Vacation homes. Dismal math & a dead horse

[Tim]

Timeshares?! You're locking yourself into a commitment which sounds...not relaxing. "Oh I guess I have to go on vacation now whether I feel like it or not." Not as expensive as a vacation home but at least a vacation home could appreciate and you'd make some money up for the loss you take. Timeshare is money down the drain and you face serious headwinds in getting rid of it

Disney Addiction is very tough to kick.

[JBME]

Keyword. Disney addiction.

You get three years to burn through points and managed right. The key isn't using them, but not buying more points.

Its the one serious vice we have.

But there is a limit. We're not renewing our season passes this next year for Disneyland since we're spending 10days at wdw 🤩😍

haha-I get it. We're going to WDW this October for the first time as a family. Honestly planning it out has been very stressful and I am not looking forward to the vacation. That said, we're staying on property and one way we're "saving" money this way is we bought DVC points from someone who has a timeshare. We save money and we help out the person who bought the timeshare for some reason but doesn't want it.

We are also taking an Alaska cruise next summer on a Disney cruise and I am looking forward to that even though it'll cost more than WDW. Less planning needed. We can take these trips because we don't have a vacation home

[Tangler]

As previously discussed in a separate thread, I am also seriously considering at a second home purchase. It violates all math, personal finance, and common sense rules. It is expensive ($1.5M plus). It is far away (12 hour drive). I will not be able to use it fully until summer, 2024. I hate doing the chores and maintenance for one home, so why would I want to double those headaches?

Here is the logic:
1. We can afford it. We have decided to put off an actual purchase until spring, 2023, at the earliest, unless the "perfect" property is available.
2. We plan to use it progressively more over time, perhaps living there a majority of the time within a few years.
3. Once acquired, we plan to downsize the size, cost, age, and headaches of the current home.
4. (Might be illogical) I want to have a blue state refuge in case things get crazier in our red state.
5. If it does not work out, we can always sell it.*

I am sure that you have a similar pros and cons list. If you are thinking this much about it, and you can obviously afford it, why not try it? If it does not work out, you can sell it, maybe lose a little money in the process, but you will have done it and not wondered how it would have worked out. If it works out well, maybe you increased your life happiness.

Good points, with the possible exception of the “political refuge” part.

[Tangler]

Where would you like to move after you retire? Consider moving there now instead of spending your working years somewhere miserable.

Don’t spend your whole career miserable in New Jersey and then move to Florida or Hawaii or San Diego. Now you might not be able to get a job as a surgical oncologist in the Florida Keys, but there are jobs in Miami, Tampa, and Orlando.

If your plan is to retire in the mountains in the middle of nowhere, you might have trouble if your pediatric subspecialty essentially requires you to work at an academic institution. Maybe you’ll be in Denver, Salt Lake, or Boise. But if you hate snow you can’t ski downhill on, don’t stay in Detroit or Buffalo.

Live someplace awesome……

Not currently miserable.
Agree, if miserable, move.
Life is very good, impossible to complain.
Just like the water.
Complicated.
Wife probably happier in current location than she would be near water.
Mother-in-law also happy.
I am happy too, just greedy for a fishing spot!
No rush.
The math and price just seems to make me want to push pause and re-evaluate
That is a part of what needs to be considered.

[bovie]

I slightly disagree, depends on how you structure things. Definitely more of a consumption than an investment but sometimes it can be a bit of both. Do the math & as always caveat emptor. See my post above.

Thinking you can make a slight profit on a vacation home versus actually doing it are two different things. Not saying you can't, though.

Property taxes are a drop in the bucket compared to purchase price, and renting it out for two weeks per year tax-free is inconsequential. You still have upkeep and maintenance, not to mention the huge hassle of trying to rent out and manage a property that is by definition hours away (minimum) from where you live full-time. Or paying someone to do it for you.

But if I'm buying a place to be my vacation home, the last thing I want is strangers living there for any period of time.

It is a consumption item, or an investment. Not both.

Getting a little cash on the side here or there does not convert a consumption item into an investment.

And again, for Tangler, this is not inherently a financial issue.

To him it feels financial, but it is psychological.

He can afford it, objectively.

[CordMcNally]

You can afford it. Will it be something you wish you didn't do? Maybe. Will it be something you wish you had done earlier? Maybe. Either way, you've put yourself in a position that if you wanted to find out then you can and it ultimately won't be any sweat off your back. We all know that second houses typically aren't the best financial moves but there are a lot of things we do that may not be the best financial move but we do it because it's what we wanted to do. There's more to life than money but you've got to be able to put yourself in a spot where you can truly live that. You're there.

[Hank]

Not currently miserable.
Agree, if miserable, move.
Life is very good, impossible to complain.
Just like the water.
Complicated.
Wife probably happier in current location than she would be near water.
Mother-in-law also happy.
I am happy too, just greedy for a fishing spot!
No rush.
The math and price just seems to make me want to push pause and re-evaluate
That is a part of what needs to be considered.

Your big thing is fishing. So spend more time fishing.

Go to Alaska during the salmon runs. Charter fishing off of Hawaii, Cabo, SoCal, the Chilean coast in our wintertime. Marlin fishing in the Bahamas. You can rent someone else’s cabin along an excellent trout stream for far less than buying a place like that. Salmon fishing in Scotland.

Plenty of fish in the sea. Plenty of great expedition fishing without always going back to the same lake within driving distance of your primary residence.

(Also, bring back more sea bass for your mother in law. She seems to like them.)

[bovie]

Your big thing is fishing. So spend more time fishing.

Go to Alaska during the salmon runs. Charter fishing off of Hawaii, Cabo, SoCal, the Chilean coast in our wintertime. Marlin fishing in the Bahamas. You can rent someone else’s cabin along an excellent trout stream for far less than buying a place like that. Salmon fishing in Scotland.

Plenty of fish in the sea. Plenty of great expedition fishing without always going back to the same lake within driving distance of your primary residence.

(Also, bring back more sea bass for your mother in law. She seems to like them.)

I think that we would make good fishing buddies.

[Tim]

Good points, with the possible exception of the “political refuge” part.

“Barbarians at the Gate” is not fun when the Soros prosecutor goes after you rather than the mob.
There are hazards to be navigated. I doubt VagabondMD is considering SF, Minneapolis, LA, Chicago or NYC. There are reasons besides Red or Blue, it’s where you actually live.

[StarTrekDoc]

Thinking you can make a slight profit on a vacation home versus actually doing it are two different things. Not saying you can't, though.

Property taxes are a drop in the bucket compared to purchase price, and renting it out for two weeks per year tax-free is inconsequential. You still have upkeep and maintenance, not to mention the huge hassle of trying to rent out and manage a property that is by definition hours away (minimum) from where you live full-time. Or paying someone to do it for you.

But if I'm buying a place to be my vacation home, the last thing I want is strangers living there for any period of time.

It is a consumption item, or an investment. Not both.

Getting a little cash on the side here or there does not convert a consumption item into an investment.

And again, for Tangler, this is not inherently a financial issue.

To him it feels financial, but it is psychological.

He can afford it, objectively.

That's the point. Those who own these properties don't make it financial - cause it's not a winner. One can possibly make it a winner with rentals and all that - sure, to defry the cost; but that doesn't sound like a preferred option.

Fish or cut bait, right?

[Tangler]

Your big thing is fishing. So spend more time fishing.

Go to Alaska during the salmon runs. Charter fishing off of Hawaii, Cabo, SoCal, the Chilean coast in our wintertime. Marlin fishing in the Bahamas. You can rent someone else’s cabin along an excellent trout stream for far less than buying a place like that. Salmon fishing in Scotland.

Plenty of fish in the sea. Plenty of great expedition fishing without always going back to the same lake within driving distance of your primary residence.

(Also, bring back more sea bass for your mother in law. She seems to like them.)

Roger that!

[MPMD]

for 20k you could fly 2 direct biz class to london and stay in the four seasons for a 4 nights.

you could do that 30x for 600k.

rent your lifestyle.

[wideopenspaces]

My thoughts about a second home / vacation property

If it is close enough and on a lake , beach or mountains ( 2-3 hours from home)

1. You think you might use it every weekend but after the initial enthusiasm of excess use it might get used once a month or less.

2. You will have to carry all stuff for use when you go there for a weekend or keep a second set of items there and replenish it and throw away expired / unused items.

3. You might spend more than half the weekend doing maintenance stuff on it rather than enjoying the whole weekend.

4. Things need to be done at the primary home for which you need some weekends ( maint, finances, upgrades etc). If you are away constantly from primary home those will get neglected and pile up.

5. The primary home is more comfortable. Better beds, better chairs, better food and cooking utensils, more familiarity with where things and so on that you will not find in a second home.

6. You are unlikely to make any money renting a second home to pay for all its expenses. If you do rent you might find that the times you want to go is when everyone wants to rent. Money trumps, and you stay at home and you go when it is not ideal to go.

I can only speak to having a home within driving distance. We've had it 2 years. My biggest complaint is that we can't spend more time there! If we didn't have kids like Tangler, it would not be an issue. I have not found my enthusiasm has waned. We do keep a second set of things we use regularly at our cabin. Sometimes I take a bag of groceries back and forth but other than that and our dogs we just hop in the car and go. No packing and unpacking all the time and it's very nice. We bought a place that requires minimal maintenance. No lawn care. It's easy to keep clean since it's not lived in daily. We definitely don't spend half our time doing chores. Some time but not a lot. I admit in the summer when we are at the cabin every weekend it's harder to maintain the garden at home but otherwise we pay to have weekly lawncare and cleaning so things are not piling up at home. If i was part time and didn't have kids this would be no issue at all. Personally I find our cabin very comfortable ( and it even has a main bedroom with en suite which we don't have at home!) And at the price point Tangler is looking at I'm sure the home will be quite nice.

All this to say, owning a second home isn't for everyone and it may not make financial sense. But life is about more than money and we have loved our place. I think Tangler would get great enjoyment out of a home base for fishing. Good luck making your decision!

[StateOfMyHead]

I want to know where one can get an actual beach home for less than 1mil?
My dreams were dashed not so much by the repairs and rental woes but my spring VRBO experience in a gorgeous condo but with cold, nasty, windy weather. Even the mutt didn’t want to walk on the beach. Off season at the beach is not as enjoyable as I imagined. We left after 3 days.

[bovie]

I want to know where one can get an actual beach home for less than 1mil?
My dreams were dashed not so much by the repairs and rental woes but my spring VRBO experience in a gorgeous condo but with cold, nasty, windy weather. Even the mutt didn’t want to walk on the beach. Off season at the beach is not as enjoyable as I imagined. We left after 3 days.

Pretty much anywhere outside of the USA.

Would imagine there are options stateside as well, in some lesser-known areas. I'd venture a guess that you might find some suitable options along the Gulf Coast as well.

On a side note, I am one who loves the feeling of being the only one out on an empty beach in the off-season, with a nice chilly breeze. Throw the ball and let the dog chase it for a few hundred yards. Heaven for us both.

Different mindset, I suppose.

Beats a crowded strip of sand covered with umbrellas and overweight bright-white humans blasting 10 different types of music all day. But I digress.

For your vacation, I imagine you were looking forward to warm weather and a little sun. Totally get that.