Second home vs Larger home

[Anonymous]

How much space are you lacking? Does everyone have their own room? It sounds like you are fine for space, you would just appreciate the luxury of having more. If that’s the case, I’d go for the lake house. If you were actually cramped or having to wfh on the dining room table with kids in bunks, I could see upgrading your home as the better option. But if you like everything else about it (location, neighbours, mortgage pricing, etc), I’d stick it out and enjoy your weekends and summers at the lake. But that’s coming from someone who built 11 yrs ago with no plans to move!

[Anonymous]

So many factors.

What lake. How far is drive. How handy are you at home maintenance and how much do you actually get it done.

Just be aware from late elementary school (or even earlier) through high school, your kids likely aren't going to want to go very much and they will have activities almost all non-holiday weekends. Your kids' life and friends will be centered where your primary house is.

For us it was a clear and easy no to a second home and we got a better primary home. But different families make different choices.

[Anonymous]

I would take the second hone and Airbnb for extra income and that will grow your retirement portfolio

[Anonymous]

We upgraded our primary home and it wasn't really about more space. It was about having the amenities we wanted. We have a large screened in porch, great space for entertaining, much better lot and back yard, great mud room, a kitchen I love, great natural light, etc. I love my home.

[Anonymous]

We went with the second home. But it’s sort of an impossible decision and case specific to each family. The second home has its own set of issues- you are now doing upkeep for two houses. But it’s really nice to have a set vacation place that you don’t have to pack as much for and it’s really nice to have those memories for the kids. We also really enjoy the outdoor activities.

[Anonymous]

We own a second home on the ESMD and do not rent it out. We were lucky to get it at a fantastic interest rate. We purposefully picked a location that is relatively easy to get to from the DMV and frequently go there on the weekends during the summer and throughout the year. Once the kids are in college I plan to spend longer stretches of time and semi retire there.

It can be a hassle but for us it has been worth it. I don’t put a monetary value on time spent there and we still go on vacations other places. My kids enjoy bringing friends for the weekend and have actually made local friends there that they regularly keep in touch with. It has worked out very well for us.

[Anonymous]

I debate this as well. We could buy a nice vacation home in an area we visit regularly for about 1.5m. We spend 20k-30k per year renting in the area. But we have 3 elementary aged kids and I know we will not be able to travel as much as we would like across the next 10 years. At the same time, it would cost far more to significantly upgrade to a better house in our school zone in northern Virginia. A house that would improve our lifestyle would cost 2-3x our current 2m home. So for now, we are doing nothing and saving money.

[Anonymous]

You are me 15 years ago. We bought the second home about 100 miles from our primary home. When the kids were elementary and middle school we used it a lot. Once high school hit it was significantly less and there were some years I visited quarterly just to put eyeballs on the place, change out the security camera batteries and do any maintenance it needed. Now that I can see retirement on the horizon I’m looking at it as my retirement place. I bought it for cash in 2009 and it costs me between $5k and $10k a year, depending on what improvements or repairs I feel like undertaking. I’ll probably renovate if I convert it to a primary residence at retirement.

I will say financially I’d have been better off putting the money in the market, letting it grow and using that to buy a place for cash at retirement. And renting someone else’s place in the meantime. But I’ve really, really enjoyed my second place and I don’t regret having it.

A few considerations- my place is in the woods and I don’t have any yard maintenance at all since I have no grass. It’s in a pseudo community and I have local friends who pop by to check on it every so often if I can’t make it there. I have a quarterly pest service- so extra eyes on the place- but being in the woods and rarely used I’ve made it through squirrels, flying squirrels, mice, snakes, flies, ladybugs, carpenter ants and bats making their way into my house so the pest service is an absolute necessity.

[Anonymous]

Anonymous wrote:I would take the second hone and Airbnb for extra income and that will grow your retirement portfolio

+1 We're looking at buying a beach house in a beach town where we'd like to retire. The plan is to use it some and rent it when we're not using it. We also want to diversify our assets so that's another reason.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would take the second hone and Airbnb for extra income and that will grow your retirement portfolio

+1 We're looking at buying a beach house in a beach town where we'd like to retire. The plan is to use it some and rent it when we're not using it. We also want to diversify our assets so that's another reason.

I would take a careful look at what’s happening to the STR market before I counted on income from a second home. Not what happened during COVID but what future bookings look like now.

[Anonymous]

Anonymous wrote:People are obsessed with more space but the time that the extra space matters is only about 10 years. Kids leave, parents want to downsize again. I’d rather have a family lake house that I could use with my kids now, my grandkids in the future, can stay in the family, etc.

+1 We had a rowhouse and a beach cottage and that was perfect. Then we moved from the rowhouse to a large 6 bathroom SFH for the schools. The SFH was way too big for our family of 5. When we left the area, I had a maximum square footage that we wouldn't exceed.

I absolutely loathed having a giant house. DH would have to rotate bathrooms to shower in just so they occasionally got used and we accumulated way too much stuff just because we had the space for it. We purged and I'm so much happier in my right-sized house. One family only needs so many bathrooms and places to sit.

[Anonymous]

Anonymous wrote:Will you be going to the lake for all weekends and vacations? What happens if you want to see something else or have sports commitments? We have neighbors with vacation property and when their kids were little we never saw them as they were always there and didn't build as much community with their regular neighbors. Now kids are in sports and they don't go as often. It's all a time and money trade off. I wouldn't get vacation property as I don't want to be tied to one place. Eventhough we often do a week vacation at the same place but we rent it and don't have to worry about maintenance etc.

A financial planner friend says the number one thing she comes across when helping people plan is people wanting to offload second home who bought with the intent of using them frequently and then a) life/sports/friends happen and kids want to be at their primary home b) they feel obligated to always go to the second home and don't have freedom to travel widely due to sunk costs c) the second home is a time and money drain as there is always maintenance and restocking that needs to happen when they go there. So the idyllic/carefree times at the second house don't really exist as much as a lot of extra work does.

[Anonymous]

Anonymous wrote:We bought a second home in DC and we rent our first home. Then we did it again and plan to gift these homes to our kids when they are older/ get married, etc… by the time the kids are 30, these homes will be fully paid (or almost fully paid).

What a great gift for your kids! Nice, solid financial head start - especially in this area where housing is so expensive.

[Anonymous]

Anonymous wrote:We almost bought a house on the water in Annapolis when our first was little. Since it was only 35-40 minutes away, we could have gone all the time and we loved the idea of the kids having memories there together. Now they are 11, 9, and 6 and I'm really glad we didn't. We are already so busy on weekend with sports and other kid activities and the kids want to stay in town to do things with their friends and have sleepovers, etc. I know we would never really go to Annapolis. Even in the summer, there is summer swim team and then sleepaway camp. I think we will revisit the plan when our youngest is in high school and we will use it more as a step toward retirement.

+1. This sounds nice in theory but as kids get older they don't want to leave this friends every weekend to go to a second house. It is a great idea to do this as a step toward retirement though.

[Anonymous]

It isn’t really that long that you need to stay for kids activities. By the time they are 16 or 17 you can leave them for a night or so and they can take themselves to activities. They also love coming out to our second home with friends when they are older.

We also feel no need to spend all our vacations there. In fact, we spend almost none of our vacations there - we travel for vacations, and use the second home for weekends and in the summer when we “work” from home.

I don’t discount everything everyone says about the cost and hassle, impact of activities etc. but for us the second home choice was one of the best things we ever did, even though it meant staying in a smaller house than we might have desired.