Do you think a vacation home is a good investment?

[Anonymous]

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Anonymous wrote:With hurricanes and rising tides beach property seems really risky to me. I think people also often buy when they have little kids and then find with other kids that they can’t really use it due to sports and other commitments. The people I know who use them regularly have kids who are kind of introverts and/or don’t do sports or theater or dance or anything like that.

I’ve always found it odd that people list climate change as a reason not to buy a beach house while ignoring that such a huge portion of our GDP and infrastructure are based in coastal cities.

If climate change disaster happens, we’ll all have a lot bigger problems than just a beach cottage being wrecked.

Live your best life now.

But you can "live your best life now" by just choosing to rent when you want to go to a beach cottage/vacation. Plenty of excellent choices to rent and then you don't have to spend the other 50 weeks of the year stressing about maintaining the home. And you can invest your savings, since you don't have a money pit to maintain.

Did you read the full post you replied to? I think not.

DP but it seems silly to say if I put $300k into coastal RE I am no more exposed to climate risk than if I put $300k into a total market index.

Yes climate change is bad for the economy (that is the whole reason institutional investors support ESG as a tool) but it’s clearly worse for someone who might lose their vacation home than for the average person.

That's a claim you have no evidence for.

Beach homes go underwater, so do coastal cities. Water don't G.A.F.

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you do think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

I meant this, sorry:

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you don't think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

Insurance policies are disappearing right and left on beach houses now (or having skyrocketing rates). Yes, climate change will affect the indexes but there will also be growth industries mitigating climate change. If it's a single mass catastrophic event, sure, we'll have different issues and you'll lose your beach house and everything else and won't care a bit.

Not saying cities won’t be underwater, but Seattle and our 2nd island home will be fine.

I'm not sure I'd call living in Seattle's heat dome fine. But nowhere is really fine.

Seattle’s “heat dome” is like a week of summer weather everywhere else in the country. The dome this week was cooler than our trip to Maine this July.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The negative naysayers who jump on here making vacation homes seem like such a drag to own are transparent airbnb vrbo grifters. Or poor people who hate that they know owning a second home is a signal you've made it. And lacking one makes you feel poor.

You sound crazy.

I’ve owned two houses before. It’s a pain in the ass.

I grew up with vacation homes and we have owned one for over 20 years. Pain in the butt sometimes…..sure. But wouldn’t trade it and the experiences for the world. It’s like Range Rover owners complaining their truck is always at the dealer for service issues……but they trade in for the new one when it comes out. Or private school parents complain about tuition……but their kids are private school lifers. People complain. Rich people complain. End of the day vacation homes are awesome. And every investment portfolio should have some real estate. Only owning a primary house is very abnormal past a certain income level.

As if investment properties (e.g. rentals) don't exist You can invest in RE and have a sizeable portfolio of rentals, while still renting our primary residence and someone else's vacation homes. RE investment is independent of the places you live.


If you want to invest into a vacation home, then you must target the areas that are likely to appreciate because they are not underrated and still relatively affordable, but areas around them (customers of these properties) are getting wealthier. This signals more future demand for vacation homes from new money coming into the surrounding areas and also more demand from renters. this is what happened to DE beaches, DC metro and others got wealthy in the last 2 decades and this area being rather limited in size exploded with demand. Even though DE towns are just meh.. as far as beach towns and beach quality is concerned, their location is key, serving affluent metro area without much other access to beaches. People who bought long ago just got lucky that it became "the hamptons" of DC affluent. Or they were smart and understood the signals and growing demand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Great, except it’s NOT a vacation home. It’s a real estate investment. A rental property. A business. Totally different.

Gosh, if I’m vacationing there it’s still…a vacation home.

So it’s a year round rental property that doubles as a vacation home a few times a year when you use it. Not to be precious about it but I do think there is a difference between a home that you don’t rent out or rent out two weeks a year (to friends of friends or acquaintances) and a home you rent out on Airbnb 98% of the time and use a week or two out of the year. I mean, I would not personalize an Airbnb or buy really nice furnishings. There’s a different vibe.

[Anonymous]

It's a foolery for the rich. Those with unlimited time they can spend in different places (not your worker-bee type tethered to a specific location due to J.O.B. or kid's schools). Those with enough NW that they do not need to worry about making rental income to break even. Those with funds to pay the locals to maintain their home when they are away and prepare it for them and maintain it while they are vacationing there.

Those here who claim to have made millions or hundreds of thousands off their vaca homes were already loaded to start with, bought already expensive homes in areas of high demand, and didn't rely on these homes making income or appreciating to keep them. Or this is just BS.

[Anonymous]

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Anonymous wrote:

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Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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Anonymous wrote:With hurricanes and rising tides beach property seems really risky to me. I think people also often buy when they have little kids and then find with other kids that they can’t really use it due to sports and other commitments. The people I know who use them regularly have kids who are kind of introverts and/or don’t do sports or theater or dance or anything like that.

I’ve always found it odd that people list climate change as a reason not to buy a beach house while ignoring that such a huge portion of our GDP and infrastructure are based in coastal cities.

If climate change disaster happens, we’ll all have a lot bigger problems than just a beach cottage being wrecked.

Live your best life now.

But you can "live your best life now" by just choosing to rent when you want to go to a beach cottage/vacation. Plenty of excellent choices to rent and then you don't have to spend the other 50 weeks of the year stressing about maintaining the home. And you can invest your savings, since you don't have a money pit to maintain.

Did you read the full post you replied to? I think not.

DP but it seems silly to say if I put $300k into coastal RE I am no more exposed to climate risk than if I put $300k into a total market index.

Yes climate change is bad for the economy (that is the whole reason institutional investors support ESG as a tool) but it’s clearly worse for someone who might lose their vacation home than for the average person.

That's a claim you have no evidence for.

Beach homes go underwater, so do coastal cities. Water don't G.A.F.

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you do think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

I meant this, sorry:

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you don't think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

Do you have flood insurance? Have you looked at all its conditions?

Yes and yes.

But the question was about the investment value of a beach house wrt climate change.

It’s a ridiculous concept. If ocean levels rise that high all your investments are effed. Global economic crisis. End period.

Not exactly

None of you here have wealthy person's 2nd homes. Wealthy have more than 2 homes, and they have staff managing them. None of them sweat expenses or what rental income these homes may command, or worry about losing these homes in floods or fires. Their vacation homes are more.. disposable

+1. And they don’t rent them for extra income.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Great, except it’s NOT a vacation home. It’s a real estate investment. A rental property. A business. Totally different.

Gosh, if I’m vacationing there it’s still…a vacation home.

So it’s a year round rental property that doubles as a vacation home a few times a year when you use it. Not to be precious about it but I do think there is a difference between a home that you don’t rent out or rent out two weeks a year (to friends of friends or acquaintances) and a home you rent out on Airbnb 98% of the time and use a week or two out of the year. I mean, I would not personalize an Airbnb or buy really nice furnishings. There’s a different vibe.

Airbnb allowed peasants to own second homes and live pretend-rich lives or make initially profitable RE investments for cash flow. It worked for some people while others are getting more desperate as renter demand went down in some places and bans became rampant in others. Airbnb bans are nothing new and are spreading to new markets with heavy investment activity and where LTR markets aren't as lucrative as STR. Sellers of these properties aren't desperate yet, but rather opportunistic. As their properties sit and sit, and LT rents aren't going up to cover the costs, prices will start coming down. OP should wait for the wave of discount properties to hit the markets. She may need to be flexible about the area she wants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With hurricanes and rising tides beach property seems really risky to me. I think people also often buy when they have little kids and then find with other kids that they can’t really use it due to sports and other commitments. The people I know who use them regularly have kids who are kind of introverts and/or don’t do sports or theater or dance or anything like that.

I’ve always found it odd that people list climate change as a reason not to buy a beach house while ignoring that such a huge portion of our GDP and infrastructure are based in coastal cities.

If climate change disaster happens, we’ll all have a lot bigger problems than just a beach cottage being wrecked.

Live your best life now.

But you can "live your best life now" by just choosing to rent when you want to go to a beach cottage/vacation. Plenty of excellent choices to rent and then you don't have to spend the other 50 weeks of the year stressing about maintaining the home. And you can invest your savings, since you don't have a money pit to maintain.

Did you read the full post you replied to? I think not.

DP but it seems silly to say if I put $300k into coastal RE I am no more exposed to climate risk than if I put $300k into a total market index.

Yes climate change is bad for the economy (that is the whole reason institutional investors support ESG as a tool) but it’s clearly worse for someone who might lose their vacation home than for the average person.

That's a claim you have no evidence for.

Beach homes go underwater, so do coastal cities. Water don't G.A.F.

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you do think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

I meant this, sorry:

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you don't think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

Insurance policies are disappearing right and left on beach houses now (or having skyrocketing rates). Yes, climate change will affect the indexes but there will also be growth industries mitigating climate change. If it's a single mass catastrophic event, sure, we'll have different issues and you'll lose your beach house and everything else and won't care a bit.

Not saying cities won’t be underwater, but Seattle and our 2nd island home will be fine.

I'm not sure I'd call living in Seattle's heat dome fine. But nowhere is really fine.

Seattle’s “heat dome” is like a week of summer weather everywhere else in the country. The dome this week was cooler than our trip to Maine this July.

I was talking about the 2021 event that they just calculated contributed to about 160 deaths in 3 weeks. It doesn't really have the infrastructure to handle heat. It's also subject to floods caused by more intense precipitation/drought alterations. My point wasn't that it was worse than elsewhere, rather than nowhere is "fine."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Great, except it’s NOT a vacation home. It’s a real estate investment. A rental property. A business. Totally different.

Gosh, if I’m vacationing there it’s still…a vacation home.

So it’s a year round rental property that doubles as a vacation home a few times a year when you use it. Not to be precious about it but I do think there is a difference between a home that you don’t rent out or rent out two weeks a year (to friends of friends or acquaintances) and a home you rent out on Airbnb 98% of the time and use a week or two out of the year. I mean, I would not personalize an Airbnb or buy really nice furnishings. There’s a different vibe.

Airbnb allowed peasants to own second homes and live pretend-rich lives or make initially profitable RE investments for cash flow. It worked for some people while others are getting more desperate as renter demand went down in some places and bans became rampant in others. Airbnb bans are nothing new and are spreading to new markets with heavy investment activity and where LTR markets aren't as lucrative as STR. Sellers of these properties aren't desperate yet, but rather opportunistic. As their properties sit and sit, and LT rents aren't going up to cover the costs, prices will start coming down. OP should wait for the wave of discount properties to hit the markets. She may need to be flexible about the area she wants.

All of your repeated classist posts only make you sound poor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Great, except it’s NOT a vacation home. It’s a real estate investment. A rental property. A business. Totally different.

Gosh, if I’m vacationing there it’s still…a vacation home.

So it’s a year round rental property that doubles as a vacation home a few times a year when you use it. Not to be precious about it but I do think there is a difference between a home that you don’t rent out or rent out two weeks a year (to friends of friends or acquaintances) and a home you rent out on Airbnb 98% of the time and use a week or two out of the year. I mean, I would not personalize an Airbnb or buy really nice furnishings. There’s a different vibe.

Airbnb allowed peasants to own second homes and live pretend-rich lives or make initially profitable RE investments for cash flow. It worked for some people while others are getting more desperate as renter demand went down in some places and bans became rampant in others. Airbnb bans are nothing new and are spreading to new markets with heavy investment activity and where LTR markets aren't as lucrative as STR. Sellers of these properties aren't desperate yet, but rather opportunistic. As their properties sit and sit, and LT rents aren't going up to cover the costs, prices will start coming down. OP should wait for the wave of discount properties to hit the markets. She may need to be flexible about the area she wants.

All of your repeated classist posts only make you sound poor.

DP: ? PP's offering an analysis of what's going on in the Airbnb rental market--they're not wrong.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Great, except it’s NOT a vacation home. It’s a real estate investment. A rental property. A business. Totally different.

Gosh, if I’m vacationing there it’s still…a vacation home.

So it’s a year round rental property that doubles as a vacation home a few times a year when you use it. Not to be precious about it but I do think there is a difference between a home that you don’t rent out or rent out two weeks a year (to friends of friends or acquaintances) and a home you rent out on Airbnb 98% of the time and use a week or two out of the year. I mean, I would not personalize an Airbnb or buy really nice furnishings. There’s a different vibe.

Airbnb allowed peasants to own second homes and live pretend-rich lives or make initially profitable RE investments for cash flow. It worked for some people while others are getting more desperate as renter demand went down in some places and bans became rampant in others. Airbnb bans are nothing new and are spreading to new markets with heavy investment activity and where LTR markets aren't as lucrative as STR. Sellers of these properties aren't desperate yet, but rather opportunistic. As their properties sit and sit, and LT rents aren't going up to cover the costs, prices will start coming down. OP should wait for the wave of discount properties to hit the markets. She may need to be flexible about the area she wants.

All of your repeated classist posts only make you sound poor.

Never pretend to be rich, I am poor by DCUM standards, so I know first hand what peasants do. I don't think this should be of any concern or bother you at all if you are rich. It's not in your range of problems.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With hurricanes and rising tides beach property seems really risky to me. I think people also often buy when they have little kids and then find with other kids that they can’t really use it due to sports and other commitments. The people I know who use them regularly have kids who are kind of introverts and/or don’t do sports or theater or dance or anything like that.

I’ve always found it odd that people list climate change as a reason not to buy a beach house while ignoring that such a huge portion of our GDP and infrastructure are based in coastal cities.

If climate change disaster happens, we’ll all have a lot bigger problems than just a beach cottage being wrecked.

Live your best life now.

But you can "live your best life now" by just choosing to rent when you want to go to a beach cottage/vacation. Plenty of excellent choices to rent and then you don't have to spend the other 50 weeks of the year stressing about maintaining the home. And you can invest your savings, since you don't have a money pit to maintain.

Did you read the full post you replied to? I think not.

DP but it seems silly to say if I put $300k into coastal RE I am no more exposed to climate risk than if I put $300k into a total market index.

Yes climate change is bad for the economy (that is the whole reason institutional investors support ESG as a tool) but it’s clearly worse for someone who might lose their vacation home than for the average person.

That's a claim you have no evidence for.

Beach homes go underwater, so do coastal cities. Water don't G.A.F.

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you do think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

I meant this, sorry:

A total market index is not concentrated only in coastal cities.

So NYC, Boston, DC, Miami, San Francisco, LA, and Seattle are underwater and you don't think that's going to affect the general market and index funds? Seriously, man, do you hear how crazy that sounds?

I am MUCH more concerned about my uninsured investments than my insured beach house. That's the fishtank in the fire.

Insurance policies are disappearing right and left on beach houses now (or having skyrocketing rates). Yes, climate change will affect the indexes but there will also be growth industries mitigating climate change. If it's a single mass catastrophic event, sure, we'll have different issues and you'll lose your beach house and everything else and won't care a bit.

Not saying cities won’t be underwater, but Seattle and our 2nd island home will be fine.

I'm not sure I'd call living in Seattle's heat dome fine. But nowhere is really fine.

Seattle’s “heat dome” is like a week of summer weather everywhere else in the country. The dome this week was cooler than our trip to Maine this July.

+1000

Seattle “heat dome” is still at most 7-10 days, there is no or minimal humidity and it cools down 20-40 degrees at night. Only reason they make a huge deal about it on news is because 60%+ do NOT have AC. I live in a $2M+ home, 15 yo homes with normal HVAc where ac can easily be added and the multimillionaire CEO next door still has no AC.

[Anonymous]

Anonymous wrote:We are considering purchasing a condo in a ski resort in Colorado. We’d be up there 2-3 times a year and keep it rented out as much as possible otherwise when it’s not mud season. It’s always been a dream of ours and we are VERY hyper, problem solving end entrepreneurial people, so managing everything in Airbnb and being a landlord in practice would be something we’d really enjoy. The rental income would offset the mortgage and we could swing the mortgage in full whenever needed. So for some folks it makes sense, for others the the stress and hassle would be their down fall.

Lol, being entrepreneurial means not getting bogged down in nonsense ("work on your business, not in your business"), which is exactly what Airbnb forces you to do.

[Anonymous]

Anonymous wrote:PP here. This Bald Head Island house sold for $1.475 million is 2005 and is now listed at $1.725 million. It’s been siting on the market for nearly a year. If you look carefully at the sales history, you’ll see the effect of the huge market crash of the late 2000s on prices. North Carolina beach property did not double in value from 2003 to 2018; it crashed by 30 to 40 percent in the middle of that time period and only recently recovered.

https://redf.in/KM6myC

You're cherry-picking with a North Carolina home, with ancient pre-Great Recession pricing. P.S. a lot of UMC and rich have vacation homes in Florida, in ski towns out West, in California, and even pied-à-terres in places like Boston, NYC, Atlanta, or Nashville. But sure, cling to that one NC home you cherry-picked, EVERYONE is losing their shirt. lol

[Anonymous]

Anonymous wrote:It's a foolery for the rich. Those with unlimited time they can spend in different places (not your worker-bee type tethered to a specific location due to J.O.B. or kid's schools). Those with enough NW that they do not need to worry about making rental income to break even. Those with funds to pay the locals to maintain their home when they are away and prepare it for them and maintain it while they are vacationing there.

Those here who claim to have made millions or hundreds of thousands off their vaca homes were already loaded to start with, bought already expensive homes in areas of high demand, and didn't rely on these homes making income or appreciating to keep them. Or this is just BS.

Water is wet. In real estate, you have to spend money to make money.

RE investing is not for those without cash.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's a foolery for the rich. Those with unlimited time they can spend in different places (not your worker-bee type tethered to a specific location due to J.O.B. or kid's schools). Those with enough NW that they do not need to worry about making rental income to break even. Those with funds to pay the locals to maintain their home when they are away and prepare it for them and maintain it while they are vacationing there.

Those here who claim to have made millions or hundreds of thousands off their vaca homes were already loaded to start with, bought already expensive homes in areas of high demand, and didn't rely on these homes making income or appreciating to keep them. Or this is just BS.

Water is wet. In real estate, you have to spend money to make money.

RE investing is not for those without cash.

But the point of this thread a lot of times they don't make much money--or don't make as much money as comparable investments of cash after expenses in a basic stock index.