Do you own a second home or a vacation home?

[mommyoffive]

Do you own a second home or vacation home?  Or land? 

Tell me your story. Pros or Cons?  How did or does it work for you?

[SKL]

I do not even own 100% of my one house, LOL.

I barely have what it takes to keep up the house I live in.  Plus, when I travel, it's fun and convenient to stay in hotels or b&bs.  Different every time, and less work.

[Faith-manor]

We have a 2nd home. It is for multi- generational living, and just outside a metropolitan area with a lot of job prospects for all of our adult kids. It is home for now to our daughter, Silk, and grandsons while they save for a home of their own. It has definite vacation home qualities, but its main purpose is our eventual retirement home, and a place for the grandmother's to escape the extreme winters here. Even when we get rid of our Michigan place, it won't be permanent for us for a while because we want to travel, and do a lot of vancamping. So it will be a while before it is our main home, but it may eventually have my mother there full time, and the boys coming and going if they take jobs in the area.

We can only afford it because we are soon done paying for college for the boys, and our place here has been paid off for a long time.

[JustEm]

I wish! I have a 5 year plan to own a rental property that could potentially be used for our vacations. Haven't decided on that yet.

[Spryte]

No, so you may not want my thoughts. 🤣

We have considered it, and most of my extended family does, so here are my random thoughts on the prospect.

DH and I rarely prefer to travel to the same area twice.  With the exception of trips to the area that’s my chosen “home,” we tend to want new places and experiences, and have decided that a second/vacation home doesn’t suit our travel desires. If we had unlimited funds and PTO, and could do both, might be a different story. That’s a maybe. I’m not convinced. Though with Covid, I see the appeal more than ever of a driving distance vacation home for a getaway retreat.

We have friends and family with vacation homes, and I grew up with constant visits to extended family’s mountain and beach vacation homes, and there is something sort of magical about our trips to those homes in my memory. My family that makes good use of their second and third homes do enjoy them, no question about it.  But they also traveled extensively on their boats, and took annual vacations not related to any property, so their extra homes did not tie them down in any way, either. None of those homes were used as rental properties, when vacant they just had a local caretaker check in on them, but to be honest my family is full of the types that enjoy creating a sort of oasis in a home, so their “vacations” often included lots of extra home projects that I, personally, don’t find appealing.  And hiring out all the work to create that type of environment would be out of DH and my reach, with kids, etc.  The kids in those families all grew up to have more than one home, but one uses hers as a vacation rental property, and the property manager does all the upkeep. The others use them as second homes and shift back and forth according to their work needs.

I’m more of a see something new, get out of the domestic environment vacationer.  I prefer traveling around, camping, or if not those then give me more resort type options and spoil me, hahahaha!

 

[Junie]

My aunt and uncle bought a second home in the college town where their kids went to school.  They had four kids who went to the same college over a period of about 10 years.  They did the math and found that it was cheaper than paying dorm/rental fees.  They also rented out a bedroom or two to their kids' friends.

I believe they sold the home when the last child graduated and I'm pretty sure they made a nice profit.

So, they saved money per semester in dorm fees, had some income from bedroom rental, and sold the home for a profit.  I think it was definitely a win for them!

[Faith-manor]

1 minute ago, Junie said:

My aunt and uncle bought a second home in the college town where their kids went to school.  They had four kids who went to the same college over a period of about 10 years.  They did the math and found that it was cheaper than paying dorm/rental fees.  They also rented out a bedroom or two to their kids' friends.

I believe they sold the home when the last child graduated and I'm pretty sure they made a nice profit.

So, they saved money per semester in dorm fees, had some income from bedroom rental, and sold the home for a profit.  I think it was definitely a win for them!

I wish our sons had all majored in things that would have allowed them to attend the same university! It would have saved us a ton to buy a cottage and put them up in it, then sell after the last one graduated!

[TexasProud]

Our 2nd home is our 5th wheel.  We did not want to get tied down to one location. Plus, it cost 30,000 as opposed to 300,000 or more. 

[Carrie12345]

We’ve seriously considered it (for family members to live or vacation, not ourselves,) but no. We’ll probably even have one final “maybe” moment and still decide no, lol. 

We will eventually get a camper though. I grew up with one parked in one campground, but I want to move around a bit.

[popmom]

20 minutes ago, Junie said:

My aunt and uncle bought a second home in the college town where their kids went to school.  They had four kids who went to the same college over a period of about 10 years.  They did the math and found that it was cheaper than paying dorm/rental fees.  They also rented out a bedroom or two to their kids' friends.

I believe they sold the home when the last child graduated and I'm pretty sure they made a nice profit.

So, they saved money per semester in dorm fees, had some income from bedroom rental, and sold the home for a profit.  I think it was definitely a win for them!

We did this, too. We have no regrets. 

You do have to pay capital gains on that nice profit though.

ETA: you do have to have a good fund for repairs. There is always something. We had to replace the heat pump a few years ago. I think though that all of the money we have spent on improvements will help offset capital gains.

Edited August 20, 2021 by popmom

[HS Mom in NC]

We bought a second home this spring.  It's an investment.  Oldest is currently disabled and she and her husband live in it while she's going through extensive diagnostics/treatment and her husband goes back to school.  Then she'll go back to school when she's functional. It was better than continuing to help her with rent, which we'd been doing for the last couple of years.

[Frances]

We’ve considered it for many years, most likely a second home on the coast. I’d say two things have held us back. My husband is capable of doing all home repairs himself and has spent considerable time on our our current home, as it’s older and we’ve slowly completely remodeled it. So the idea of adding more of that type of work to his plate isn’t very appealing. But when you know you can do the work well, it’s hard to pay for it and trust someone else to do a good job. At this point, he’d probably rather buy land and build it.

For me, the main issue is that our state has a very serious housing shortage and housing is very expensive. So our buying a second home in the coast would just add to the problem. The problem is especially acute for those that actually live and work on the coast full-time. So many homes have been bought for second homes and vacation rentals, that it leaves residents really struggling to find affordable housing.

Now a second home that we planned to rent full time (not as a vacation rental) could still be a possibility as a revenue stream. He’s talked about possibly retiring early, so then he would have more time to manage it. And it wouldn’t have my issue with adding to the housing shortage.

[Carol in Cal.]

We do.  We got it in 2013.  It was something we had not planned on.

We love to visit new places and see new things, but also there is this one place, that I used to vacation near as a kid, that I always LOVED.  Like, I don’t even have to DO anything or read a book there—just being there makes me very happy.

And in 2010 or 2011 I was online looking for a cabin to rent there for a week’s vacation when the cabin my grandparents used to rent popped up, but not for rent—for sale—and I was shocked at how low the price was.  Interest rates were very low back then, too, so payments were uniquely affordable.  We missed out on that place but started looking at others, and slowly learning what was important to watch out for in that area.  I figured out that prices had dropped in half after the stock market crash in 2008/2009, and luckily for us they stayed low for quite a while while we got up to speed. Interest rates stayed low, too.  So this turned out to be probably the only time in my life when we could make this purchase.

It has been wonderful.  When I was a kid we only visited during the hot summer, but now we love it year round.  One thing that is wonderful about it is that you don’t have to leave by a check out time.  So that whole thing where you basically lose the first and last day of any trip simply does not happen.  I can drive up after work and settle in late at night and be there first thing the next morning, and then not leave until 7 or 8PM the last night so I don’t miss those days.  Also, since it’s a year round place, last year when the SIP order came down I packed up my business and moved up there for months, which was utterly magnificent.  We are delighted that we did this.

In terms of costs and such—it’s a much harsher climate that our home, so there is more upkeep.  Also it has a septic system so we have to maintain that—not free and not always easy.  Internet is not of the quality as at home nor is comparable internet available at all.  

OTOH, it’s a very liveable year round kind of place, with a big basement, plenty of larder room, a garage that lets into the house, and a deck with beautiful sunset views—nothing that we have at home.  Double paned windows and a heat stove make it cozy even without power and it has a whole house generator that we used intermittently when the power goes out.  Key for me is that the drive is reasonable for just a weekend at 3 to 3 1/2 hours each way.  If it were 5 hours we would not use it enough for the purchase to make any sense.

The only problem is that we figured on selling it right before retirement, but we don’t want to sell it, so we can’t retire, LOL.  But we are working on that now.  We will figure it out.

ETA:  Don’t assume ANYTHING about infrastructure.  Check on all the things you normally take for granted—garbage pick up, internet, electrical service/outages, water quality and supply, heating systems, land clearing requirements, fire safety, medical services and distance to them, snow plowing, internet, TV, wildlife management (including predators), controls on gunfire and animal waste, etc.  Talk to people.  Take your time.  You probably don’t know what you don’t know.

Edited August 20, 2021 by Carol in Cal.

[Excelsior! Academy]

3 hours ago, SKL said:

I do not even own 100% of my one house, LOL.

I barely have what it takes to keep up the house I live in.  Plus, when I travel, it's fun and convenient to stay in hotels or b&bs.  Different every time, and less work.

This.

[Resilient]

We did.  We sold it a few years ago, and I miss it all the time.  The drive time was too long for us to take advantage of it often enough to make the monthly expense doable when we had a financial setback.

The benefits were

• being able to get away reliably without having to make reservations, especially in high season
• not having to pack clothes and knowing what was there
• being in a completely different scenery that I found energizing and restful at the same time
• being able to be hospitable to others who needed a break from normal life, or a place to stay for awhile
• being able to get away from my own life when I needed a break, either alone or with family or friends

The takeaways were

• too far...4 hour drives were too much and forget about holiday weekends
• natural disaster risk (fire, flood/tsunami, earthquake)
• expense even when we were not using it
• maintenance--you still have to replace roofs, mow lawns, pay bills, vacuum
• lack of variety, which wouldn't have been an issue if our money tree hadn't died and we could afford to go elsewhere

If I could get it back, I would.  It's doubled in value since we sold it, so that isn't going to happen. I can't even afford to rent it for a week!

One other point: a second piece of real estate is not really a second "home"--it's a vacation home. So being away from my primary home too much didn't allow either place to be truly home as it was disruptive to community life.  

 

[Beth S]

I can't help but chime in.  Very Strong Pros AND Cons.

We just celebrated 100 years of our extended family's ownership of wooded property in a remote area in the northern US.
5 very rustic, 90 year old cabins, each roughly the size of a 2 car garage.
28 of us gathered.  We had an absolutely amazing time together.
However, we spent 1/2 a day coming up with the solution for the failed concrete block wall of one cabin's basement.
It's about to collapse.

Problems with Plumbing, Electrical, Septic, Roof, Downed Trees = we've had it all.
Ownership Issues have splintered the family in various ways over the entire 100 years.
We have drawn up legal documents, and to date, have a loving relationship with the current group involved.

***
Long story short = It is amazing.  It is overwhelming.  Both.

I think the MUCH easier alternative is to rent a big AirBnB to host the extended family.
No Matter What . . . it is cheaper than ownership.
Rent your fun = the common mantra of the personal finance community.   😉

 

[katilac]

I don't have a vacation home, but I do have a weekend camp. It's a cabin in the woods with a bunkhouse, on about 23 acres, two hours door to door from our house.  We are co-owners with my sister. 

There are specific problems related to co-ownership. You have to work through different ideas and desires regarding how much to improve it or not, how often to have company, and so on. We went through a period of time when my sister wanted to share the cooking when we were both there, but we had very different ideas on the desired elaborateness of meals. I want to work less at the camp, not more, lol. 

Then the standard things: sometimes you have to go just to do maintenance, unless you can afford a caretaker. People will ask for invitations. It's money you can't spend elsewhere. 

It was wonderful when my kids were younger, we spent lots of time there and I loved that they were outside all the time. They had a lot of independence and loved going off on their own (they had whistles in case they got hurt and needed help). Of course we spent tons of time outside as well. Four-wheelers, s'more over the fire, I think they'll have some great memories.  And the cost was substantial but not prohibitive; I'd say we probably didn't spend more than people whose kids are in travel sports, for example. 

Once they hit the tween/teen years, we couldn't go as often because they had a dang social life, so it was hard to be paying that note every month when we weren't out there enjoying it. When we started paying for college, I had many moments of wishing we had that money, lol. And we were making many trips to see dd at college, so it was still hard to get there. 

In between work travel and some random crises, we still haven't been that much in recent years, but we do hope to change that. I'm going to try and be intentional about planning trips this fall (it's unbearably hot right now). I'm thinking it will actually be great to have some getaways when it's so hard to vacation. 

So, my thoughts on the long-term: 

I personally wouldn't want a vacation home or weekend property if it really constricted me financially, and I wouldn't want it to have to be my one and only vacation for the year.  My ideal vacataion does not involve cleaning, cooking, or maintenance, lol. Closer is better imo; for a weekend place, I find even 2 hours is a bit on the long side and definitely would not want it to be longer. On the plus side, you can almost always sell such a property, it's not usually a forever decision.