing this rather than moving out of our current home and into a different one. We would rather have a home at the Lake of the Ozarks.

Our requirement would be that it's a lake front property with a dock. The Ozarks is 6 hours away from us, but we would store our boat down there and go Friday-Sunday. It's no big deal for us to take off for a 6 hour drive just for a 3 day weekend.

However, we have a group of 50 of us who go down every year (just got back Saturday). So between all of us, we know we would have plenty of people to rent it out to during other times of the year, and now that our families are very very small, we would have holidays there. My parents are also interested in going in on the home with us. So that makes a difference as well.

Erikan73 · August 2015

My sister & brother in law are actually looking into this. For them they are thinking a 2-3 bedroom apartment/condo. Reason being is then no yard to have to deal with for upkeep. They want an area an area that is a hot travel spot so that they can rent it out (through a vacation property management company) when they don't want to use it. The reason they want to go through a management company for renting is from what my sister tells me, they arrange for cleaning of the unit after renters leave and can help deal with any on site issues for you. They plan to visit the areas that they are interested in possibly getting a place over the next few years. They want something that is close to local attractions, resturants & food. Because even though they are on vacation while there, they want to be able to get a few basics which for them is beer & wine & snacks...lol. The big thing is that they want to find a place that interests them enough to want to go there every year on vacation. They don't plan to spend a lot on furnishings or putting anything of personal value in it since they do plan to rent it out. Don't get me wrong, it will be nice, but they aren't about to get a high end couch know people could be eating on it, sleeping on it, or if there are kids, jumping on it. Or leave a family heirloom vase down there. The big thing is that is has to be interesting enough that after going there for 2-3 years, they aren't bored with the area.

maple2 · August 2015

I have to say that before kids I could never understand the appeal of a vacation home because I couldn't imagine going to the same place over and over again. Now that I do have kids, I totally get how it simplifies travel, especially since one of our usual travel goals with kids is to get them out in nature more.

We live in an area where rental beach houses are very common. We have thought about investing in one that we could let family stay in when they come to visit but rent out the rest of the time. There is a good off-season rental market here, but it's primarily students during the academic year which is not super appealing as a client base. One of those places would be an hour or less from our house. I don't think the 4 of us would actually use it all that often because it's fairly easy for us to get to the beach as it is, and, to be honest, we aren't really beach people It would be a nice alternative to a hotel when we have a lot of company, though. If we went this route, it would primarily be an investment--one that would be close enough that we could do a lot of the on-the-ground upkeep and management ourselves.

Alternatively, I would love to have a cabin in the mountains that we would actually use for our family. A place like that would be 2-4 hours from our house, and I imagine we would go about once a month. It would be much harder to rent out, especially if we had any hopes of covering a large chunk of the mortgage with rental income. We would also have to hire out more of the upkeep and management, which would eat into any income.

In the end, we will probably just stick with lots of camping trips. Much more affordable, fewer logistical challenges, and still meets our goal of getting the kids out in nature. The downside is that it's not so practical when the weather gets colder, so we would still likely rent a place to stay at least once a year in the winter. Still cheaper than a 2nd mortgage, though.

Pipe dream... But requirements????

Re: Pipe dream... But requirements????

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