Talk to me about hidden costs of buying a vacation home

[Anonymous]

21:16- St Simons Island, GA

[Anonymous]

Many beach places are completely furnished so those cost may not be a factor. We pay HOA fees but that makes it easier to budget I think. You know what the cost are going to be.

[Anonymous]

Homeowners insurance requires the house be at 50 degrees all year so things don't freeze - so plan on that cost. Cable TV/ Internet is expensive in some places (e.g., Maine). We do have someone clean a few times a year before and after we use the house - it's actually pretty tough to clean everything as you are packing to leave and you don't want to come back to a dirty place. If you spend any long time there you will want your appliances - coffee maker, blender, etc. it is really like duplicating your other home. There are club fees for golf/tennis/swim. Kayaks cost $1500 each with paddles. This year we bought paddleboards. Great fun but about $1K each. We keep bikes and helmets there. We bought a boat - it's great fun there but an added cost. Real estate taxes are pretty high on vacation homes in popular locations. And we still take vacations elsewhere so that budget isn't lower.

[Anonymous]

Imagine all the places you could visit each month for the $ you are paying. I get the schlep factor but once your kids are 4 or so there will be a lot less gear to travel with. Unless you have family/emotional connections to a location or are a SAH who doesn't mind leaving your spouse alone for weeks at a time...

[Anonymous]

OP -- think about how many times you would actually want to make that 3 hr. trip (will it become 5 hrs. with traffic -- like OC, Md.?)? Even at 3 hrs., we just don't like the beach enough to want to do that every weekend. We love going to the beach and wish we could just go whenever we want... but when we really thought about the cost of owning vs. renting a few times a year, we simply could not justify it.

We've been going to OC for about 7 yrs now and we like it -- we know where to go for groceries and mini-golf and donuts. But, we also want the flexibility to try new places (either at a beach destination or to spend our vacation dollars at other places). OC/beach/boardwalk is o.k. while the kids are 0-10... but as they get older, we want to go to the Grand Canyon or Europe. We see that happening soon. By not owning a beach place, we have the flexibility to adjust as our interests change.

If I were you, I'd think about how much you expect to spend each year if you own (adding up the costs mentioned above), and then think about what kind of place you could rent and how many times you could go there. If you are thinking of living there all summer or going every weekend, then probably makes sense to buy. If you see yourself going for a few weekends in the summer -- maybe buying is more of a burden than it's worth.

The one thing for us where owning is superior than renting is that when you own, you always have the sheets on the bed when you arrive and towels in the closet -- you don't have to bring the ketchup and coffee. I really don't like packing so much to set up at our rentals... but, it's worth the effort given how much we save by paying only for the days we actually spend at the beach. (when you own, you are paying for the days you're not there as well). As for renting out your unit -- I'm not sure I'd want strangers using my beach house, so that may be a way to off-set the costs if you are o.k. with that. But, you are still locked into that particular building/unit/town. I prefer the freedom to say "let's go to ----- this year."

[Anonymous]

Op - we considered buying a second home when our kids were young and now that they are older (10+) I am very happy we didn't.

One reason is once they get a bit older, nice travel vacation are very possible but expensive. If you have all your extra money tied up in a second home and feel guilty about not using it all the time, you may not plan these vacations. In our case they are bonding experiences and learning experiences for our kids (and us).

Secondly if your kids get into any sports (and many do) your weekends will be filled with sports obligations. Our schedule now has multiple games every weekend and my daughter has practices friday nights. Dance, music etc can have the same effect. Even the summer get filled up with activities you don't imagine when kids are small.

I like PP analyisis - third paragraph is very good. Renting it out is a real pain if you think that is your backup.

[Anonymous]

Anonymous wrote:insurance.
caretaker (rather nice to have someone to check on the place periodically, especially after major weather events, and to notice if there are squatters or vandals).
General maintenance budget (painting, new roof every XX years, new HVAC every YY years, etc).
Yard service for both homes.

And by the time your kids are 8, you will have birthday parties, sleepovers, and games to attend on weekends. I don't think a child's schedule should truly rule the household, but it needs to be taken into account.

The reality is that you can do a LOT of nice vacations for the annual costs of a vacation home. And I have yet to see anything that convinces me that vacation homes are a good long-term "investment". And ocean-front property is a pretty big long-term risk with rising sea levels.

I agree with this. My father in law and a friend jointly bought a vacation home together (beach house) and while we have loved the vacations we have spent there, it has been a lot of work and trouble for both of them and I think he regrets doing it. Now his friend wants out and he can't afford to buy him out and they can't find a buyer in Florida. Do you really have the $$ to buy it and not have to rent it out? If so I would just use that money to rent a nice house for the couple of weeks each year you would want to go to the beach.

[Anonymous]

If you do it, get something within a 1-2 hours' drive. The shorter the better.

At three hours, you can't run out there for overnight very easily. One hour is no big deal.

Other expenses/issues: waste. We throw away tons of food because we either forgot to bring it home or decided it wasn't worth it or the cooler was already full of other stuff.

Depending on where you buy, satellite TV can be very pricey and cable may not be an option. Also, if you have a job that demands you be accessible, you are looking at costs for high speed internet, etc., which, again, depending on where you are may be very pricey.

Also look out for second home taxes. Our place is in West Virginia and they love to load up on the taxes for people who are not full-time residents. One of the many examples is that we recently got assessed a new emergency ambulance fee event hough we don't live there. It was higher for non-residents.

Also look at what there is to do around your second home. As the kids get older, not only will you have very limited time to go if they are in sports, but what they want to do may change as well. Make sure there is plenty to do.

Also make sure that, if you want a caretaker or housecleaner or whatever it is that there are people in the area. My friend has a place in Middleburg. He has plenty of help. My remote place? Nope. Not at any price.

You can buy something furnished (we did), but then you end up replacing it all anyway within a year or two.

Think it over carefully. If you really think it is for you, maybe even try renting for six months to see how it feels. I wish we had.

Signed,
Bought a place 2.5 hours away before we had kids and never ever get there now but unable to get DH to sell it.

[Anonymous]

Anonymous wrote:insurance.
caretaker (rather nice to have someone to check on the place periodically, especially after major weather events, and to notice if there are squatters or vandals).
General maintenance budget (painting, new roof every XX years, new HVAC every YY years, etc).
Yard service for both homes.

And by the time your kids are 8, you will have birthday parties, sleepovers, and games to attend on weekends. I don't think a child's schedule should truly rule the household, but it needs to be taken into account.

The reality is that you can do a LOT of nice vacations for the annual costs of a vacation home. And I have yet to see anything that convinces me that vacation homes are a good long-term "investment". And ocean-front property is a pretty big long-term risk with rising sea levels.

This.

Define "cost" OP. There's the opportunity cost of having to spend every vacation at the same well-trodden house.

[Anonymous]

Our place is out west and we basically use it for a few weeks in the summer. It's a great thing to have and has been good while the kids have been young (under 10). Now, as they are older, I'm excited for overseas trips etc. Still, I'm happy we have this family place in the mountains, but would be less happy if it meant no other exotic trips for the family.

[Anonymous]

On top of everything else that has already been listed -- please investigate very carefully the cost of insurance before you buy a waterfront home. The cost of flood insurance is going to double in many areas over the next few years. There are protections for residents, but the cost for second homes will go up more quickly, particularly for older homes that are not up to modern "code." I saw an article where a woman had calculated that in seven years, the flood insurance was going to have cost more than the value of her house. The problem is that, if you have a mortgage, the bank will require that you have it. Also, be aware that you will need separate wind insurance, in addition to regular homeowners insurance. Also, property taxes for waterfront areas tend to be steep. We had a waterfront home, and even with the old cheaper flood insurance, insurance and taxes were half of our mortgage payment (for a million dollar home). On the other hand, if you wait a couple of years, and can pay cash, you can probably get a steal on a waterfront home.

As others have mentioned, unless you are there at least twice a month, you will have to have a caretaker/yard service. If you don't have a caretaker, you will spend all of your time at the house doing the work yourself. Even if it's just meeting repairmen, etc. -- think about how much of that you do in your residence, and imagine cramming it all into a weekend.

We loved our house, and when dc was young, we spent a LOT of time there. However, once DC started school, we just couldn't use it enough to make it worthwhile. After I realized that, for the price we were paying, and the number of days we were there, we could have stayed at Georges V in Paris and had money left over, we decided it was time to get out. VRBO is now my best friend. The real epiphany was when we rented a house and I realized that I could just drop the key in the slot and walk away. Someone else was going to worry about where that hurricane is headed, and getting the dishwasher fixed and whether the roof is leaking. We haven't looked back. I may buy another second home someday, but only when I'm able to spend an extended amount of time there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We have a house on the Cape (Cod). We have a caretaker for the off season who checks on the house once a week. We leave the heat on low in the winter so have highish utility bills for a couple of months. We have a landscaper. We have a housecleaner in the summer (in addition to the housecleaner in DC, who we pay year round). There are periodic repairs (hot water heater, kitchen appliances, etc.), although we haven't had anything big happen in 10 years.

We basically live there in the summer so yes we are doing laundry or whatever but we would have to do laundry if we were home, or if we returned from a week long vacation somewhere. Unlike the PP, that doesn't bother me. I actually consider it more of a second home than a vacation home- we do go on vacations to other places.

Hey everyone: she does her own laundry so, there's that.

Huh?? I was only commenting on another post that you have to do "projects" and chores like laundry at both houses. I have not found that to be an issue because we would do laundry or grocery shopping or whatever no matter where we are.

Not the PP who posted the "hey everyone", but I think that poster was making a joke of the fact that you have a full time cleaner in both homes, a landscaper (not to mention caretaker) so, of course, you don't mind doing your own laundry. Unlike us peons who have none of that and therefore "mind" doing laundry amongst all the other drudgery tasks you pay other people to do.

Sorry - I guess I should have been clearer. I have someone who comes in every two weeks to clean. That is not full time. But it is, at least for us, a cost of having a second house, which is I believe what the OP was asking. And yes we have a landscaper because the house is 9 hours away and the lawn needs to be mowed even when we aren't there. So it's not a luxury, it's pretty much a requirement for a second home, unless it is one that you plan to be in every single weekend and want to spend the time while you are there mowing the lawn. I don't choose to do that in either house. Same with the caretaker - where we are pretty much everyone has one because you need someone to be checking to make sure there aren't any water issues, break ins, whatever. It costs us $60/month so I don't consider it an outlandish cost.

Bottom line - a second home, at least one that is not a short drive away, does require more outsourcing because you just aren't there to do all the work. That is a cost of having a second home, which was, again, the OPs question.

You may have chosen to manage your second house differently - good for you.

LOL

[Anonymous]

Anonymous wrote:On top of everything else that has already been listed -- please investigate very carefully the cost of insurance before you buy a waterfront home. The cost of flood insurance is going to double in many areas over the next few years. There are protections for residents, but the cost for second homes will go up more quickly, particularly for older homes that are not up to modern "code." I saw an article where a woman had calculated that in seven years, the flood insurance was going to have cost more than the value of her house. The problem is that, if you have a mortgage, the bank will require that you have it. Also, be aware that you will need separate wind insurance, in addition to regular homeowners insurance. Also, property taxes for waterfront areas tend to be steep. We had a waterfront home, and even with the old cheaper flood insurance, insurance and taxes were half of our mortgage payment (for a million dollar home). On the other hand, if you wait a couple of years, and can pay cash, you can probably get a steal on a waterfront home.

As others have mentioned, unless you are there at least twice a month, you will have to have a caretaker/yard service. If you don't have a caretaker, you will spend all of your time at the house doing the work yourself. Even if it's just meeting repairmen, etc. -- think about how much of that you do in your residence, and imagine cramming it all into a weekend.

We loved our house, and when dc was young, we spent a LOT of time there. However, once DC started school, we just couldn't use it enough to make it worthwhile. After I realized that, for the price we were paying, and the number of days we were there, we could have stayed at Georges V in Paris and had money left over, we decided it was time to get out. VRBO is now my best friend. The real epiphany was when we rented a house and I realized that I could just drop the key in the slot and walk away. Someone else was going to worry about where that hurricane is headed, and getting the dishwasher fixed and whether the roof is leaking. We haven't looked back. I may buy another second home someday, but only when I'm able to spend an extended amount of time there.

Here's an article about the flood insurance rate increases:http://money.cnn.com/2013/10/21/real_estate/flood-insurance/

[Anonymous]

We use VRBO and local realtors (for OBX) too and have so far had great experiences. Places we've rented usually run $122-300 a night (from an ocean condo in Sanibel to a 3 BR house in the SF Bay Area) and it's so nice to not have to worry about the house the other 51 weeks a year.

[Anonymous]

PP 16:31 here: That said we've done a RENTED second home at the base of the Shenandoah, we started with a cabin and then rented the nearby farmhouse. We had housemates who shared it with us and we enjoyed sledding, hiking, playing our music as loud as we wanted, having friends up for the weekend. We were in our 20s and I can't see that it would have been as fun with kids because of the planning and packing involved. When we got a boat it was hard to justify splitting our time. And now we just go to our friend's house where we keep our boat. Having housemates helped defray the cost but I wouldn't want to do it with kids.