Running the numbers for a beach house to make it worth it

[Anonymous]

If you are afraid of renting a condo/house at the beach for fear of troubles -- that will be corrected when you call the property management team -- I do not think you are ready to handle ownership of a house where there are no property managers to call.

You are certainly better off renting UNLESS you plan to rent it out for the weeks you aren't there AND you plan to move there for a significant amount of time when you retire. Most people cannot project that far ahead b/c their will be changes in what they want or need in the intervening years. We thought about a summer TH in OC when we were first going there... DH tends to get very excited about these ideas. Thankfully, we didn't b/c after going there for 9 years, we're ready to go somewhere else. And we might not beach vacay at all b/c we want to take the kids to international destinations. As your family ages up, your desires and plans change. What was once exciting or comfortable becomes boring/BTDT. Keep your options open.

[Anonymous]

You can't view owning a beach house a an investment. It's a luxury, period.
We own one (small, not fancy) and we love owning it. But it's how we choose to spend our discretionary income. That's it. It's not an investment. It costs us money each year.

We chose buying over renting because we wanted to be able to pick up and go any weekend. We wanted our retired parents to be able to spend time there (and they would never have purchased the place themselves). We wanted to be able to host other friends there. We wanted to leave our stuff there and not have to cart anything to the beach when we decided to go. Psychologically owning it (vs renting) makes it feel like our haven away from our crazy lives/jobs in DC.

[Anonymous]

Anonymous wrote:You can't view owning a beach house a an investment. It's a luxury, period.
We own one (small, not fancy) and we love owning it. But it's how we choose to spend our discretionary income. That's it. It's not an investment. It costs us money each year.

We chose buying over renting because we wanted to be able to pick up and go any weekend. We wanted our retired parents to be able to spend time there (and they would never have purchased the place themselves). We wanted to be able to host other friends there. We wanted to leave our stuff there and not have to cart anything to the beach when we decided to go. Psychologically owning it (vs renting) makes it feel like our haven away from our crazy lives/jobs in DC.

Exactly. I looked into buying one as an investment and it is a terrible idea. If you can afford to lose money on it, than go for it. Otherwise just rent a house. The earlier poster was correct regarding older kids. If you have kids, when they are teenagers they will not be able or want to go to the beach with you very often. They will have sports, trips, internships, jobs, girlfriends, etc.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Drive to the beach is 2.5 hours. This is the DE beaches.

We always stay in hotels when we vacation because I have always been concerned that if we rent a house for a week and there's some issue with the house it would totally ruin the vacation, whereas if there is an issue with a hotel room you can just move hotel rooms. Hotels just seemed easier and they have more reviews.

Re: renting it out to friends and family, we'd be willing to do that but we don't have any family who would be interested in renting it out (they all live on the West Coast and only vacation in the same places). Friends might be interested but I wouldn't be able to count on it.

Then there's the intangibles of having a comfortable place to spend time when we need a change of scenery, which is priceless in my opinion.

We're not very adventurous vacationers and tend to mainly vacation at the beach anyways.

This has never happened to me or to anyone I know. If this is a concern, you definitely don't want to own a house since it will be your time and expense to deal with it.

THIS.

At a minimum, you should rent the same house for the entire summer and see how much you use it. That will answer some of your questions. We have a house three hours away on the Jersey shore, and use it every weekend May through September and at least once a month otherwise.

[Anonymous]

I don't know if you have kids but I bet they will fight you tooth-and-nail over those '68' days. Who wants to be dragged away continuously?

[Anonymous]

OP, I have waterfront property in Bethany - 2 bed, 2 bath condo. The community also has a golf course, swimming pool, tennis courts, basketball and workout facility. The monthly cost, including everything (mortgage, insurance, condo fees, electric, water which is high in DE, sewer and internet - we don't have cable because it's too expensive) is less than $2k per month with a 15 year mortgage. I think we were required to have 25% down to get a loan because we have a mortgage on our house here and we didn't want to roll them together. But most condos I've seen in the Bethany area run in the $200k - $250k range. Most repairs are covered by your condo fees, so your repair cushion doesn't have to be that high.

One thing you didn't consider is that when you stay in a hotel, you are eating out a lot. Having a place where you can cook is a big cost savings.

[Anonymous]

Anonymous wrote:

We chose buying over renting because we wanted to be able to pick up and go any weekend. We wanted our retired parents to be able to spend time there (and they would never have purchased the place themselves). We wanted to be able to host other friends there. We wanted to leave our stuff there and not have to cart anything to the beach when we decided to go. Psychologically owning it (vs renting) makes it feel like our haven away from our crazy lives/jobs in DC.

OP here. I agree with everything you wrote above, those are many of the reasons we would like to have one too. In addition, we plan to retire to the beach house as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Drive to the beach is 2.5 hours. This is the DE beaches.

We always stay in hotels when we vacation because I have always been concerned that if we rent a house for a week and there's some issue with the house it would totally ruin the vacation, whereas if there is an issue with a hotel room you can just move hotel rooms. Hotels just seemed easier and they have more reviews.

Re: renting it out to friends and family, we'd be willing to do that but we don't have any family who would be interested in renting it out (they all live on the West Coast and only vacation in the same places). Friends might be interested but I wouldn't be able to count on it.

Then there's the intangibles of having a comfortable place to spend time when we need a change of scenery, which is priceless in my opinion.

We're not very adventurous vacationers and tend to mainly vacation at the beach anyways.

This has never happened to me or to anyone I know. If this is a concern, you definitely don't want to own a house since it will be your time and expense to deal with it.

OP here. There is a huge difference. If I'm renting a beach house and there is a problem on my vacation, who knows when the owner is going to fix the issue and it could very well ruin my limited vacation time there. That's why we feel hotels are better for a weekend or week away. If I own a beach house and there is a problem, I can take care of the problem ASAP.

[Anonymous]

I think you guys should try vacationing in a beach house before committing to buy one. The fact you're concerned about something going wrong in a rental suggests you might find owning a house a bit stressful.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Drive to the beach is 2.5 hours. This is the DE beaches.

We always stay in hotels when we vacation because I have always been concerned that if we rent a house for a week and there's some issue with the house it would totally ruin the vacation, whereas if there is an issue with a hotel room you can just move hotel rooms. Hotels just seemed easier and they have more reviews.

Re: renting it out to friends and family, we'd be willing to do that but we don't have any family who would be interested in renting it out (they all live on the West Coast and only vacation in the same places). Friends might be interested but I wouldn't be able to count on it.

Then there's the intangibles of having a comfortable place to spend time when we need a change of scenery, which is priceless in my opinion.

We're not very adventurous vacationers and tend to mainly vacation at the beach anyways.

This has never happened to me or to anyone I know. If this is a concern, you definitely don't want to own a house since it will be your time and expense to deal with it.

OP here. There is a huge difference. If I'm renting a beach house and there is a problem on my vacation, who knows when the owner is going to fix the issue and it could very well ruin my limited vacation time there. That's why we feel hotels are better for a weekend or week away. If I own a beach house and there is a problem, I can take care of the problem ASAP.

Sorry, that's still whacky.

[Anonymous]

"I can take care of the problem ASAP."

Why? Because you're a contractor/plumber/electrician/roofer?

"We chose buying over renting because we wanted to be able to pick up and go any weekend. We wanted our retired parents to be able to spend time there (and they would never have purchased the place themselves). We wanted to be able to host other friends there. We wanted to leave our stuff there and not have to cart anything to the beach when we decided to go. Psychologically owning it (vs renting) makes it feel like our haven away from our crazy lives/jobs in DC."

The same is true of boat ownership. We could be renting one every summer weekend for less than the cost of ownership.

[Anonymous]

Anonymous wrote:The fact you're concerned about something going wrong in a rental suggests you might find owning a house a bit stressful.

OP here. We've owned our SFH for almost 10 years. Previous to buying our SFH, we rented condos and townhouses for 6 years. I disliked renting and there were lots of problems that came up, and the owners did not fix them in a timely manner. If problems come up in a SFH, we are the ones making the decisions about fixing things. There's a huge difference.

[Anonymous]

I think one way to look at it is figure out the cost of interest over the life of the loan for the beach house. Now add three percent of the purchase price for repairs. Add the hoa. Now figure out how many nights in a hotel this is. I'm willing to be that it would take 15 plus years to recoup the money spent on the hoa, interest and maintenance. A beach house really isn't a good investment. It's a luxury.

Ok I looked up the interest and you'll spend 231k on interest over the life of a 30 year mortgage. That's 1,156 nights in a 200 dollar hotel room. At 68 nights a year it will take 17 years to break even on the interest since you aren't renting the place out. Yes, the 200 dollar hotel room will increase in cost so you need to do the math, which should reduce the 17 years to I would guess, 10 just for the interest.

[Anonymous]

OP, where are you finding a good house in DE for $300k or less? I was just looking at places in Lewes/Rehoboth and couldn't find anything good near that price. Yeah there are good new builds on the other side of 1, but that's not really a "beach house" IMHO. I would want a beach house where we can walk/bike to the beach vs drive.

[Anonymous]

Anonymous wrote:OP, where are you finding a good house in DE for $300k or less? I was just looking at places in Lewes/Rehoboth and couldn't find anything good near that price. Yeah there are good new builds on the other side of 1, but that's not really a "beach house" IMHO. I would want a beach house where we can walk/bike to the beach vs drive.

OP here. We're not looking for walking/biking distance to the beach, that's just not in our budget. We want new construction or relatively new, within a 10 minute drive of the beach. We don't like being on the beach during the time of day that most people are there anyway, so parking shouldn't be an issue--we'd go early in the morning and go back to the beach house for lunch and naps, then back to the beach after dinner.

There's plenty of inventory under 300K that would work for us. We're looking for a community that includes all lawn/exterior maintenance in the HOA fee and has plenty of amenities in the community, such as a pool, clubhouse, etc.--something completely different than our current SFH neighborhood that has zero amenities, is older and doesn't have the updated features, etc.