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

[Anonymous]

Looking into buying a beach house. We often go to a particular beach (we currently vacation there about 3 weeks per year for the past 10 years), and when we go we stay in a hotel for an average of $200 per night (in high season it's more like $300 per night but we also go in low season).

We have around $300 K maximum to spend on a beach place (our budget doesn't allow us to buy waterfront property).

I ran some numbers and with an average monthly mortgage of $2000 per month, including all taxes and condo fees and a little cushion for repairs, etc., we'd have to use the beach house an average of 68 days per year to make it worth the cost. We don't want to rent it out as of now.

I also calculated that if we use the beach house one long weekend per month, 7 weeks in the summer, Thanksgiving and Christmas, and one week of spring break then we still have about $5400 per year that's wasted because we're not using that time there. If we used it that much we'd still have some vacation weeks to use to do other vacations or staycations.

What do you think, is it worth it? I'm on the fence. On the one hand, whenever we vacation we stay in hotels, which are on average $200/night and hotels are uncomfortable. On the other hand, we would plan to retire to the beach house. Are there other things I should be considering?

Thanks!

[Anonymous]

The # of days doesn't really matter that much if you reach your goal to make it worth it or not. You're not vacationing that many days now, so this is an added expense, whether you like it or not.

The question is more about your bigger financial picture. Age, HHI, annual spending, retirement savings, college savings and expectations, retirement expectations.

[Anonymous]

not worth it. go to vegas, put half of your $300k on black... put the other half into a vacation fund to rent a nice oceanfront home.... much better use.

Friends of mine have a beach house up north on the Cape- but they're a 1hr ride from the house and use it every weekend in the summer (and some weeks) and at least once a month in the cold. That makes it worth it.

[Anonymous]

How long is the drive to the beach?

Even if you didn't rent it out on vrbo, would you be willing to rent it to friends and family if they wanted? Could you recoup some of the costs like that?

[Anonymous]

Anonymous wrote:Looking into buying a beach house. We often go to a particular beach (we currently vacation there about 3 weeks per year for the past 10 years), and when we go we stay in a hotel for an average of $200 per night (in high season it's more like $300 per night but we also go in low season).

We have around $300 K maximum to spend on a beach place (our budget doesn't allow us to buy waterfront property).

I ran some numbers and with an average monthly mortgage of $2000 per month, including all taxes and condo fees and a little cushion for repairs, etc., we'd have to use the beach house an average of 68 days per year to make it worth the cost. We don't want to rent it out as of now.

I also calculated that if we use the beach house one long weekend per month, 7 weeks in the summer, Thanksgiving and Christmas, and one week of spring break then we still have about $5400 per year that's wasted because we're not using that time there. If we used it that much we'd still have some vacation weeks to use to do other vacations or staycations.

What do you think, is it worth it? I'm on the fence. On the one hand, whenever we vacation we stay in hotels, which are on average $200/night and hotels are uncomfortable. On the other hand, we would plan to retire to the beach house. Are there other things I should be considering?

Thanks!

We looked into this a few years ago, and determined that is simply better financially ( and in terms of hassle) to simply rent a house when we want to go to the beach. Basically, if you have to "run the numbers", then you really cannot afford it. These houses can be a money pit, and there are much better investments for your 300,000. Just curious, why do you stay in hotels instead of renting a condo or house?

[Anonymous]

I grew up in northern Minnesota, where everyone has a cabin. I can tell you from experience that in addition to "running the numbers" to see if it makes sense financially from a rent/hotel vs mortgage standpoint, don't forget to factor in the taxes, upkeep, utilities, and elbow grease involved.

For example, when you rent or stay at a hotel, you show up for your vacation and hit the beach! When you own, you show up at your place, deal with any maintenance issues that popped up since your last visit, turn it over for the new season, if you have a yard you'll have to deal with mowing/landscaping, etc.

After awhile it can feel like less of a vacation and more of a second job.

[Anonymous]

OP, did you also start this thread with similar parameters (but a different question)? http://www.dcurbanmom.com/jforum/posts/list/542983.page

If so, it's not about the money, is it?

[Anonymous]

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.

[Anonymous]

Anonymous wrote:I grew up in northern Minnesota, where everyone has a cabin. I can tell you from experience that in addition to "running the numbers" to see if it makes sense financially from a rent/hotel vs mortgage standpoint, don't forget to factor in the taxes, upkeep, utilities, and elbow grease involved.

For example, when you rent or stay at a hotel, you show up for your vacation and hit the beach! When you own, you show up at your place, deal with any maintenance issues that popped up since your last visit, turn it over for the new season, if you have a yard you'll have to deal with mowing/landscaping, etc.

After awhile it can feel like less of a vacation and more of a second job.

OP here. All the places we're considering have all lawn/exterior maintenance included in the HOA fees. And we're only buying new construction/newer so hopefully there should be minimal appliance-related issues as everything will be new/newer.

We factored in utilities, taxes and upkeep into our $25,000 per year figure.

[Anonymous]

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.

Beach condos/houses are awesome! Try one for a week this summer as a rental to see how you feel. So much better than a hotel.

[Anonymous]

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.

[Anonymous]

Anonymous wrote:I grew up in northern Minnesota, where everyone has a cabin. I can tell you from experience that in addition to "running the numbers" to see if it makes sense financially from a rent/hotel vs mortgage standpoint, don't forget to factor in the taxes, upkeep, utilities, and elbow grease involved.

For example, when you rent or stay at a hotel, you show up for your vacation and hit the beach! When you own, you show up at your place, deal with any maintenance issues that popped up since your last visit, turn it over for the new season, if you have a yard you'll have to deal with mowing/landscaping, etc.

After awhile it can feel like less of a vacation and more of a second job.

+1.

[Anonymous]

You have to let the idea go that you'd be "wasting" money if you didn't go a certain number of days. You won't ever go enough days to get your money back. Financially, you'll always be better off getting a hotel or renting a condo. Do you *want* a place to stay that's yours? Part of the value is that theoretically it will appreciate in value and your payments won't go up by much, whereas hotel rates will continue to rise.

Remember that at some point, if you have kids, they'll get to an age where there will be activities on weekends that will keep you from going as often.

[Anonymous]

Anonymous wrote:I grew up in northern Minnesota, where everyone has a cabin. I can tell you from experience that in addition to "running the numbers" to see if it makes sense financially from a rent/hotel vs mortgage standpoint, don't forget to factor in the taxes, upkeep, utilities, and elbow grease involved.

For example, when you rent or stay at a hotel, you show up for your vacation and hit the beach! When you own, you show up at your place, deal with any maintenance issues that popped up since your last visit, turn it over for the new season, if you have a yard you'll have to deal with mowing/landscaping, etc.

After awhile it can feel like less of a vacation and more of a second job.

+1. We have a vacation home and it does feel like a second job. Remember, the worst thing you can do is let the house sit.

[Anonymous]

your cushion for repairs is way way way off, make that a big cushion.