Vacation/Cabin Ownership Pros and Cons

[Deleted]

I was asked to start this thread.
I know we've covered this subject before on the old boards. But I don't think we've covered it here. So let's share our experiences both good and bad.

I'll go first as I'm sitting in our cabin in the beautiful So. Cal mountains and it looks like a perfect sunny day.

We inherited it about 10 years ago when DFIL passed away. This place was his home for over 10 years. Other than saving DH from buying a time share when we were in Hawaii 15 years ago we have never seriously considered buying a vacation home. As DFIL observed when people buy up here they are very excited and come up whenever they can for the first 2 years. Year 3 the excitement tapers and they may come up for the major holidays. Year 4 they might come up once or twice. Year 5 they put it up for sale.

We've had our cabin in Vacation Rental Service, meaning it's available for short term rental. Our goal was not necessarily make money which is good since we have never broken even; generally we have about an annual 2k loss. Instead, we wanted someone to regularly check on the place since we lived too far away (SF Bay Area-8 hours; AZ-5 hours and Germany-don't want to think about it!). Without someone regularly checking on the place weird things can happen; especially critters (including the two-legged kind) moving in.

The pros for us have been emotional. Of course it reminds us of DFIL and all the good times we've had here. The hiking is fantastic. We're at 5,500 feet and within 2 miles one can climb to 8,500 and top out at 10,500. On a clear day you can see the ocean which is 100 miles away!It's also been a bit of an insurance policy for DH that if everything went to hell in a hand-basket we could move here and live fairly cheaply as we inherited it mortgage free.

Financially it makes no sense. When we inherited it the estimated value was $241k. Today Zillow is estimating $190k which seems about right. At the peak it was probably worth around $350k. Vacation areas get hit hard during recessions. Not only do people not buy second homes, fewer of them take longer vacations, and the local work force rental demand drops because many of them need to leave the area to find full time work.

We're still happy with our decision to keep "the cabin". In fact, I met with an architect to do some more remodeling to make it a little more livable (have 3 full bedrooms 3 baths). So we'll probably another $35k into it. ;D

What's your experience?

[illinicheme]

I haven't been around long enough to amass enough assets to consider having a vacation home. But it isn't really a dream of mine. I can't think of anywhere in the world I'd like to go frequently enough to make a permanent vacation home worth it (well, maybe Italy). I like traveling to different places with my vacation time.

[parker1b2]

We have a vacation home at the jersey shore. My mother, brother and I all inherited some money a few years back and decided to go in together on a family shore house. We do rent it out in July and august and that covers the mortgage and most all the expenses for the year. We use it in June and Sept, as well as winter if we wanted. Out of pocket it cost me and my wife about a grand to help cover if we are short on the year.

We bought it more for the future as when we all have kids, we have a place to get the family together in the summer. Although we don't make money and it has since lost value since we bought, and the rents in the summer had to be lowered due to the economy, we have a lot of fun at the house.

[dancinmama]

You are fortunate in that you inherited your vacation home and it is located somewhere where you want to spend time. Most people do not have that luxury. They have to consider the cost of the home, the yearly property taxes, and maintenance costs when making their decision.

When we relocated (6) years ago for DH's job, we purchased our retirement home. We looked for something that would make us "feel" like we were on vacation everyday. The home we bought has beautiful landscaping, great views of the mountains, numerous huge picture windows and a patio along the back of the house to take it all in.

In our immediate area there is hiking, fishing, and golfing; family members and the beach is about 1/2 hr. away as are venues for concerts, sporting events, and a major airport. The home itself is in a very rural neighborhood, but is less than a mile away from everyday shopping needs.

I'm not against buying a vacation home for those who want to spend a large amount of time in a totally different environment on a regular basis. Personally, I would not want to tie up so much money in ONE vacation option. I'd rather spend the travel money that I do have seeing different things and having many different experiences.

BUT again, your situation is different. You inherited the vacation home.

[Deleted]

Dancin mama,

I'm going to modify the post to clarify that this place was actually DFIL's home. He was a retired Navy pilot who taught sail plane lessons a couple of times a week in a nearby community. I won't call that community ugly but a lot of the I.E. is! There's no question why DH bought up here.

[dividend]

My mom just inherited a lake house at the Lake of the Ozarks. Well, she officially owns it now, but we've been using it since my brother and I were little. It's about a 3 hours drive from our home.

My grandmother's sister bought it in the 50's, when lakefront property cheap. It's got several hundred feet of shoreline, a nice dock, and a boat shed, in a neighborhood with a community boat launch/marina. My parents started using it in the early 80's, and have fixed it up, purchased a pontoon boat and a couple of jet skis. They decided to take as many summer weekends down there was we could instead of long vacations, and we have awesome childhood memories. We could always invite our friends, and as we got older, my brother and I now use it for getaways with our adult friends, or the whole family still goes together (which is cool because I'm 30 and my brother is 28). It's rustic - no television, no internet, no phone line (but ok cell reception), didn't have air conditioning until a couple of years ago (when my grandmother developed COPD and wouldn't have been able to handle the hot humid Missouri summers). We swim and ski and sunbathe, play cards and chess and drinking games, grill and eat on the deck or dock.

My mom complains a little about having upkeep on 2 houses as she nears retirement, but it's not a serious financial burden, and it's been paid for for many years. The experience of having that lake house was awesome, and the whole family really benefited from it.

So I guess, if your family will just use the heck out of it like ours did, it can be a great (non-monetary) investment.

[cronewitch]

My brother and SIL and their daughter and her family are getting vacation property this week. They are each getting an RV camp site and new RVs that they will place and leave. The RV park has two swimming pools and other things like WiFi. SIL has one more month to retirement and DB is already retired, their daughter is a housewife with two kids and her husband is a business owner. Today they are putting in firepits and the RVs are delivered Tuesday.

They are buying dishes, bedding and other things as well as gravel and things for the site. It is about 70 minutes from home and they are about 1/4 mile apart, they will have a golf cart to drive to the pool and things. They will pay a fee for the site and if they want WiFi it is 240 a year extra.

This week is exciting with all the shopping and fixing it up. When the entire family is visiting it will be fun and since they have plenty of time it may get used all summer. But this is Seattle and a camp fire in the rain isn't as fun. We will go visit them but probably mostly day trips or take our camper since they have 7 people with mom for 2 RVs.
Thier son might go pretty often too so we can have big family camp fires.

I don't want one they are pretty cheap at 6K pre site but that would be a lot with monthly fees and we can just visit them instead. We prefer camping on lakes or rivers but since they don't fish it will be a nice place for them to get out of the city to relax. DB and SIL have a small business too so they need to check email even if out of town.

I can see why they want one but I think after the 15 year old starts driving he won't want to go and already they have to bring him home every day during Memorial day for 6 hours training for his new lifeguard job.

[olderburgher]

after years of renting a cabin in the woods for a week or two with the family after we inherited some money we took it and bought a cabin half way down a dead end one lane gravel road in 1998. We are just back from our third weekend of the past 4 there. Yes i painted this weekend so that the gutters can be re installed this coming weekend but I also got in some time trout fishing, not to mention porch sitting. We will use it as much as we can through November and visit it after Christmas and again less often through winter until it is spring again. Of course there are taxes on it and two lawns to cut since we have a lawn at our home too but this place was not bought to make a profit at least one measured in dollars. We picnic in a different place each summer day we are there, tube or kayak or fish in the river, count the million stars at night and see the occasional turkey, bear or deer. The rest it brings is more than payment enough.

[AgeOfEnlightenmentSCP]

Pro: Using it.
Con: Owning it.

[AgeOfEnlightenmentSCP]

But seriously...if it's in the right location, it can really do well over time in terms of price appreciation. I would like to have purchased a home on Lake Geneva in Wisconsin in the 1970's-- or 1950's. I would have, but I had birth issues. I hadn't been birthed yet.

[Deleted]

Boskone,

Unless you find something really, really cheap look for something that has year round appeal. Our place is 2 hours from LA or San Diego so folks love coming up here to play in the snow in the winter. We don't however, get enough snow for skiing; skiers head north of here to Big Bear. Serious skiers head to Mammoth.

During the summer there is a thriving arts school and some kids' camps. Many retirees from the desert cities (Palm Springs, Palm Desert, etc) spend the summer up here to escape the 120 degree summer temps. Between those two rental pools we've had the cabin rented every summer we've owned it. In fact that's the tax deductible reason I'm staying here. I'm doing the annual maintenance and prep for our summer renters. This will be their third summer up here (they live in Palm Desert).

OK back to chores. This evening I look forward to sitting in my willow rocking chair, reading my book, throwing peanuts to the squirrels and a couple of glasses of wine.

[debtheaven]

Bonnap I'm just now realizing your cabin is probably near DH's best friend's mountain cabin! They live in DHS.

[Savoir Faire-Demogague in NJ]

I bought my vacation place at the NJ shore at the end of 2002. I was very careful not to buy too much home, and had a few options available when I was looking.
I ended up buying a modest 800sq ft, ranch style that was in move-in condition. The inside was pristine. The lot needed some work, fencing replaced, gravel layed down over the weeds and sparce grass,etc.
From about April through Nov, I am there nearly every weekend. I get a lot of use out of it.

[happyscooter]

Not sure if anyone covered this yet. If you are going to let family use it, please make sure that you let EVERYONE use it. Don't let one child use it and not the others. (if you have children). Or if it is at the lake, don't let someone use it in Feb when it is 30 degrees and no one wants to go outside. But you let the others use it in June and July when they can go out in the boat or jet skis. And for goodness sake, if you don't plan on letting someone use it, DON'T ASK THEM TO HELP PAY THE MAINTENANCE FEES ON IT!

[Deleted]

We bought our place 3.5 yrs. ago. It's a 1200 sf 3/1 ranch on 3 acres that we use nearly every weekend from May to November. After the second year, we began farming 2 acres of it. We've decided we want to retire, early, there in the next 7-8 years. It's exactly one mile in from the lake. We've remodeled with all new plumbing, wood floors, new carpet in the bedrooms, counters, sinks, vanities etc...though it had mature trees already, we planted more and added to the landscape. It was originally built in '75 and was only 2 bdrm, and an addition was added about 10 yrs. ago which included a large master, and a laundry room.

It's only 70 miles from our main home, TG, and family & friends enjoy it as much as we do.

[Wisconsin Beth]

May 22, 2011 14:07:39 GMT -5 AgeOfEnlightenmentSCP said:

But seriously...if it's in the right location, it can really do well over time in terms of price appreciation. I would like to have purchased a home on Lake Geneva in Wisconsin in the 1970's-- or 1950's. I would have, but I had birth issues. I hadn't been birthed yet.

My uncle bought a carpy cabin about 20 minutes from Boulder Junction, in Vilas County around 1974. My family's borrowed it for a week most summers since around 1978. We love it and still make it an family time, with my nieces and nephews sleeping on the floor or in tents outside. It's currently valued around $250K and if he sold it, they'd be tearing down the cabin (it's got electric and running cold water and a flush toilet and is about 400 sf) and build something better/nicer/different.

DH and I bought 1.6 acres of land, with 110 feet of frontage in Sept. 2009 for $39K. We've been up there once since then, mostly because camping with toddlers is not easy or on my list of fun things to do... DH now agrees with me, after we tried it last August with his parents. I doubt we'll be able to afford to build in the next 10 years... We love owing the land. And I'd like our kids to have the same sense of family/fun that I got using my uncle's cabin. DH's family used to rent a cabin for 2 weeks a summer and he loved it too. I'm planning on using it much more frequently next year.

[Clever Username]

I'll share two sides of the coin.

My father in law, his brother and their sister's family all bought lakefront property on a lake in the Northwoods of Wisconsin, 4 houses total.
Dollar for dollar, these three families got enough direct usage of of it to say it was a good deal.

The problems start coming in that it's almost too good. Everyone loves it. All told, the original owners are dying off, between kids and grandkids you could count probably 50 people who count "emotional ownership" of the property.

Estates have not done well by this either.
One of the original sisters died maybe 20 years ago, that branch of the family has been slowly drifting away since.
My wife's father died, owning 1/2 of one house. His widow, my mother-out-law, over the next 15 years stopped working, increased spending and got addicted to riverboat gambling. At her peak, she sued the family to force the sale of the property.

[thyme4change]

My parents built a house in the mountains. They were lucky that they bought a good lot, for a decent price, and waited almost 10 years for roads and water. My father did most of the labor on the house himself, so FMV was greater than cash in the day he finished. They enjoyed it for a while, but a few years ago my Mom confessed that she didn't like it up there. They talked of selling it, but didn't and then the real estate market crashed. They probably missed a golden opportunity to make a tidy sum, although I don't know if the IRR would really hold up against other investment opportunities.

I really hope they sell it themselves before they get too old. I know they will split their net worth evenly, but I really don't want us to have to figure out the best way to market and sell that place and split the proceeds if they die before they sell. It just seems like a pain.

I wish my Mom enjoyed it as much as my Dad - then it would be worth having around. But now, it just seems like they are holding onto it to see if the market improves.

[Deleted]

My brother and his wife have a lake house near Charlotte, NC, maybe 45 minutes from where they live. Darn, I covet that house. It's on a wooded lot, little lawn maintenance, and has a dock and a screened-in porch on the back with beautiful views. It works very well for them because they use it most weekends.

DH and I have considered something similar in our own area and just can't justify it. We spend a lot of our weekend time keeping our house and yard maintained and can't see hiring that work out so we can go live elsewhere. I work during the week so I'd barely have time to enjoy the house we already have. Getting a vacation home that requires a longer trip is out of the question- we'd never use it.

We may, as I get closer to retirement, buy a house on a nearby lake, and just move there and sell our current house. The lake I have in mind is too far to commute to the office on a regular basis but I can telecommute till I actually quit.

[happyscooter]

athena53-please buy a place here so i can come and visit you. ;D

[CarolinaKat]

Ugh Charlotte. Not my cup of tea.

My parents have a vacation home, a condo on the coast. It's VERY close to my mom's immediate family, and is usually the gathering place for family events and holidays. It's crowded, but we have always done the crowded family gathering thing so it's familiar. They bought it before the real estate there got crazy expensive, so even with the crash it's worth close to 2x what they paid.

My mom HATES dealing with the tourist-season traffic and crowds and wouldn't go there except for a very special occasion (cousin's wedding), so they rent it out. They go 2-3 weekends a month otherwise, and really enjoy it (Easter was great this year, went swimming with dolphins). It's turned out to be a good thing for my family, even if the HOA is a PITA.

[happyscooter]

'One other thought in this thread is, if you found a place that long haul (over the next 20 years) you think is going to appreciate, you might be ahead to buy there and figure the appreciation with make you very glad you bought it when you did. Always risky, but... '

I think it's like a house. Don't look at it as an investment. It's your home. Don't look at the vacation property as an investment. Look at it as a place to take your family and make lots of memories.

[Urban Chicago]

I have 2 stories.

My grandparents on Dad's side had a very small vacation place about a block from the beach. When they died, 11 kids inherited the house. They all get along pretty well and don't have trouble sharing, but paying for repairs and such is sometimes an issue. Example: My dad lives farthest away and has not been to the cabin in more than 10 years, does he pay? My aunt is completely broke and can't afford to go, but her kids use the place for a couple weeks every Summer, should she pay? etc. It's all very civil so far, but I think that once the siblings start getting older and sicker, the only logical thing to do would be to sell the place.

My other grandparents are still alive. They live halfway across the country from their beach house, which is not at all suitable for Winter. They can no longer drive and hate flying, so one of their kids need to fly to their house, pick them up, and drive them across country 2X per year. Lately, my grandfather has been talking a lot about what will happen when they pass away, and I see a lot of potential problems here.
One of my aunts seems to think she can just move into the place.

They may include grandkids, but the2 siblings who don't have children will think that's unfair. One of them is the litigious type and I really don't want to be sued by my uncle over my 1/20th share of a beach house.

Some of us have less financial ability to travel every year, and wouldn't be able to use the place much.

My grandfather's biggest fear is that his SILs or DILs will inherit his property, thus he's trying to write a very complicated trust that excludes the spouses. I can't see that creating good will.

Basically, I fear that this beach house will end up causing nothing but huge arguments. While my aunts and uncles get along now, some of them are the sort to go nuts about getting their "fair share" of everything. I guess my only advice from all this is that if you buy a vacation place, have a great succession plan in place, or just face the fact that the family may not want it forever.

[Deleted]

In general I think it's a bad idea to co-own real estate with friends or relatives other than your spouse. It's a big financial committment especially with who, what & how much maintenance. I only know of one family where the situation seems to be working out. When parents die, I think it's much better if one child buys out the other siblings or the place gets sold.

When my mother died three years ago my brother wanted to put her condo into Vacation Rental Service. It's located a few blocks from La Jolla Shores Beach in San Diego. While the location is great I knew from my experience here that the expenses associated with a vacational rental would be high not to mention that there were two very large mortgages on the property. I think my brother thought he could stay there for "free". Fortunately (?) my brother was not in a financial position to push the idea. He lost his home to foreclosure a few months later.

While I was settling her estate, I would stay at the condo (I lived in AZ at the time). I hated coming in after he "visited". He and his family are/were pigs. Bathroom a mess with pee all over the toilet and floor, stains on the white carpet, chocolate all over the fridge. They used to like to go over and use the washer and dryer because the HOA paid the utilities and theirs had been shut off.

Yes, this is the same brother who referred to himself as a "Financial Advisor".

[midwestlily]

My aunt and uncle are quarter-owners of a California beach-front condo, along with three other couples. I think they bought it together about 20 years ago. I know, buying with friends sounds risky, but it seems to have worked out very well for them. The place gets rented out for a few weeks each year, the rest of the weeks are divided up among the owners. My aunt and uncle still spend quite a bit of time there (they live a couple hours away), and they've let other family members (including my mother and me) use it. But they're all getting older, and I have no idea what sort of arrangements they've made for the place later on.