Vacation home/investment

[downer]

The people I know with hoiiday homes often share ownership with family members, so different family members can visit at different times, and share the work on upkeep. They also sometimes allow friends to stay.

If you wanted an investment, you might try letting it out on Airbnb yourself when you are not using it. But that would take a lot of coordinating with/employing others to prepare it between visits of guests. Quite likely more trouble than it is worth.

There do seem to be 2 different sorts of people. Those who like to go to the same place every time during their downtime, and those who want to explore new places. I'm in the latter group. I'd get bored going back to the same place regularly.

[PI]

Thank you all. These are great suggestions and comments. The whole idea was due to COVID and being stuck in a city with little access to nature, wanting to get closer to nature for us and the kids. Investing in land was another thought. Lots to think here... Once we come out of COVID and begin traveling again, these thoughts may vanish.

[mamselle]

If that's the issue, rent a trailer or buy a large tent, maybe?

M.

[Ruralguy]

Beach communities are expensive, but there's a big differences between, say, a condo in a southern beach town and a house in the Hamptons and both of these are very different from various mountain resorts. Any of them *can* be an investment, but whether they are depends on demands in that region, etc. and what you have to spend. You can probably track the usual real estate websites for a while to get a sense of appreciation.

In any case, my wife and I have a version of the former (condo in southern beach town, outside the super-luxury areas). I'd say it can be manageable in terms of price and mortgage and all, but probably only if your primary home isn't too burdensome. Also, you'd likely have to be a dual income family. Also, we only have one child, so only have to deal with one kids activities. If you have several kids with differing interests, I can see how it might almost be worthless to you to have such a home since you'd rarely be there. Also, if you don't like a certain area, such as the beach, so much that you'd want to go there more than anywhere else, its probably not worth it. Keep  in mind that most condos will have very large outlays every few years for various repairs (probably at least 10-20 K or so). Then again, so would a lot of primary homes.  Our place is about 3 hours from our regular home. I think more than 4 probably makes it not so worth it for weekend trips. Though we don't formally share in the upkeep , etc., we have let some close friends occaissionally stay there when we aren't there. It probably has gained in value more than what we have spent on such outlays, so, in that sense, a profitable investment, but honestly, putting money in boring REITs would be a considerably better, or at least less risky, real estate investment. 

[Puget]

Thank you all. These are great suggestions and comments. The whole idea was due to COVID and being stuck in a city with little access to nature, wanting to get closer to nature for us and the kids. Investing in land was another thought. Lots to think here... Once we come out of COVID and begin traveling again, these thoughts may vanish.

I'm all for contact with nature, and I would personally hate feeling trapped in a big city. But don't make decisions based on the past year-- a lot of people have done that (buying sub-optimal houses at inflated prices far from work just to get into a house and on the sometimes mistaken theory they would keep working from home) and are now regretting it. See if you still want to to this in a year, after renting in your possible locations.

Also, if you want to spend time in nature, there's no better way than camping (or better yet backpacking)-- You'll spend your weekends truly unplugged and spending time together outside instead of doing maintenance on the second home.  And its virtually free! Well, after the initial gear investment, but that's small potatoes compared to a second home. Do invest in quality gear so you have a good experience -- a leaky tent or not warm enough sleeping bags will ruin it for everyone. Do it right and you'll imprint your kids for life (worked on me anyway).

[Vkw10]

Thank you all. These are great suggestions and comments. The whole idea was due to COVID and being stuck in a city with little access to nature, wanting to get closer to nature for us and the kids. Investing in land was another thought. Lots to think here... Once we come out of COVID and begin traveling again, these thoughts may vanish.

Check out state park cabin rentals. A cabin usually costs my family about $500 for a week. Two bedrooms, bath, kitchen, living area, porch, grill, and nature galore. We reserve cabins several months in advance, for familial visits to SC, KS, and TX. Many of the parks we visit have lakes for swimming, kayaking, and fishing. Some include linens and basic kitchen gear (SC and TX).

[Hegemony]

In favor of the idea, I'll say that our country home has been a sanity-saver in these last months — and in fact always. The house is on the edge of a lovely wilderness and in fact I just spent a good portion of the evening in the rocker on the porch admiring the fireflies and listening to the frogs.

Other benefits: you know exactly what you're getting — what facilities are in the kitchen, that there's a washing machine, what amenities are nearby, etc. You can revisit old favorite haunts. You can leave stuff there (clothes, gadgets, whatever) between times. You don't have to pack a ton because you have plenty of stuff at the summer place. You don't have to clean within an inch of your life upon leaving or be charged a fee. You know it accepts pets, if you have pets. Your pets may grow very fond of it. You can develop ties with people in the community. And you can certainly still go other places — but you have one place you know you can always go.

It's a great thing to have if you can swing it. Just separate the luxury part from the investment part.

[PI]

So may great suggestions here.

Vkw10: State park cabins seem like a great idea. We had not thought about that. Will be trying that out soon.

We had tried camping in the past but it does not work well with our family- at least yet. We enjoy hiking in the wilderness though.

Hegemony: What you describe is what we are dreaming of. Wilderness, porch, rocker...sounds great. May I ask if you chose a place with a lot of land or just enough for privacy. How do you manage the upkeep of yard or land? Did you choose something closer to a small town center or in a very rural area far from the center of some (small) town? How far is it from your primary residence? Do you get there every weekend? Do you have school aged children? So many questions..

[clean]

Is this a bad idea for tenure track professors

Am I the first to note "tenure track"?  Now is not the time to invest in big, illiquid, second homes! 

After tenure, you can consider such things, but until then, it may well be a mistake.  You dont want to have your time tied up on a second property when you may need to be free to work on another paper.

[Hegemony]

Hegemony: What you describe is what we are dreaming of. Wilderness, porch, rocker...sounds great. May I ask if you chose a place with a lot of land or just enough for privacy. How do you manage the upkeep of yard or land? Did you choose something closer to a small town center or in a very rural area far from the center of some (small) town? How far is it from your primary residence? Do you get there every weekend? Do you have school aged children? So many questions..

Our house was chosen for us, because it is a house built by the ancestors six generations back, which I have known from a child and bought from a cousin. It is just at the edge of a small town and has acres of lawn, woods, and stream, and backs onto a wild area and farmland. And handily it is in a great small town within easy range of a great medium-sized town, and not too far from the state capital. Unfortunately it is a plane flight away from my job. In normal years we come for 8-10 weeks, spread out over the year, mostly a big chunk in the summer. We spent a year here on sabbatical and son spent the year at the local school, which was a great experience. Right now we are here for eight months, through some cagy arranging on my part. I have local friends who help look after it when we are not here, and hire a local gardener. It helps that everyone in town has known our family for umpteen generations, so they have been very welcoming and very helpful. But despitel the insular reputation of small towns, in this one, at least, I see them being welcoming to other newcomers as well.

Some friends of mine have their second home in Hawaii; others have a medieval cottage in a small village in the south of France; another has a condo in Seattle; another's second home is an apartment in San Diego. All those folks have made it work. But I think the key is to be solvent before starting — it's not something you want to have to stretch to do.

[mamselle]

The "southern French medieval cottage" made me smile.

A friend's parents recently sold them their "family cottage," the turret of a small walled city near Grenoble, originally set up for garreting troops, with a huge open central space that the mom (a large-scale sculptural installation artist, most often seen with a blow-torch on a scaffold in front of a colossal bronze abstract) filled with a mobile of white shells--thousands of them on white fishing lines, descsending to the floors below--and upon whose flat stone roof one could spread out sleeping bags and doze off under the stars.

The three days we spent there were enchanting, including the first morning, when, sent out to buy the day's bread supply, I got lost and wandered all through the spiral streets, down to the main gate and back up again, because there were five more identical towers, and we'd arrived at night, so I had to get oriented to find "ours."

The bread stayed warm until I got there.

M.

[PI]

@clean, I should have said tenured.

[clean]

@clean, I should have said tenured.

Ok, well that is solved anyway.

My next thoughts are these:
Financial.
Are you otherwise debt free?
Is your retirement savings where you think that it should be?
Is college paid for?
Do you have an emergency fund of 6 months (or more) of expenses?

Time/consistency.
Are you sure that this is where you are going to want to spend your vacation for the foreseeable future?  (once you buy this, there wont be money available for other things?  NO Cruise to Alaska, no trip to Disney World, no big Spring Break trips, no long Summer road trip to visit a dozen future college destinations, no camp the national parks with the kids.... This is it! 
Along those lines, while I am a huge Disney fan, the people who buy those Disney Time Shares have locked in their vacation plans To DISNEY for quite some time and what may be a fun trip for the 12 and under crowd is something different for the 14-17 year old crowd (that doesnt want to admit that that they HAVE parents, much less be seen with them).

But IF you Have the money, particularly if you dont have to borrow a lot (or at all), then if you have the money in cash, then that is your decision!  (remember, just because a bank is willing to lend you the money, doesnt mean that you 'can afford it!')

Good luck.

[lightning]

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.

^This^

Taxes are the main reason I never purchased a second home, even though I've had these exact same conversations with myself. Also, my dear old Dad lost his shirt on his money pit second home, so I'm in fear of being one of the unlucky ones, too.

I rent, even though I also have conversations with myself about how much money I have lost because I rent my summer abode.

[dismalist]

A dream of mine has long been this, https://www.youtube.com/watch?v=jSMwp4iRl2s&list=RDCMUC_-x5Cm8qwyGUAYVSfieEuw&index=2, more about cooking, and the larger location https://www.youtube.com/watch?v=LJ-BZjopP4I&list=RDCMUC_-x5Cm8qwyGUAYVSfieEuw&index=12, in the Italian Alps.

Alas, dreams must often remain dreams.