Vacation homes. Dismal math & a dead horse

[Tangler]

Is renting a reasonable option? Do you have the boat already? 2 hours is pretty far

1hour 15-20min drive, not too bad. Renting is certainly possible but not sure how much it will ultimately generate and as others have said, primarily a vacation house. Boat 🛥️ is next big purchase but not immediately.

[Tim]

The second house was also a recent sale!
Looks like a rehab/flip deal. Not familiar with Cape Cod properties or even Ma. values.
So far each one you like was purchased during the FOMO period for real estate and is now the new owners want out.
If you look at the valuation histories, you know that RE is local. A ton of Boston money seems to have migrated to desirable areas, live at the beach and dreams of working from home.
Not predicting a crash, but I sense some owners are trying to get out because the appreciation has slowed and that vacation house investment train had left the station.

[Tangler]

The second house was also a recent sale!
Looks like a rehab/flip deal. Not familiar with Cape Cod properties or even Ma. values.
So far each one you like was purchased during the FOMO period for real estate and is now the new owners want out.
If you look at the valuation histories, you know that RE is local. A ton of Boston money seems to have migrated to desirable areas, live at the beach and dreams of working from home.
Not predicting a crash, but I sense some owners are trying to get out because the appreciation has slowed and that vacation house investment train had left the station.

Yep second one was a buy and flip and the seller is the agent (agent = owner). I don’t know if I will do it but I will certainly be careful and do due diligence.
Second home is certainly a flip but it looks like they did a good job and it is a perfect location that I fish every spring, summer and fall.
Wife rolls her eyes and gets n/v when she sees price per square foot etc.
I look at it tomorrow at 14:30.
Thanks for the help. Sorry for all the posts.

[wideopenspaces]

Yep second one was a buy and flip and the seller is the agent (agent = owner). I don’t know if I will do it but I will certainly be careful and do diligence.
Second home is certainly a flip but it looks like they did a good job and it is a perfect location that I fish every spring, summer and fall.
Wife rolls her eyes and gets n/v when she sees price per square foot etc.
I look at it tomorrow at 14:30.
Thanks for the help. Sorry for all the posts.

I think it's pretty darling and the location/drive sound great. I bet you'd use it a ton. Ours is a 2 hr drive and we're there every weekend in the summer pretty much. I'm typing this from our vacation home. I don't think I'd ever get tired of being up here. Let us know how the viewing goes!

[MSooner]

Earlier this year we bought a lot to build an investment home in the Smokies in 2-3 years. We go up there 4-5 times a year and it’s 2 hours away, so we expect to use it often enough. The primary goal is definitely to make money and to give me a way to increase our net worth without taking on a full time job.

Something that has been really helpful is joining some Facebook groups for owners local to the area. I’ve learned so much—which areas have well issues, common maintenance issues I wouldn’t have expected, features I should think about including when we build, what the heck to do when a wildfire rips through the area, and so on.

I am a sucker though—I ended up taking on the HOA president duties because it’s a small neighborhood with a shared well water system and someone has to be the point of contact when something goes wrong. It’s gone down twice since I assumed the duties, including today 😬

I don’t think I’d want to deal with the hassle if there wasn’t potential for it to be positive financially.

[Mitchel674]

Is renting a reasonable option? Do you have the boat already? 2 hours is pretty far

Now you sound like my wife!

We currently rent a place often on a great lake with two slalom courses about 2 hours from my primary home. The owner even rents me his ski boat. Cozy at only 1000sqft and one bathroom but a nice setup. Sadly, it's not always available like my own lake house would be.

We don't have a ski boat yet, but that will come this year. The ski boat market has been even crazier than the lakefront realty market!

I think 2 hours is just a bit too far.

[Tangler]

I think it's pretty darling and the location/drive sound great. I bet you'd use it a ton. Ours is a 2 hr drive and we're there every weekend in the summer pretty much. I'm typing this from our vacation home. I don't think I'd ever get tired of being up here. Let us know how the viewing goes!

Saw this house. Love it. Wife will likely veto:

https://redf.in/kjJ4rY

[wideopenspaces]

Saw this house. Love it. Wife will likely veto:

https://redf.in/kjJ4rY

How come??

[Tangler]

How come??

She is:
1. smart, realizes the math on rent vs buy vacation house. She is almost as frugal as MMM
2. Thinks the cape is overpriced (it is, IMO, but it will not go down substantially, it will cool off, flatten, go up more slowly is my guess) (limited land area)
3. She would rather just own one home and she likes the city more than the country (city mouse vs country mouse)

The second house is like a bento box. Space perfectly organized. It was a down to the studs renovation and it looks amazing. It is small, but did not feel small. Perfect fishing “camp” yard is awesome. Location is close to water but not a big risk to flood.

Here is the big question: why not rent a place instead?
Answer: I currently live in a townhouse (no place for boat) but the town house is perfect for our needs (Near hospital where her mom is getting chemotherapy each week, near hospitals where we have been working, near city stuff my wife likes, near hiking trails I like and we have a nice garage that stores my kayaks etc.
This “country house” would be mostly a consumption item for me. At some point (perhaps now?) she and I will have to agree on spending some $ for stuff we don’t need for fun. (current situation: summary: zero debt, no mortgage, no kids, net worth >6M, spending 120-160k per year. working part time with plans to retire in 1-5 years)
I am perhaps not being totally fair in my description of wife. She is amazing person, and certainly a big part of why we are wealthy.

[Mitchel674]

She is:
1. smart, realizes the math on rent vs buy vacation house. She is almost as frugal as MMM
2. Thinks the cape is overpriced (it is, IMO, but it will not go down substantially, it will cool off, flatten, go up more slowly is my guess) (limited land area)
3. She would rather just own one home and she likes the city more than the country (city mouse vs country mouse)

The second house is like a bento box. Space perfectly organized. It was a down to the studs renovation and it looks amazing. It is small, but did not feel small. Perfect fishing “camp” yard is awesome. Location is close to water but not a big risk to flood.

Here is the big question: why not rent a place instead?
Answer: I currently live in a townhouse (no place for boat) but the town house is perfect for our needs (Near hospital where her mom is getting chemotherapy each week, near hospitals where we have been working, near city stuff my wife likes, near hiking trails I like and we have a nice garage that stores my kayaks etc.
This “country house” would be mostly a consumption item for me. At some point (perhaps now?) she and I will have to agree on spending some $ for stuff we don’t need for fun. (current situation: summary: zero debt, no mortgage, no kids, net worth >6M, spending 120-160k per year. working part time with plans to retire in 1-5 years)
I am perhaps not being totally fair in my description of wife. She is amazing person, and certainly a big part of why we are wealthy.

Your wife sounds eerily like my wife. Logical, rational and frugal. Mine is also amazing, but I cannot seem to convince her to spend the money on a lake house I know she would enjoy. She prefers to rent.

[Tim]

She is:
1. smart, realizes the math on rent vs buy vacation house. She is almost as frugal as MMM
2. Thinks the cape is overpriced (it is, IMO, but it will not go down substantially, it will cool off, flatten, go up more slowly is my guess) (limited land area)
3. She would rather just own one home and she likes the city more than the country (city mouse vs country mouse)

The second house is like a bento box. Space perfectly organized. It was a down to the studs renovation and it looks amazing. It is small, but did not feel small. Perfect fishing “camp” yard is awesome. Location is close to water but not a big risk to flood.

Here is the big question: why not rent a place instead?
Answer: I currently live in a townhouse (no place for boat) but the town house is perfect for our needs (Near hospital where her mom is getting chemotherapy each week, near hospitals where we have been working, near city stuff my wife likes, near hiking trails I like and we have a nice garage that stores my kayaks etc.
This “country house” would be mostly a consumption item for me. At some point (perhaps now?) she and I will have to agree on spending some $ for stuff we don’t need for fun. (current situation: summary: zero debt, no mortgage, no kids, net worth >6M, spending 120-160k per year. working part time with plans to retire in 1-5 years)
I am perhaps not being totally fair in my description of wife. She is amazing person, and certainly a big part of why we are wealthy.

The proverbial “It’s me or the dog. Sure am gonna miss you.”
Vacations for a month or a summer are a trip. Nesting instincts are difficult to change. Remember #3.

[jfoxcpacfp]

When you reach FI, spending becomes less about the math and more about the enjoyment. Of course, there are limits to profligate spending, but I don’t understand all of the angst about the math in this thread. I might if you were wanting to spend that much on NetJets but not on a piece of real estate that is still standing when you want to visit. But, then again, I don’t look at real estate as a consumption item and don’t understand that argument.

[Tim]

When you reach FI, spending becomes less about the math and more about the enjoyment. Of course, there are limits to profligate spending, but I don’t understand all of the angst about the math in this thread. I might if you were wanting to spend that much on NetJets but not on a piece of real estate that is still standing when you want to visit. But, then again, I don’t look at real estate as a consumption item and don’t understand that argument.

I just had someone come to my house and give me $32k for some real estate I have only seen once. It generates absolutely zero income. The paperwork was all in Spanish and I had no clue what I had my MIL sign. Not my money, it was the right thing to do. Not really sure MIL really understands.

It was not about the math or consumption. The spouse can actually just oppose spending anything at all on something they simply think is "worthless" or not going to be used at all. Sometimes the desired spending just hits a nerve. The "better half" has a definite right to an opinion. My wife made the choice, I would have held out for $35k. I kept my mouth shut. Spouse just needed to get rid of a PITA. Maybe just maybe the spouse does not want a PITA with making trips and doesn't fish.

Not about the math or even spending, just doesn't want another PITA from Tangler. At least she is giving him enough rope. So far he hasn't complained.
Congrats to the spouse.

[Tangler]

Regardless, she agreed to see smaller house this Friday. I suppose if it was 100% no she would (should?!) just say: stop.

[Kamban]

Regardless, she agreed to see smaller house this Friday. I suppose if it was 100% no she would (should?!) just say: stop.

All ears to see her reaction.