Should I buy a beach vacation home?

[Anonymous]

Anonymous wrote:I’ve always wanted a place at the beach, but it never made sense because of working in an office and busy kid sports schedules. Now I’m in my 50’s and have savings for retirement. I’m not going into the office as often and will probably retire in a couple years. I could afford to pull out $1 million for a place. We would not rent it out. We’d use it more once I stop working. Our kids and siblings could also use it some. We’d have a view.

Downsides are distance - 3 hour drive, cost - $1 million plus pretty high HOA fees (cheaper to rent but hard to find places last minute), crowds and traffic during the summer, potential maintenance hassles, potential climate change, and is it a pain to actually go to your vacation home often?

Do you love having your place?

It sounds like you cannot afford it, so box But yes, my family and I enjoy our vacation homes.

[Anonymous]

OP, I’d be hesitant if the HOA fees could increase a lot and if you don’t already know how easy it would be to get there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

That's not really a beach house.

Yes, we've established that only a literal moron would consider buying a beach house in a day and age when they're shortly all going to be uninsurable and/or severely damaged on a regular basis. The idea is a nice family home that can be an escape and a retreat that also has easy/close access to the beach so, while it's all still there, the OP can enjoy what the beach has to offer.

Why all the aggression and name-calling, PP? We have a beach house, and yes, our insurance premiums are increasing. We've also experienced several hurricanes. But we can afford the insurance as I suspect OP can. We didn't buy ocean front (we're deliberately four houses from the ocean) and we looked carefully at the flood zones, so we've never experience even a dollar's worth of damage due to storms or floods. This "literal moron" has seen her beach house value rise by $500K in the 3 1/2 years since we bought with a 3% mortgage. My personal opinion is that, if you have to get in your car and drive 30 minutes to a beach, you might as well drive 2 hours to the beach from DC. It's the same amount of effort to pack everything up and get in traffic. We walk down the lane to a beautiful uncrowded beach.

No one called anyone a name.

I'm glad you're enjoying your beach house, but you've made a disastrous financial decision. Humans, as you're showing us, are terrible at evaluating risk. It doesn't matter what has happened in the past, it matters what will happen in the future. The beach—any beach—is only going to get MORE risky, the question is how quickly. All evidence points to it accelerating in the near future. Insurance rates going up but still affordable is a sign that your investment is going the wrong way—get out before you're uninusrable. Don't think it can happen? Look at Florida, look at California. Hawaii.

NP. Sorry, but you're completely wrong about this. We bought in 2012, cash, for $900,000. House is worth well over $3 million now.

I know you think the sky is falling, but that's not the realty of the beach market.

If you invested the same amount in the S&P 500 for the same time period it would be worth $3.3 million today.

Now, how much do you think you’ve spent over the last 13 years on your beach house for taxes, maintenance, insurance and utilities.

The dividends alone that you’d earn from the stock market would pay for very very nice vacations every year without the hassle of a beach house.

Since you're so interested, I'll tell you that we've broken even on all of that, due to the hefty rental income we take in each year.

And we do manage very very nice vacations every year on top of owning a beach house, as well.

What you're also not accounting for is the personal value of the enjoyment of the house that my close and extended family has enjoyed for all of these years. We would not all travel together on these very very nice vacations, but it's nothing for 12 or so of us to gather at the beach house for holidays or other occasions.

Christmas in rehoboth sounds like a nightmare. Pass.

I agree. We’re no where near Rehoboth.

[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:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

That's not really a beach house.

Yes, we've established that only a literal moron would consider buying a beach house in a day and age when they're shortly all going to be uninsurable and/or severely damaged on a regular basis. The idea is a nice family home that can be an escape and a retreat that also has easy/close access to the beach so, while it's all still there, the OP can enjoy what the beach has to offer.

Why all the aggression and name-calling, PP? We have a beach house, and yes, our insurance premiums are increasing. We've also experienced several hurricanes. But we can afford the insurance as I suspect OP can. We didn't buy ocean front (we're deliberately four houses from the ocean) and we looked carefully at the flood zones, so we've never experience even a dollar's worth of damage due to storms or floods. This "literal moron" has seen her beach house value rise by $500K in the 3 1/2 years since we bought with a 3% mortgage. My personal opinion is that, if you have to get in your car and drive 30 minutes to a beach, you might as well drive 2 hours to the beach from DC. It's the same amount of effort to pack everything up and get in traffic. We walk down the lane to a beautiful uncrowded beach.

No one called anyone a name.

I'm glad you're enjoying your beach house, but you've made a disastrous financial decision. Humans, as you're showing us, are terrible at evaluating risk. It doesn't matter what has happened in the past, it matters what will happen in the future. The beach—any beach—is only going to get MORE risky, the question is how quickly. All evidence points to it accelerating in the near future. Insurance rates going up but still affordable is a sign that your investment is going the wrong way—get out before you're uninusrable. Don't think it can happen? Look at Florida, look at California. Hawaii.

NP. Sorry, but you're completely wrong about this. We bought in 2012, cash, for $900,000. House is worth well over $3 million now.

I know you think the sky is falling, but that's not the realty of the beach market.

If you invested the same amount in the S&P 500 for the same time period it would be worth $3.3 million today.

Now, how much do you think you’ve spent over the last 13 years on your beach house for taxes, maintenance, insurance and utilities.

The dividends alone that you’d earn from the stock market would pay for very very nice vacations every year without the hassle of a beach house.

+1000

we had a real estate agent basically tell us in Maui that unless you plan to actually use the place yourself, it rarely is financially worth it. Insurance and HOA fees (which include much of your insurance for a condo and TH) make it not worth it. Then if you rent it out, you are paying 25-30% for a good management team, still have to pay for all repairs and utilities, etc. It's stressful and you rarely make $$. And if you rent it out, the times you make the most money (Hawaii it's xmas and Jan-March), you need to have it rented, not use it yourself or you wont' break even. And if I have to plan 1 year in advance when I want to use my own place (and when I will have it rented), I might as well just rent a place to use for 10-14 days. Much cheaper, leaves me choices of visiting other areas, other islands and seeing the world and I don't have to worry about all the added costs and stresses whenever there is a storm or fires or tsunamis etc.

It’s a way to build equity in something that - if climate change hadn’t come along - would’ve appreciated. I mean, if you even get some return it can help you buy an asset otherwise beyond your means that you can later sell, right?

or you can just invest in the stock market/SP500 and do the same, without the stress of managing a rental. And if you had bought in HI before covid you might have had trouble paying your bills for 18 months when you couldn't rent it out. My market investments bounced back and are way up since then. Most people I know have not made much from a rental home. Most have had losses and tons of stress. Especially from ones you are renting on a weekly basis.

We still take other vacations. But what we can’t do without our second home is host others and spend time with family and friends in a vacation area. We are able to spend a lot of time with friends and family that we wouldnt otherwise.

Well, you could rent a similar sized house and take whoever you want. Or go to Paris. Or the Vineyard, etc

We’ve done that kind of trip a couple times and for us, it’s not the same as being in our own place. Also we host all throughout the year, no way we can do that in far flung locations

Hey, if having the cousins down to Myrtle Beach is more your thing than visiting France… well… bless your heart!

Ha don’t worry! It’s a very upscale location. We are very very blessed
And managed to get to Paris this year too!

So you’re a different poster from the one who said they tried Paris but would prefer to feel obligated to host people at their Myrtle beach house?

I’ve never been to Myrtle beach.

Right. And your extended family really enjoys you nagging them to please come for thanksgiving.

Ha ha. DP here and I thought the same thing.

Sure, Jan

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

30 minutes to Rehoboth beach can be by the canal.

[Anonymous]

We don’t live in DC, but we have a vacation house that we really enjoy. It’s a lot of work but worth it for us. We spend the summers there

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

That's not really a beach house.

Yes, we've established that only a literal moron would consider buying a beach house in a day and age when they're shortly all going to be uninsurable and/or severely damaged on a regular basis. The idea is a nice family home that can be an escape and a retreat that also has easy/close access to the beach so, while it's all still there, the OP can enjoy what the beach has to offer.

Why all the aggression and name-calling, PP? We have a beach house, and yes, our insurance premiums are increasing. We've also experienced several hurricanes. But we can afford the insurance as I suspect OP can. We didn't buy ocean front (we're deliberately four houses from the ocean) and we looked carefully at the flood zones, so we've never experience even a dollar's worth of damage due to storms or floods. This "literal moron" has seen her beach house value rise by $500K in the 3 1/2 years since we bought with a 3% mortgage. My personal opinion is that, if you have to get in your car and drive 30 minutes to a beach, you might as well drive 2 hours to the beach from DC. It's the same amount of effort to pack everything up and get in traffic. We walk down the lane to a beautiful uncrowded beach.

As an owner of more than one vacation home at the beach and in ski areas like Aspen you are an idiot.

Expenses are not just insurance.

With Trump's economy and the fact he's never leaving office buying a beach house when the dollar is tanking and unemployment is rising is a terrible financial move unless you are the 1% which you are not.

Wow -- again with the name-calling. You have "more than one vacation home at the beach and in ski area like Aspen," but you're calling me an idiot for having a beach house? I'm not sure what kind of problem you have that is solved by attacking strangers on a forum, but please get help. And, I never said that expenses are limited to insurance; I responded to the PP who said it was a reason not to buy. And incidentally, we are in fact in the 1%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

That's not really a beach house.

Yes, we've established that only a literal moron would consider buying a beach house in a day and age when they're shortly all going to be uninsurable and/or severely damaged on a regular basis. The idea is a nice family home that can be an escape and a retreat that also has easy/close access to the beach so, while it's all still there, the OP can enjoy what the beach has to offer.

Why all the aggression and name-calling, PP? We have a beach house, and yes, our insurance premiums are increasing. We've also experienced several hurricanes. But we can afford the insurance as I suspect OP can. We didn't buy ocean front (we're deliberately four houses from the ocean) and we looked carefully at the flood zones, so we've never experience even a dollar's worth of damage due to storms or floods. This "literal moron" has seen her beach house value rise by $500K in the 3 1/2 years since we bought with a 3% mortgage. My personal opinion is that, if you have to get in your car and drive 30 minutes to a beach, you might as well drive 2 hours to the beach from DC. It's the same amount of effort to pack everything up and get in traffic. We walk down the lane to a beautiful uncrowded beach.

As an owner of more than one vacation home at the beach and in ski areas like Aspen you are an idiot.

Expenses are not just insurance.

With Trump's economy and the fact he's never leaving office buying a beach house when the dollar is tanking and unemployment is rising is a terrible financial move unless you are the 1% which you are not.

Yup.

This.

Anyone who thinks there is going to be a market for summer rentals is a lunatic.

Sorry you couldn't afford it, PP. But plenty of other people can.

Our house was rented out this summer for all but the two weeks we blocked for ourselves.

[Anonymous]

If I only listened to the DCUM echo chamber, I would be more worried about owning our beach home and being able to resell it. Because climate change is real, and sure, the stock market would have been smarter purely from an investment standpoint.

The fact is that 40% there are SO many families who still want to buy beach properties -- though maybe that's on the wane in Florida. Maybe because they can afford it regardless of whether it blows away. Maybe because they're climate change deniers. Maybe because they are motivated by emotion and are willing to ignore the risks; they want a gathering place for family that feels more like home than a vacation rental.

And all of that negates the naysaying on this thread. You'll be able to resell your beach house because the psychology still favors buying coastal properties. I'm at our beach house right now. I had two people just this week ask me if we'd think of selling - one who wants to buy, the other who knows someone who is actively looking. Could that change in the next few years? Sure. But right now, it's the weird poster here (who is so freaked out that she's calling names) who is the outlier. No one on our island is freaking out.

[Anonymous]

I would only buy a beach house if I could afford for it to be a complete failure as an investment. I would expect renters or squatters to trash it when I'm not there. I would expect the cost of insurance to triple over the next 5-10 years. And i would expect if I tried to sell it, it would be at a big loss. If you can stomach these real risks, then go for it.

[Anonymous]

Anonymous wrote:I would only buy a beach house if I could afford for it to be a complete failure as an investment. I would expect renters or squatters to trash it when I'm not there. I would expect the cost of insurance to triple over the next 5-10 years. And i would expect if I tried to sell it, it would be at a big loss. If you can stomach these real risks, then go for it.

lol please seek therapy

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Ha, have fun with climate change.

Only a sucker would be investing in anything near the water these days.

Seriously—insurance is only going up, and that's your best case scenario. Most places you're probably consider are extremely vulnerable to catastrophic storm damage.

Get a mountain house.

Op - also a consideration, but we aren’t sure we are boat people.

Maybe something mid Delmarva peninsula—easy drive to the beach with much less risk. We stayed at some airbnbs—beautiful large old houses on open fields, only like 30 minutes from Rehoboth.

That's not really a beach house.

Yes, we've established that only a literal moron would consider buying a beach house in a day and age when they're shortly all going to be uninsurable and/or severely damaged on a regular basis. The idea is a nice family home that can be an escape and a retreat that also has easy/close access to the beach so, while it's all still there, the OP can enjoy what the beach has to offer.

Why all the aggression and name-calling, PP? We have a beach house, and yes, our insurance premiums are increasing. We've also experienced several hurricanes. But we can afford the insurance as I suspect OP can. We didn't buy ocean front (we're deliberately four houses from the ocean) and we looked carefully at the flood zones, so we've never experience even a dollar's worth of damage due to storms or floods. This "literal moron" has seen her beach house value rise by $500K in the 3 1/2 years since we bought with a 3% mortgage. My personal opinion is that, if you have to get in your car and drive 30 minutes to a beach, you might as well drive 2 hours to the beach from DC. It's the same amount of effort to pack everything up and get in traffic. We walk down the lane to a beautiful uncrowded beach.

As an owner of more than one vacation home at the beach and in ski areas like Aspen you are an idiot.

Expenses are not just insurance.

With Trump's economy and the fact he's never leaving office buying a beach house when the dollar is tanking and unemployment is rising is a terrible financial move unless you are the 1% which you are not.

Yup.

This.

Anyone who thinks there is going to be a market for summer rentals is a lunatic.

Sorry you couldn't afford it, PP. But plenty of other people can.

Our house was rented out this summer for all but the two weeks we blocked for ourselves.

Yes, when we owned and rented out our beach house, it also was routinely fully booked except when we blocked out dates for ourselves. But, in hindsight, all that tells me is that renters were smarter than us. They knew it made more sense to rent than buy.

[Anonymous]

Anonymous wrote:If I only listened to the DCUM echo chamber, I would be more worried about owning our beach home and being able to resell it. Because climate change is real, and sure, the stock market would have been smarter purely from an investment standpoint.

The fact is that 40% there are SO many families who still want to buy beach properties -- though maybe that's on the wane in Florida. Maybe because they can afford it regardless of whether it blows away. Maybe because they're climate change deniers. Maybe because they are motivated by emotion and are willing to ignore the risks; they want a gathering place for family that feels more like home than a vacation rental.

And all of that negates the naysaying on this thread. You'll be able to resell your beach house because the psychology still favors buying coastal properties. I'm at our beach house right now. I had two people just this week ask me if we'd think of selling - one who wants to buy, the other who knows someone who is actively looking. Could that change in the next few years? Sure. But right now, it's the weird poster here (who is so freaked out that she's calling names) who is the outlier. No one on our island is freaking out.

Ha Ha you were doing so well until you weeded into bullshit. This did not happen. Folks looking for beach houses don’t ask owners of houses that aren’t on the market if they’re “interested in selling.” They look at the MLS, where there always are plenty of houses for sale in every beach community that attracts renters.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If I only listened to the DCUM echo chamber, I would be more worried about owning our beach home and being able to resell it. Because climate change is real, and sure, the stock market would have been smarter purely from an investment standpoint.

The fact is that 40% there are SO many families who still want to buy beach properties -- though maybe that's on the wane in Florida. Maybe because they can afford it regardless of whether it blows away. Maybe because they're climate change deniers. Maybe because they are motivated by emotion and are willing to ignore the risks; they want a gathering place for family that feels more like home than a vacation rental.

And all of that negates the naysaying on this thread. You'll be able to resell your beach house because the psychology still favors buying coastal properties. I'm at our beach house right now. I had two people just this week ask me if we'd think of selling - one who wants to buy, the other who knows someone who is actively looking. Could that change in the next few years? Sure. But right now, it's the weird poster here (who is so freaked out that she's calling names) who is the outlier. No one on our island is freaking out.

Ha Ha you were doing so well until you weeded into bullshit. This did not happen. Folks looking for beach houses don’t ask owners of houses that aren’t on the market if they’re “interested in selling.” They look at the MLS, where there always are plenty of houses for sale in every beach community that attracts renters.

Not PP, but my dad has a place in Fenwick Island and that has happened to him a few times. Not recently that I know of, but this was a few years ago when inventory was pretty low. I'd like for him to agree to sell it soon, and I hope some of those people are still looking.

[Anonymous]

Anonymous wrote:I would only buy a beach house if I could afford for it to be a complete failure as an investment. I would expect renters or squatters to trash it when I'm not there. I would expect the cost of insurance to triple over the next 5-10 years. And i would expect if I tried to sell it, it would be at a big loss. If you can stomach these real risks, then go for it.

This. You have described exactly what happened to us. We paid nearly $900k for a beach house in a popular area and ended up selling it about a decade later for less than $600k. Insurance DID increase by multiple levels — not only that, we eventually couldn’t even find it on the open market and our lender had to force place us. Renters didn’t trash the place by any means, but they were very very hard on it. Constant turnover of weekly renters in the summer can really take a toll.

We had a very low interest rate and plenty of renters paying very good money but came nowhere near breaking even on an annual basis and as I said eventually sold at a huge loss — writing a six figure check to the lender at settlement.

Because it was largely a rental, we were able to deduct the loss against our ordinary income and effectively cut it to about half of what it looked like on paper with the tax savings. So, no, it did not kill us. We made so much more money in the stock market over the same time period and since then so in the overall scheme of things it was just blip on the radar screen. But, wow, never again.