Buying a vacation home

[2rocky]

This is a good thread. I'd love to hear more from folks who are VRBO'ing their vacation homes as to whether is creates enough cash flow to justify the hassle.

My great grandfather had a house on Clear Lake but the 4 kids (my grandparent's generation) couldn't agree on what to do with it in 1981 and sold it.

I have two friends who were able to build their dream homes that they retired to. One in McCall, and another here in CA. Neither rented them out. One stayed married and sold the family home , the other married a woman who had a couple real good years as a realtor.

Another friend has a sidehill "ranch" and a couple trailers parked there as the dwellings. He and his father are there for at least a couple weekends a month together, The retired father sometimes during the week.

I should do a side by side partial budget comparing an RV to a cabin. Depreciation on the RV is probably the biggest downside.

I'm intrigued by the Multi family cooperative. I have cousins who inherited a river place that do the same. Not sure you could cash flow a purchase there though.

Do any of you cabin owners do swaps with friends to change it up? you go to their place, etc?

I'm more intrigued with the tract home rental property. $6k a year in income, is that after tax?

My girlfriend will be moving this summer from the Northwest. Her home is a 3/2 and I'm guessing from Zillow values, she can clear $500 a month before maintenance. With a big backyard, would it be worth building a granny unit there to use as a weekend place? Perhaps a garage with an upstairs apartment?

 

[88man]

Looking into a Colorado or Wyoming vacation home this winter

 

[elkduds]

If you are in CO, you are probably within 3 hours of this:

https://www.campgroundoftherockies.com/

GMU 49.

 

[midwesterncrosshair]

I'll never financially be able to own a vacation property but Ill tell you what I see through my father-in-law vs his vacation house on Lake of the Ozarks, MO. The man loves his lake house and boating but after selling his condo and buying a house the man never stops working on it to enjoy it. This sounds completely different than other situations I've read with cabins. But he's always fixing his dock, his deck, cleaning his yard cleaning the house... ect. A vacation house is really another house and everything that comes with your current house. He live 3 hours away from it and spend lots of time going their just to check on it and do upkeep. Very little time sitting down and enjoying and taking the boat out. Personally I'm kinda board of traveling to the place, I would never tell him that but I'm about new scenery.

From my stomping grounds WI people worry about their pipes freezing in their cabins because they are not there in the winter.

It just makes me realize its just more headache than enjoyment. But thats just me and my onion.

 

[Straight Arrow]

This sounds completely different than other situations I've read with cabins.

If that is what makes him happy, good for him.
But my cabin is completely different in that there is no plumbing (I carry water), no electricity (a solar panel and a LED light), simple heating system (small wood stove), no phone (and no cell service), recreational access (snowshoe or ski in this month), and little maintenance. It allows us to enjoy it, but have the security and freedom to lock the door and go elsewhere to camp, hike, and hunt. However, no ski boat, no dock ... but the night skies are magnificent and you can hear the snowflakes fall in winter.

 

[Ben Lamb]

This is a good thread. I'd love to hear more from folks who are VRBO'ing their vacation homes as to whether is creates enough cash flow to justify the hassle.

We're just getting our property set up. Purchased a 3 bedroom, 1 bath home in Philipsburg and we're currently renovating/updating it. Our business plan has us breaking even with about 50% occupancy and making enough to reinvest about $12K back into the property at 80% occupancy. It's a gamble, but we're pretty confident based on the lack of hotels & rooms for rent in our area, and the growing use it's getting as a tourist destination. We'll have more data after the year is over and we've been up and running, but for now, we're pretty happy with our choice given how our stocks were performing and what appears to be coming this year in that realm.

We're not really using this place as a vacation home, but more as an investment property, with the added benefit of using it a week here and there when we want to go play in Granite County, so we're more driven to rent it out as much as possible. YMMV.

 

[Gregoq]

For the past 5 years I was living in Europe and now because we are coming back to USA we decided to sell our property in Athens. It was a vacation villa for us where we used to go for 3-4 times per year. It was bringing additional income as well because we were renting it out to tourists when we were not staying there. So I can say that it worked for us really well.

 

[2rocky]

Still looking at this thread.

Now I know family places inherited by younger generations many times fall apart because of disagreements. But what about unrelated people pooling money to share a property? has anyone been involved with something like that? I'm guessing it would require a cash purchase because no banker would want to foreclose on 4-6 different "investors" and a corporation formed just for the purchase wouldn't have a cash flow to carry the paper would it?

Let's talk about how you would structure the deal.

 

[Straight Arrow]

But what about unrelated people pooling money to share a property?

We once shared a cabin on a lake with another family. The deal was structured to alternate weeks and weekends during warmer months, but it seemed whenever we were to have the weekend to ourselves, the other family's children, cousins, aunts, uncles, friends and others consistently show up. I completed many repairs to the cabin and the other guy helped as well, but there was a distinct difference in the standards of craftsmanship of repair and upkeep. The other guy was also a hoarder ... the spare toilet hauled onsite and stored behind the cabin was about the last straw. Plus we were intent on enjoying peace and quiet at the cabin, but the other family installed a television ... and even though it was our weekend, their kids would show up to sit inside and watch movies ... thinking they weren't bothering us doing our outdoors activities. Outside was a really nice rock campfire pit, but those folks thought that beer cans and beer bottles were biodegradable, so we were constantly pulling trash out of the fire pit. Sadly for them, a divorce changed their family and financial situation. However it was a relief for us as the cabin was sold and we parted ways with our "cabin mates". I think you get the picture. My advice; don't share a cabin with another group of folks

 

[sdkhunter]

We're just getting our property set up. Purchased a 3 bedroom, 1 bath home in Philipsburg and we're currently renovating/updating it. Our business plan has us breaking even with about 50% occupancy and making enough to reinvest about $12K back into the property at 80% occupancy. It's a gamble, but we're pretty confident based on the lack of hotels & rooms for rent in our area, and the growing use it's getting as a tourist destination. We'll have more data after the year is over and we've been up and running, but for now, we're pretty happy with our choice given how our stocks were performing and what appears to be coming this year in that realm.

We're not really using this place as a vacation home, but more as an investment property, with the added benefit of using it a week here and there when we want to go play in Granite County, so we're more driven to rent it out as much as possible. YMMV.

At some point I'd be curious to hear how this works out for you as I've been considering a cabin/vacation type place for years years. Ran across a really good deal on a lot that I think would be dynamite location... Total SQFT size of the lot is small but that's alright since I was planning to just stickbuild a small cabin mostly myself anyway (sub out the concrete work and a few things)... There are just so many factors my head keeps spinning - how much would it cost to get a good cleaner, how much would snow removal cost me in the winter, how many issues will I have with renters, etc etc. My goal would be to lease it out enough so my out of pocket is less than $500 a month - if I could do that, I'd be happy... Technically I could work out of a 'branch' office in that area too - so in theory, I could spend summers there or spend a month in the fall or whatever - of course realizing that would certainly impact rental 'income' during that time... Want to jump into it but I'm hesitant...

 

[npaden]

Still looking at this thread.

Now I know family places inherited by younger generations many times fall apart because of disagreements. But what about unrelated people pooling money to share a property? has anyone been involved with something like that? I'm guessing it would require a cash purchase because no banker would want to foreclose on 4-6 different "investors" and a corporation formed just for the purchase wouldn't have a cash flow to carry the paper would it?

Let's talk about how you would structure the deal.

I've seen this work very successfully with some folks I work with. They ended up going with 7 partners. It is a partnership and they have monthly dues for insurance, property taxes etc. They had to have cash for the original investment. They have one meeting each year where they discuss maintenance issues and things like that. They split the calendar up and each partner gets 8 weeks. The major holidays like Christmas, Thanksgiving and 4th of July count as 2 weeks. There must be one other holiday that counts extra because that would be one too few. They originally drew lots to get to start picking weeks but they have been doing it long enough that they all kind of have their own weeks that don't change much at all anymore. They can let friends and family use their weeks if they want but they don't allow outright rental of the place. This works really well if you have people from different careers and preferences in the mix. Some people like the winter, some like the summer, etc. If they all worked the same job and had the same interests they would all want to use it the same time.

They bought their place originally probably nearly 30 years ago and different partners have come and gone in that time but it really hasn't ever hit much of a snag. It is probably worth 3 or 4 times what the original partners paid for it now.

 

[Steiny]

I'll never financially be able to own a vacation property but Ill tell you what I see through my father-in-law vs his vacation house on Lake of the Ozarks, MO. The man loves his lake house and boating but after selling his condo and buying a house the man never stops working on it to enjoy it. This sounds completely different than other situations I've read with cabins. But he's always fixing his dock, his deck, cleaning his yard cleaning the house... ect. A vacation house is really another house and everything that comes with your current house. He live 3 hours away from it and spend lots of time going their just to check on it and do upkeep. Very little time sitting down and enjoying and taking the boat out. Personally I'm kinda board of traveling to the place, I would never tell him that but I'm about new scenery.

From my stomping grounds WI people worry about their pipes freezing in their cabins because they are not there in the winter.

It just makes me realize its just more headache than enjoyment. But thats just me and my onion.

Your father in law reminds me of my dad. We had a lake house as kids and every trip up there was a bunch of work, took lots of the fun out of it.
We've had a lake house in northern MI for ten years or more now and I made up my mind when I purchased it that it was not going to be that way. If I couldn't afford to pay to get all the misc. chores done, then I didn't want it. We pay to have grass mowed, snow plowed, a winter man to periodically check on the place, piers and boat lifts put in and taken out, maintain the sprinkler system, boat storage at the marina, and any significant repair or remodel projects. When I get out of the vehicle there, we just unload the groceries, relax and play.

 

[WesternRookie]

Having a second home will be a source of joy and pleasure, but it will also add a dimension of stress and another financial drain to your balance sheet. People will ask to use it, or invite themselves to come with you. It will automatically dictate a certain amount of space on your calendar, and when you are there you will spend as much (or more) time fixing or improving things as you will actually enjoying the things you thought you would while staying there (fishing, hunting, etc.). Depending on how far it is from your primary residence, and what the local area is like, you may or may not be interested or able to find reliable/trustworthy people to either keep an eye on things for you, or to go perform work. If it is a remote property or in a rural area, locals will quickly key in on an absentee landlord, will send you letters asking to hunt, etc. and will likely tresspass/poach anyways.

If you are considering somewhere in a population center, or in a coastal area, I would highly recommend a condo.

If you are considering a remote hunting property, I would recommend buying (or building) a dwelling that is as low-maintenance and off the grid as possible.

As for sharing ownership with friends or family, my recommendation is a big NO. And as for timeshares, I don't know anyone who was glad they did it. The only person I know who is still in one, is in a ritzy ski resort and he paid 5X what the current market value would be. He admits is was one of the worst "investments" he ever made, and the time his family actually gets per year is laughable.

 

[buckbull]

Still looking at this thread.

Now I know family places inherited by younger generations many times fall apart because of disagreements. But what about unrelated people pooling money to share a property? has anyone been involved with something like that? I'm guessing it would require a cash purchase because no banker would want to foreclose on 4-6 different "investors" and a corporation formed just for the purchase wouldn't have a cash flow to carry the paper would it?

Let's talk about how you would structure the deal.

Speaking from experience (owned 206 acres with 3 other people) I would never, i mean never ever, go in with someone again. The only thing I would consider is to pool the money together so you guys can actually purchase the property but have a plan to immediately survey and divide. Setup an agreement that the owners and their children can hunt the entire property but allow for owners to withdraw from the agreement.

 

[Scott85]

Speaking from experience (owned 206 acres with 3 other people) I would never, i mean never ever, go in with someone again. The only thing I would consider is to pool the money together so you guys can actually purchase the property but have a plan to immediately survey and divide. Setup an agreement that the owners and their children can hunt the entire property but allow for owners to withdraw from the agreement.

Owning land even with family is a terrible idea.

 

[claybreaker]

I've thought about a vacation home a time or two, but when I weight the pros and cons we stay with with our a primary home and a fifth wheel as our remote home. The great thing about the fiver is that it's a portable home. 2 weeks ago it was our home in South Carolina at a trapshooting event where I shot, last week it was home in mid-state TN near the State HS softball championships where we watched our niece help win the another state title for her school. Today it's back in the driveway a few weeks before it's off to somewhere else.

 

[hank4elk]

I had a cabin on FS lease land for many years in the Sierra's. Was 4 hr drive & we used it all the time. I worked 4 10's so I had 3 day weekends for many years. We went into it knowing it would put a limit on vaca time & $ to go elsewhere. The plan was for future retirement home too. Times change & we split up & decided to sell to some friends.
I used my profit on investment to buy my NM retirement ranch & she has her condo near beach & still goes to the cabin with the girls sometimes....lol
I loved that cabin built the year I was born by another retired Park Ranger. I look at the last Sierra buck I took now next to the bookcase & maple table I built for the cabin along with half the furnishings & nick knacks I have that came from it, and thank my lucky stars.

 

[Deleted member 28227]

Owning land even especially with family is a terrible idea.

Fixed it for you

 

[3855WIN]

Wife and her sister inherited a lake house. Many wonderful family memories from when the kids were growing up. They eventually decided to sell.
We now have a tiny house/ cabin on family hunting property. Lots of good times at that place. We’ve even spent Christmas there before. Pic from before it was set up on our place.

 

[schmalts]

I often wonder what my IRA or 401k would look like if I had maxed it out every year in my younger years instead of paying for the rec land I purchased. But one investment you can enjoy before you retire and one you can't. I would say as long as you are maxing out your 401k or similar go for it. Otherwise put your money elsewhere.