Vacation home/investment

[PI]

We have been thinking on and off about a vacation home (which will be also an investment) to go out of the busy city area a couple of weeks a month. However, we are also very busy with young children.  With kids activities that often happen on weekends, we may not really be able to get there too often once everything becomes in-person. But we also feel like we need to get out of the city and hope to have a place of our own instead of finding hotels/bnb.

Is this a bad idea for tenure track professors to try and get a second home?  What would be an optimal distance? We are also debating between country home with acreage (negatives - too quiet and nothing going on) or a nearby city (few hours away) with better access to large state parks. All in all, it seems stressful to just consider this option and find something. As an added note, we don't have any debts and feel that we can afford it. It is not clear if it is a good investment though.

Any  suggestions/warning based on your experience or someone you know of?

[Puget]

Assuming here you are in the US-- This seems like a terrible time to buy anything if you don't have to most places-- inventory is low, prices are high. Buying in what is almost certainly a housing bubble would make it a very bad investment. Plus, what happens if you don't get tenure or decide to leave for another job?

Also, it doesn't sound like you really know what you want yet. You say you don't want to rent, but why not? You could do a lot of weekend get-aways for way less than even a down payment, you wouldn't have to deal with the headaches of maintaining a house that sits empty most of the time, and you would have more variety. It sounds like you should at least try out spending weekends different places until you hit on someplace you know you want to return to regularly.

[Caracal]

We have been thinking on and off about a vacation home (which will be also an investment) to go out of the busy city area a couple of weeks a month. However, we are also very busy with young children.  With kids activities that often happen on weekends, we may not really be able to get there too often once everything becomes in-person. But we also feel like we need to get out of the city and hope to have a place of our own instead of finding hotels/bnb.

Is this a bad idea for tenure track professors to try and get a second home?  What would be an optimal distance? We are also debating between country home with acreage (negatives - too quiet and nothing going on) or a nearby city (few hours away) with better access to large state parks. All in all, it seems stressful to just consider this option and find something. As an added note, we don't have any debts and feel that we can afford it. It is not clear if it is a good investment though.

Any  suggestions/warning based on your experience or someone you know of?

I can't see how it really makes sense to think of a second home primarily as an investment. If you compare it to other places you could put your money, you are taking on far more risk. There are also likely to be extra costs associated with a second home, especially one you may not visit for long stretches of time. You'll probably have to hire someone to cut grass, shovel snow etc., for example and check in occasionally to make sure nothing has gone wrong.

Personally, I would concentrate on whether I wanted to have a vacation home and see any potential investment benefits as a possible bonus.

[Hibush]

If the second house gets your kids out of scheduled weekends into unstructured nature play, the time and money spent on it will have been worth it.

[Morden]

We have had a vacation home for over a decade, and its value has gone up substantially over that time. We love it.

But it's exhausting having two places to take care of; it's expensive to insure because it's empty much of the time; actually, it's expensive full stop because of utilities, taxes, etc.; and it means we don't go anywhere else for vacations because there is always something we need to do.

[Diogenes]

We are a childfree couple and have been close to doing this also- just waiting for the right house in the area we want. Our plan is to have it be our vacation home for now then our retirement home.
A couple big things you need to consider is the cost of maintenance of a second house (utilities, lawn, snow removal...) If you want to offset the cost when not using it, you should look into the ability for you to rent/AirBnB it. Many vacation areas are cracking down on short term rentals since AirBnB is taking so much of the rental stock off the market that the service class depends on.
Another thing to think about is the cost of selling if you need to. Generally, you have to prove the house was your primary residence for at least two years prior to selling if you don't want to pay sales tax on the property. That can be a huge hit.

[ciao_yall]

We have been thinking on and off about a vacation home (which will be also an investment) to go out of the busy city area a couple of weeks a month. However, we are also very busy with young children.  With kids activities that often happen on weekends, we may not really be able to get there too often once everything becomes in-person. But we also feel like we need to get out of the city and hope to have a place of our own instead of finding hotels/bnb.

Is this a bad idea for tenure track professors to try and get a second home?  What would be an optimal distance? We are also debating between country home with acreage (negatives - too quiet and nothing going on) or a nearby city (few hours away) with better access to large state parks. All in all, it seems stressful to just consider this option and find something. As an added note, we don't have any debts and feel that we can afford it. It is not clear if it is a good investment though.

Any  suggestions/warning based on your experience or someone you know of?

Consider doing short-term rentals in various places where you might want a vacation home. Easy to fix meals in rather than paying for restaurants all the time, plus you can adapt to your kids' preferences and energy levels.

You might find you really enjoy having your choice of places to go. Your kids, as they grow, might have changes in their interests that would make different places more appealing to your family as the years go by.

Or, you might find you really want to put down roots in a particular community, and your kids might appreciate the familiarity. You won't know until you have tried a lot of options.

[mamselle]

The clearest situation I can recall that made sense to me, on the outside looking in, was one of my thesis readers who celebrated being named a full professor by buying a second home in a much-vaunted getaway area in my state.

This meant they were older, had been saving for years, and had done much of what is advised above in terms of trying out different locations, etc.

They were also an architecture history/domestic material culture couple who knew exactly the value of the place they bought, its surroundings, etc., and who planned, also as noted above, to make it a retirement home, with timeshare rentals in-between then and the time they bought it.

N=1, of course.

M.

[jimbogumbo]

I agree with Puget completely. Now is not the time. Just use VRBO or Airbnb until the market inventory catches up to demand.

[Anselm]

How about just plain undeveloped land?  You can always camp out there and the land itself can be an investment.  My parents had a vacation trailer in a big campground.  I remember always having to work during every visit.   It did not seem worth it to me.

[mythbuster]

My grandparents owned a condo in a beachside town approximately 4 hours from where the greater family lived. Being a condo meant the upkeep was generally taken care of, but there were big issues within the family over whether this was an income property or a vacation home. Grandpa wanted to treat is an an income property- which meant having it rented out to non-family members during the peak seasons. Grandma wanted it as a vacation property for the entire family to use for free.  As you can predict, arguments arose when some family member would ask to "use" the unit during the summer- negating the income potential during that time.
  So decide which you want in advance. If you want to rent it out part of the time, you need to decide in advance when those times will be and when you want the place for yourself.
   My mother never wanted a vacation home because then she said she would feel obligated to always go there! I think the experience with the family beach condo (sold off once the grandparents passed) influenced her thinking on this.
   

[mamselle]

Also, there may be strong gender divisions on this, if the family involved sticks to certain entrenched expecations.

It's harder to pack up a home and move temporarily to another one, and pack up all the kids, if kids there be, pets likewise, etc.

Those jobs have traditionally fallen to the female side of a family, and weigh in at about 10 x the amount it might take the male to pack for themselves and move a few boxes of groceries in.

Just thinking...this may not apply to your family, but I can see it being an unspoken issue if said female is just assumed to be taking on all those tasks.

M. 

[spork]

Max out your annual 403b and Roth IRA contributions first.

[Hegemony]

It won't be an investment. At best it may earn back some of its keep, if you are in a popular area for AirBnBs and can navigate the hassles. This would include having to go in and clean between visitors, or hiring someone reliable to do it.

I do have a second house, and I know a lot of academics who do. They're generally more senior in their careers. It is definitely most important to fund your retirement abundantly before you contemplate a second home. Then you have to regard the home as a luxury, like a boat. It consumes money. Ours is worth it, but it's important not to regard it as an investment. It could increase in value and give you a profit (or allow you to break even) decades from now — but also it could not.

[mamselle]

Now remembering several such scenarios on the old forum, too....people traveling to and from houses given the season, or where they were teaching, etc.

Sounded very work-y to me, and I know I remember that a couple of their houses, when sold, didn't turn a profit; in one case just went for taxes.

Sorry--Wet blankets and all that...

M.