Vacation homes. Dismal math & a dead horse

[Tangler]

Tangler, so you’re holding off actively searching for the second/beach home? I’m sorry to hear that. What about your prior statement regarding being 80 years old with 10M in the bank, not fully taking advantage of being able to throw the kayak on the roof rack from ages 50-70 (or something like that)?

I think we’re going to take the plunge, and we are meeting with a builder this coming weekend. Our property is at the coast, 150 ft elevation (outside the tsunami inundation zone), with bay and ocean views. <90 minutes from our primary home. The kids are all out of the house, and I’m cutting back to part time next year. Once the home is completed, we’ll be splitting time between the city and the coast. We’ve been in our current home for 22 years, and we’ll either downsize or sell the primary home altogether when I retire in <8 years.

The recent passing or advanced cancer diagnoses of close family members have made us re-evaluate why we keep waiting.

Awesomeness! Congratulations!
Good stuff. I will probably do something similar, just not now. All good. No regrets here.
I think the best way to do it is as many here described: downsize or sell the primary residence and make the vacation home essentially the main house. We are not ready for that; not yet.

[Tim]

bingo, just makes sense to me to look slowly and carefully.

Been looking extremely slowly, 10 years. If I move, it’s the last time (I hope). The problem is not the $$$, it is picking the place to land. Home turns out to be mostly an emotional decision. You will have probably wake up one day and say to the spouse, “It’s time”. That is when you make your real plan.

[mamaham]

It would be interesting for you to try to analyze what makes siblings turn out so different. There is not a "playbook for parenting". At some point they just turn out different.

Tim - you might enjoy the Birth Order Book. It talks about this very thing. I find it to be eerily correct in my experience.

[dennis]

If you are truly concerned about the cost you could consider a concept, not original to me, of buying an income producing asset that pays for the consumer item. I did that for our lake home. We bought our first apartment building, the income from which pays for the mortgage on our lake home. The other option was to put a larger amount down on the purchase but at the end of paying off the mortgage we'll have both the lake home and the income producing apartment. We have other expenses that aren't paid by the apartment building but having the mortgage paid for makes a big difference.

[Tim]

Tim - you might enjoy the Birth Order Book. It talks about this very thing. I find it to be eerily correct in my experience.

• First Born: Firstborn children are described as leaders who are often perfectionists and desire approval from those in charge. Leman also states that firstborns are "typically aggressive" but are also often people-pleasers.^[5]
• Middle Child: Middle children are sometimes diverse in that they are "guaranteed to be opposite of their older sibling" and often have the feeling that they are ignored in favor of their older and younger siblings. They are also described as having personalities that lean towards being secretive and can often serve as peacemakers between their older and younger siblings.^[5]
• Last Born: Leman describes lastborns as "social and outgoing" but also the "most financially irresponsible of all birth orders". He also comments that they have the potential to be manipulative as well as charming

Well, wife is one of seven and I am one of five and I have two. Missed on all three.

I think I know the reason why. Probably started his study with different generations!

[mamaham]

• First Born: Firstborn children are described as leaders who are often perfectionists and desire approval from those in charge. Leman also states that firstborns are "typically aggressive" but are also often people-pleasers.^[5]
• Middle Child: Middle children are sometimes diverse in that they are "guaranteed to be opposite of their older sibling" and often have the feeling that they are ignored in favor of their older and younger siblings. They are also described as having personalities that lean towards being secretive and can often serve as peacemakers between their older and younger siblings.^[5]
• Last Born: Leman describes lastborns as "social and outgoing" but also the "most financially irresponsible of all birth orders". He also comments that they have the potential to be manipulative as well as charming

Well, wife is one of seven and I am one of five and I have two. Missed on all three.

I think I know the reason why. Probably started his study with different generations!

There are chapters where he talks about those types of situations too. My brother is 7 years younger than the next sibling and he acts as an only child. Depending on the age gaps and family dynamics the "other middle children" will pick up one of the roles. It is not an exact science but overall I have found it to be close in my experience. But overall, it is amazing how siblings all raised in the same household are so different.

Also in reading that book, he says that first borns should not marry each other --- well I missed on that one! If both you and your wife are middle children in the 1/7 and 1/5, then that is one of the best marriage scenarios!

[BostonRN]

Own our current home north of Boston. Purchased a cape house in 2010. On a pond, beautiful views, 1/2 mile walk to the beach. We spend all summer on the cape (spouse goes back and forth to work, but can also work from home). Kids work on the cape and make $ for college. We host an annual family reunion, 4th of July party and each child brings multiple friends throughout the summer to spend time with. We also go down at least one weekend a month off season to enjoy the home. I consider it my anti-depressant, anti-anxiety medication. Both spouses have to agree that it is a hobby, an expensive one at that. We enjoy working on the house, cleaning, decorating and making small improvements. It could also easily rent for $10k/week in the summer if we decide to do something else for a summer vacation.

[Tangler]

This thread is a good reminder for me.

[Tim]

This thread is a good reminder for me.

A very good reminder.

[Nash22]

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.

I completely agree. In the AirBNB/VRBO era, owning a second home makes zero sense. You can rent someone’s else’s fancy neat home (and they are all neat because they have to compete) and do it much cheaper and let them deal with it.

It’s not just being stuck paying out the ****************** for the Westin anymore…

AirBNB is worldwide and while they are expensive they in the US because the US is rich, in other parts of the world they are dirt cheap. I got a nice apartment in Belize for $350 for an entire week.

Travel internationally cheaply, never go to the same place twice. Or you can go to Sarasota 4 times a year to the exact same place your choice…

[Tangler]

Here is the irrational house I am looking at in a few days (when I am down there working, {I work part time down there}):

I know it make no sense. But there is a part of me that says: Yeah, but you could rent it out and it will appreciate and it would be a place to keep your stuff (boat) and........
I will look at it. Wife will give me a firm no and I will then do the math and remind myself it is illogical. Or......unlikely.....I will love it, convince wife and pull the trigger.

Anyway, here is the house:

https://redf.in/Ws2aaZ

[Tim]

Here is the irrational house I am looking at in a few days (when I am down there working, {I work part time down there}):

I know it make no sense. But there is a part of me that says: Yeah, but you could rent it out and it will appreciate and it would be a place to keep your stuff (boat) and........
I will look at it. Wife will give me a firm no and I will then do the math and remind myself it is illogical. Or......unlikely.....I will love it, convince wife and pull the trigger.

Anyway, here is the house:
https://redf.in/Ws2aaZ

Curious, purchased 9/2021 for $695,000.

The recent history shows
Listing
Pending. (backed out
Relisting
Closing (9/21)
Listing (12/22)

The pattern of recent activity being a deal didn’t close , a subsequent sale and now selling at 1 yr 3 months might indicate some issues. I would have my antennas up. Might be the house, might be a neighbor, might be the neighborhood or whatever.
Does not fit the pattern of a flip or rehab in price or timing.
Only three reasons a vacation property sells at about the same price in a year:
1. Financial distress-unlikely
2. Buyers remorse- for whatever reason
3. Death in immediate ownership
Before I would go beyond a showing, I would want disclosure. A vague reason would make me walk away. There is something there. I would verify any explanation or conclude I don’t know so I walk.

[StarTrekDoc]

Nice. 699k and ,,4k estimated costs while 2.8k rental per redfin. So be aware of that and if other numbers jide.

Like tim said do homework on the why when a flip occurs quickly and one cycles through pending .

[Tangler]

yeah……i saw that too. Thanks!!!!

[Tim]

yeah……i saw that too. Thanks!!!!

It used to be that a political figure or someone famous added prestige to a neighborhood.
Not so much now. Funny how things change.
You can fish there anyway. Just watch out for protesters.