Second homes

Aug 30th, 2004, 12:03 PM
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Second homes

For those of you with second/vacation homes. How often do you use them, and do you still vacation in other places as well? We're New Englanders trying to decide whether to buy a home in South Carolina.
DonnaD44 is offline  
Aug 30th, 2004, 12:06 PM
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How often you use it is for you to decide. If you may not use it much, try the possibility of renting it to offset the income.
gojacks is offline  
Aug 30th, 2004, 12:14 PM
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One caution, if you're intent is to buy a vacation home and have rental income offset part of the cost, first consult with your accountant. The rules regarding how often you can use the property and qualify for favorable tax treatment are fairly strict.
Ryan is offline  
Aug 30th, 2004, 12:21 PM
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Ryan is correct. Rent it out enough to cover mortgage and taxes, and not to show "income".
gojacks is offline  
Aug 30th, 2004, 12:29 PM
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Think about this very carefully. Yes, we vacation in other areas but not as much as I would like. You spend a lot of time maintaining a property to keep it up to rental standards. Think of the amount of time you spend maintaining your first home. Now double that. Renters, even those you know, can be very hard on a home. We find rearranged furniture, linens missing, nails pounded into walls, etc. And these are people who have rented for years. Still it is nice to be able to get to really know a resort area and have a place you can go to without having to pack up a lot of stuff.
Birdie is offline  
Aug 30th, 2004, 12:34 PM
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An option, if your intent is to buy, and liev in later in life: hire an agent and lease it fulltime. Your rental income, lee agent fee and upkeep, my cover the mortgage. IRS will not be a factor, as long as income is about the same as expense. And you will not be using the property for some years to come. But this scenario may not fit yours, it's simply an option.
Aug 30th, 2004, 12:47 PM
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While still working here in Florida, I long researched the option of a "summer" home somewhere else, probably in the Carolinas. But in the long run I opted a whole different route. Sort of like what Itraveldou says, I purchased a couple of investment properties and rented them, but did that locally where I could manage them. They have been excellent investements. But I couldn't convince myself that I would be happy going to the same spot every year to spend my vacation -- I like to travel too much to do that. What's more I know too many people who do that, and spend the first half of each vacation doing the annual maintenance and general fix-up. Meanwhile the taxes, the maintenance, utilities and everything else makes it a poor value in terms of a place to spend a vacation only. So I long ago decided to forget the vacation home and spend my downtown (now that I'm retired, a lot of it) by traveling to various destinations. I know I spend a whole lot less renting than I would be spending keeping a place for use just a couple months a year. Meanwhile, I've also invested in other property, but don't "muddle" the income with using it myself and "kicking out" good renters.
Patrick is offline  
Aug 30th, 2004, 12:52 PM
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thanks all for some very good advice. Don't know which way we'll swing on this, but it's good to know that we have options to consider.
DonnaD44 is offline  
Aug 30th, 2004, 01:09 PM
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We have a vacation home in Michigan (we live in Chicago suburbs) that we go to nearly every summer weekend and regularly throughout the fall. We do not rent it out. However, it is only a 2 hour drive away--anything further and I'm sure we would not use it nearly as much. We do vacation to other places-we've been on 3 other trips this year, but rarely do we travel elsewhere in the summer.
swalter518 is offline  
Aug 30th, 2004, 01:44 PM
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I agree with most of the other posters that it greatly depends on your personal circumstances. If you buy a second home in a place you love to visit anyway, you could be getting the best of both worlds.

You didn't say the SC coast specifically, but if you're thinking about renting it out I imagine you are considering the coast. That's what we did. Here's our story in brief.

Lived in Winston-Salem NC and bought a small ocean-front condo in North Myrtle Beach (older, low-rise = 3 stories). Your Myrtle Beach area rental season is essentially: (1) June through August (about 90% of your income) and (2) *snowbird* season, January through March. The rest of the year, it's yours.
beach_dweller is offline  
Aug 30th, 2004, 06:24 PM
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swalter518 and I have identical situations. One of the best things I ever did was buy my house in Michigan. It has exactly doubled it's value in 4 years. But it takes a lot of energy and it wouldn't be for everyone.

I have at least 2 different one week vacations elsewhere and like swalter, they are almost always in winter and in spring. Next year I'll be on a couple of Caribbean islands in February- for about 8-9 days. But I do get to my lake in Michigan at least twice a winter and twice a spring. In summer and most of fall (breathtaking)- I am there 6 days out of every 14. The drive is 2-1/2hours and I have all Fridays and some Mondays off in summer so I am there nearly every weekend plus. I am not retired and work full time (40 hours) but I can do it because I have a large extended family and lots of help. As soon as I'm home from work, we are off. I don't pack etc.- everything is there. It's another world. I love home and enjoy it especially in winter, but LOVE my environment at the lake. View is unbelieveable. I look west into the sunset over a 600 acre lake- herons, swans come up my shallows. Michigan wetlands can not be developed on three sides- so I look at nature. My friend says all I need is a mountain. If you find your place, go for it. You'll still travel, but not as many places as before. But if you want to see one unique environment in all its different splendors and love the water like I do, it is terrific.

Shop first. I spent about 10 years off and on visiting lakes (B&B's) throughout the entire Midwest before I found the area I wanted to be in. Then it was too much $$$. But I finally found exactly what I wanted and something I could develop. I love to rehab.

What Patrick has done is the best of ideas if you don't like to powerwash or stain decks- or just want to spend time in a lot of different places. But I am not retired and can not be gone from work longer than a week or so anyway. Plus I had traveled more than average in my younger life and with my kids when they where still home. Mortgage and taxes are hard to handle on two fronts. I own my primary residence and did rent out Michigan very briefly. As noted before, look into state restrictions or tax categories closely. I can only rent 2 weeks a year or it changes the property's category.

There are homestead and non-homestead (second home) taxes in some states and Michigan is one. Eventually when I retire I will make Michigan my primary state and probably downside bigtime in Illinois and or rent in the Southern USA in Jan. and Feb. only. My house in Michigan gets used. My three kids' families are there much of the time, when I am not. They ski in winter, and snowmobile on the lake.

The biggest downside to the second home might be that you lose closeness to the friends, neighbors, of your primary location. You wouldn't be able to contribute the time to neighbors, relatives, friends etc. that you might if you were settled in one location.Plus some people don't want to touch a hot water heater or call a septic man every few years, so it's not for them.
JJ5 is offline  
Aug 30th, 2004, 06:29 PM
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Another thing to consider if by chance you have or are planning to have kids. They will tag along happily to vaction home much more when they are little than when they hit middle and high school and have friends and activities that leave them more committed to real home than second home. Know quite a few families who gave up the weekly battle about heading out and just sold the place.
gail is offline  
Aug 30th, 2004, 07:08 PM
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We have a condo at a vacation destination about 1 1/2 hours from our house. We use it quite a bit (our kids are still young), and don't rent it out.

We prefer a condo because a lot of the maintenance (exterior, and some interior) is handled by the condo association. We don't need to worry about plowing snow or dealing with the hot tub.

We still take our vacation time to other destinations, but we definitely travel around our home state less than we would if we didn't have the condo.

Eventually, we will probably retire to the town our condo is in (or somewhere nearby), but will buy a house.

If our condo was further away, we probably wouldn't use it as much. And we wouldn't purchase a second home that was several states away - I'd feel that I'd have to give up "vacation time" to visit the second home.
Lexma90 is offline  
Aug 30th, 2004, 07:34 PM
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My parents have had a place in western North Carolina for years and my family goes up for at least three weeks almost every summer. This is the first summer in a few years we haven't used it because of other vacation plans.

My mom kept her childhood home in upstate New York until I (the youngest) went to college and then it was never used. Living in FL it was just too far away and hard to maintain which is why she decided to sell it.

IMHO distance is a factor. The Carolina house is much more practical because it's only a day's drive or a short flight to Atlanta and another two hours from there.
Jayne11159 is offline  
Aug 31st, 2004, 06:36 AM
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Jayne is absolutely correct about distance. Distance, job, family commitments can make a good idea, much different in actuality.

But I do know a 70 plus year old who is a dynamo and has THREE homes. With little help, he keeps homes in Sedona, Chicago and Boca Raton. He also teaches part time at the college level. Plus he vacations quite a bit- but I must say that most places are "off" the driving routes between his places. YES, he drives to Sedona. (One time he "dropped" a brother-in-law off in Carmel, California. LOL) But he is a phenome. They would have given him Ritalin when he was a kid, if they would have had it. He never stops.
JJ5 is offline  
Aug 31st, 2004, 07:49 AM
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The only thing I can add is to make sure that you can swing the mortgage without having renters.

There are so many variables that can contribute to a home not being rented that it could be foolish to count on rental income.

Good luck to you. For what its worth, the pros far exceed the cons.
Aug 31st, 2004, 10:19 AM
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Donna, check out rental rates for homes in your desired location through Consider that you will need to advertise aggressively to have it rented out most of the year at those rents, which will cost you $$$s. We bought a beach cottage in February post 9/11 and it sat vacant most of that year though we advertised in both Canada and Florida. Now things are picking up and it's doing well. Since then real estate in our area has about doubled in value. But there have been lean times.

You might consider financing with one of those new mortgages where you put down a good chunk (20% or so) and then pay only interest, no principal. This will help you get your feet on the ground until you figure out the market and what you can afford. My neighbor did this and is now re-selling at what will be a profit if she gets her asking price, this after only four months.

Also, check the local newspapers to see what rents are. This will tell you what you might expect to rake in for rent.
Tandoori_Girl is offline  
Aug 31st, 2004, 10:38 AM
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If you buy, locations is what you must consider. If you rent it, is it rentable? Think annual leases, nothing less. And use a good local agent, both to purchase and then to manage it.

You have a decision to make. Are you buying it to use it right now? Or can you wait a few years, lease it out and recoup some of you money?

If it's use now, why not a time share?
Aug 31st, 2004, 10:49 AM
Join Date: May 2003
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All good advice so far. Indeed, your circumstances greatly dictate whether it's a good idea.

In our case, we bought a beachside condo in FL (we live in Phila.) that we use mostly for ourselves and friends and family. We rent it out once in a while through a realtor who does a thorough job of checking references.

As for circumstances:
-- Our kids are grown (one is married) so they like to come down to the place, unlike teenagers
-- We had been vacationing in the area for years and love it
-- We have friends there who can check up on the place for us if need be. For instance, we recently had a minor problem with the central air, and a friend met the repair guy at the house.
-- Air fares make it easy for us to get there. A little hunting around gets us a fare in the $200-$250 range, maybe cheaper.
-- I have a job that lets me work offsite, so I can sometime spend as much as 10 weeks there in the winter.
-- We don't rely on the rental income to pay the mortgage. If we get some, fine. If not, that's OK. In fact, sometimes we use whatever rental income we get to finance a trip; we're thinking about Europe next year.

To repeat, circumstances play a big part in the decision. We've owned for about three years now and don't regret the decision one bit. Of course, it helps that the value of the place had gone up about 85% in that time.

k_999_9 is offline  
Aug 31st, 2004, 10:52 AM
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One more thing. We have friends who bought a condo in Myrtle mainly to rent. They use it a couple of time each year.

I'd say they're not thrilled with the outcome. The rental income hasn't matched what the realtor told them when they bought, and the value of the place hasn't risen much in the last few years because Myrtle seems a bit overbuilt.
k_999_9 is offline  

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