Vacation Home

cindyhlSeptember 27, 2008

We are thinking of buying a vacation home in the Carolina's. Does anyone have any experience with a 2nd home that would be used only a few times a year, ie telephone service, security, maintenance, etc? Thanks!

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I own a vacation home, which I rent out in season. I would suggest you think twice about buying a house you will rarely use, particularly if it's not within a short drive from your principal residence.

First, the capital gains laws are likely to change this year. What this means is that you will no longer be able to exclude $250,000 of any capital gains you might earn on a sale of a second home. If you hope to sell someday, you should take this into consideration.

Second, maintaining a second home that is far away can be a real problem. If your vacation house is near the water, or in a mountain area that gets snow and ice, you are likely to face power loss during storms, potential pipe freezes, wind damage, water damage, or snow damage. Snow can build up on a deck and destroy it, for example. If your house were in a hurricane or heavy storm area, you would need to have someone batten down the hatches. Many places in the Carolinas have humid climates, which means keeping the air conditioning on even when no one is home in order to prevent mildew.

There can be subtler problems, too. Carpenter ants might burrow in, but if you weren't around to see them, you wouldn't know to spray. Houses left empty in rural areas sometimes attract kids or tramps who break in and set up housekeeping - or just steal whatever is there. Critters like mice, squirrels, raccoons and bats move in as soon as the weather cools.

If you are going to do this, you really should look into a caretaker who would drop by periodically and who would be empowered to call plumbers, exterminators, and handymen if something needed to be fixed. I'd suggest putting in a webcam as well for added security. If the house had a chimney, I'd suggest you put a good grate on top to keep birds and bats out.

Phones are not all that important if the house has cell phone coverage, otherwise, a stripped down local service package would be a good idea.

I hope this helps.

    Bookmark   September 27, 2008 at 11:06PM
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I agree with kaleberg. We have a vacation/second home that we bought with the intention of retiring there. It is 2 hours away, so easy enough to get to if we need to go check on it.

Ours is in a private area that does not allow you to rent. Bad right now, but good when we move there full time!

One of the best things we did was hire a lawn service that mows every other week. It's always nice & neat even if we don't go for a month or so.

We had a land line installed because cell service is spotty. We went with the basic service - no caller ID, call waiting, etc. I think with taxes, etc it's around $21/month.

Your best bet for security is to know your neighbors. We have a door sensored alarm system. We bought a cheap diy system on ebay. Not the best, but it sure makes noise! It is not monitored, but our neighbors & even people across the lake could hear it if it went off. Not sure if it will make a difference. We are LUCKY to have great people next door. They live close & go there weekly. They usually walk around our property to check things & we do the same for them when we get there.

How far is the property?

    Bookmark   September 28, 2008 at 9:19AM
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Do a search on this 'second home' topic. There have been lengthy threads about it.

From what you've said, I'd say: You can rent a lot of different vacation homes in locations all over the world for many, many years and spend less than you'll spend on this one place. Those vacation homes will also be somebody else's worries.

We own a rental condo on Maui that has been good for us, as a vacation home and as an investment, but that's different from what I gather you propose.

    Bookmark   September 28, 2008 at 11:12AM
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We have a vacation home in the Carolinas. We have spotty cell service, no land line. It hasn't been a problem - we enjoy not being bothered. We are in a lake community of 50 lots of about 2-10 acres each with a caretaker and security has not been an issue. He also checks the house after storms and lets service people in. We have found service people in the area to be professional and reasonably priced. The house is landscaped so as to be virtually maintenance free (as are the other homes in the area).

SO it's really not that much work (keep in mind the house is new, so limited maintenance) and while it's not an insignificant expense we haven't had any surprises. We enjoy it very much but currently have it on the market because it doesn't look like I will be going back to work for the kind of salary I had expected when we started building. I suspect it's a good time to buy as very, very few people have looked at our place. We are OK with that. Fortunately can afford to keep it for five or ten years.

I agree that you could vacation all over the place for what it costs to own a weekend home. We also considered Exclusive Resorts and came to the same conclusion - it's always cheaper just to rent rooms at the best hotel/resort in town. The reasons I enjoy owning are:

1. Air travel gets more unpleasant every year.
2. It's convenient to leave our stuff at the cabin.
3. We enjoy the company of the people we know in the community.
4. We can decide to get away at the last minute.
5. Hedge against an increase in retirement home prices (buy now because you might not be able to afford it when it's time). This wasn't a consideration for us, but many of the lot owners in our community did this. They bought for a retirement that is still years in the future.
6. Our cabin in the woods on a lake is a more wholesome environment for our children than a trip to Disney World.
7. There are no good resorts in the area of our property, which is only a two hour drive from our house.

Financially it's clearly better to rent vacation homes than to buy one if you aren't expecting the property to appreciate. But it's *possible* that in the next few years prices will begin to increase again. But I think that it's best to consider a vacation home an expense, not an investment.

    Bookmark   September 28, 2008 at 4:19PM
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