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To do or not to do ?

Posted by summer1942 (My Page) on
Thu, Jul 14, 11 at 10:15

I see a house in Myrtle beach area in Realtor.com and like it a lot. I plan to make an offer, however I will not move in there until I retire (2015-2016).

If I buy it then for the next 5 years, perhaps we will use it around 4-6 weeks per year.

I am willing to pay for utility, tax, insurance, yard maintenance... during that time.

Can you give me some pro and con about my planning


Follow-Up Postings:

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RE: To do or not to do ?

If you can afford it and if you are sure you want to retire there, go for it!


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RE: To do or not to do ?

My only concern is what can go wrong with mostly un-occupied home in 5 years ?


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RE: To do or not to do ?

The downside is that buying a house is a really, really expensive way to vacation. It certainly isn't going to be cheap to insurance an unoccupied building.

Also, buying a house is a really bad way to get to know an area. Unless you have lived in MB before, why not rent a house in different areas of the city those 4-6 weeks per year?

The biggest con is just the unknown. You might plan to retire to MB 5 years from now, but a lot can change in 5 years. I went to MB last year. I hadn't been for probably 5 years. I hardly recognized some of the areas.

The plus is - it's fun to have a beach house. Prices are pretty low and interest rates are great. If you have the cash and you've already done your homework on the area, it could work out great. If you have only seen the place online though, it doesn't sound like you are to that point yet.


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RE: To do or not to do ?

I feel about this the way I feel about people who want to buy a lot to build on...years from now. Not a good idea. (Although you can at least rent a house, unlike most land.) Wait until you are ready to retire to buy.

The only way I am willing to tie up money in a vacation home is the way we did it. We bought a vacation rental condo on Maui and use it ourselves every winter. The rest of the time we rent it to vacationers. We pay taxes, insurance and condo association fees. We pay an agency to be on call for any repairs. We have a cleaner. We advertise and rent via VRBO.com We have a guaranteed nice vacation home to use when we wish, and the rents have pretty much carried the expenses. It's been less headache and more profit than any single family home we owned and rented long-term. Appreciation has gone up and down with the market, but we are still ahead.


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RE: To do or not to do ?

It is difficult to get insurance on an unoccupied home. Look into that first. Also, you say you see it on Realtor.com and plan to put in an offer....things can look a lot different in pictures and what about the neighborhood, etc.? Do you plan to go look before you put in an offer?

I wouldn't do. Too much can happen in that time (family issues, medical issues, etc.) What is so special about the house that you don't think you will fine one in a few years when you actually retiring?


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RE: To do or not to do ?

Actually, this will be my final house. I will stay there after retirement. However, from now until that day, it will be a vacation house.Ofcourse, I will take a trip to see the house before making the offer.

Two reasons make me thinking this way:

1. The house is exactly what I am looking for, and it is in very nice area.
2. The price is good. I afraid I will not be able to find the similar house at the similar price 5 years from now.


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RE: To do or not to do ?

To me, the negatives far outweigh the positives. I know you are probably thinking that "now is the time to buy" since prices are so low, but you have to think about all the expenses you will be dealing with maintaining an unoccupied house. By time 5 years is up, after paying all expenses associated with this house, you may have paid about the same anyway.

You could probably recoup some expenses if you were willing to rent it out to vacationers as a timeshare - but in time, they could tear it up. To turn it into a timeshare, you would also need to furnish it and have a realtor (or timeshare manager) and a cleaning & maintenance crew on hand at all times. After paying them, its not like you are getting rich off of the vacationers.

What if the roof starts leaking and you don't find out about it for months? What if someone breaks into the house and vandalizes it? Other people have already mentioned your priorities could also change in 5 years.

You sound like you are a little excited by this, and it is great you have the funds to do so. If it would really make you happy, and you truly think you will get enough use out of it, then do it. Money is not everything, and you only live once, right? I just would hate for you to do this, and then find out too late you made a big mistake.

Good luck


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RE: To do or not to do ?

I think real estate is a great investment, especially in good locations like Myrtle Beach. There's only so much coastline left in America. And with the price of real estate being so low now, it's only going to go up in value. Now's the time to buy. I imagine you wouldn't be asking this question if you couldn't afford it. I personally wouldn't rent it out. I've heard too many horror stories about that. If you buy it, find someone you can trust to keep an eye on it for you. My friend bought a retirement place somewhere on the outer banks. They visit it a few times a year and are enjoying it very much. Someday they'll move there full time.

Someone mentioned looking into the homeowner's insurance because it might be costly due to it being vacant. Also look into flood insurance. FEMA redesignated a lot of areas flood zones that never were before. I imagine down there that might be an issue.


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RE: To do or not to do ?

My parents rented in Myrtle a few years when they retired, then rented in Florida a few years. They ended up in FL, and were glad they didn't have a property to deal with. The live most of the year in FL now. It will be cheaper to rent out a home in the area for a month or two to give it a test drive.


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RE: To do or not to do ?

Go for it!
We bought our retirement home (lake front, 3 hours away) in 1998 and retired to it in 2006. There was no problem with insurance on a vacation home. Yes, we did have to look at flood insurance and ended up getting a letter of LOMA because the lot was in the flood plain, but the home was not.
No regrets! We could afford the payments, utility bills, taxes, etc. But we did do our homework on all of it.
Now we live in "up north" Michigan and the kids and grands love to come to the lake for swimming, boating, campfires and just plain fun!
Kathy G in MI


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RE: To do or not to do ?

If it's your dream house, and it's available now, go for it.

If it's a good deal, prices are down, interest is low so you're considering it, stop. You're going to be paying several thousand dollars in insurance every year (you will need wind insurance, and flood insurance is a good idea when you're near somewhere that might get a hurricane whether it's required or not- it's a couple hundred bucks a year if it's not in zone A or V), plus 6% of the house value times the millage (.2093+). For what? To get 20K off a house? You'll spend that before you've moved in, and a lot can happen in 5 years. 5 years ago, our house would have sold for 110-120K. Now it's more like 30K.

Loveinthehouse, FEMA is constantly updating maps. I've heard it's a constant 30 year cycle, but I'm not sure how true that is.


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RE: To do or not to do ?

We found a lake house we loved 3 years ago that we decided would be perfect for vacations & eventual retirement in 10-15 years. We looked at it from every angle - even missed out on it while deciding but the other offer fell through - and eventually bought it. 2.5 years of renovations later, we decided to go ahead & move in! We found we were only going to our main house to cut the grass. We are incredibly happy with our decision & wish we had done it sooner.

We're self employed & were able to put a loft style apartment in our "big city" building for when we need to be there. It's a 2 hour drive when we need to go in, but luckily we don't ever have to do a round trip in a day & it works out great.

Good luck with whatever you decide!


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RE: To do or not to do ?

If you buy the place as an upscale rental then that coul defray some of the expenses associated with it if something major happened to affect your financial status. There are also certain tax advantages to rental property. Every vacation I've taken in the last few years has been from VRBO. They've all been wonderful experiences and the properties have all been "owner kept" clean and repaired rather than shouting "rental". If you targeted other people like me on VRBO, then I think you would be satisfied with the income and the care your place would receive. It's just a thought for you anyway, just in case you might want to explore the upscale rental market.


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RE: To do or not to do ?

It is a personal decision. When it comes down to it, only you can make it and I'll bet that you make the one that is best for you -- whatever you decide. We've had a second home in the mountains for 13 years. We started with a condo, which we did rent out when not in use and then sold it and bought a single family. Our situation may be a bit different because our daughter and her husband live in the home full time and they pay the utilities, lawn and snowplowing plus a modest below market rent. We visit about 3-4 weeks a year, sometimes a bit more and at times bring friends.It works for us, but probably wouldn't for everyone. Our neighborhood is about 1/2 full time residents and 1/2 second homeowner, with at least one other family with a situation similar to ours. Now to answer your question, a few things to consider.

1. Your own finances. I'm sure you've thought of this already, but it has to be said. A second home is a luxury item, so the only advice I would offer is don't stretch your budget or jeapodize retirement income to make it work. Upkeep, particularly remotely, can add up. It seems like we are always doing something -- new appliances, painting, boiler, etc. -- just like in your primary home.

2. With the vagaries of the re market right now -- ask yourself whether
you'll still love the house, if the market goes down further. Hopefully, it won't, but anything is possible. Just be sure that that possibly is something you can live with. Frankly, I'm with you on the feeling that you!ll get a better deal now than five years down the road, but just be aware that the opposite is possible. No crystal ball here.

3. There's an intangible aspect that some folks underrated - the enjoyment you get from fulfilling or working toward a dream. I think you understand that. I can't tell you how much fun my daughter and I have had in decorating and planning (there's a funny story on that, but would make this post too long).

4. Finding quality repairmen, plumbers, lawn care, etc. can be challenging long distance. We've got a leg up on that now, but I don't even want to think about the company that built our fence when we first bought the house.

5. Vacation rentals. Some subdivisions in resort areas do not allow vacation rentals and many municipalities require a permit. Our subdivision does not allow vacation rentals, but others nearby do. Our city
does require permits and there is a lodging tax on vacation rentals. Just do your homework on that. You might want to check into property management companies in the area. Even if you do vrbo, you will need cleaning services at least.

Good luck and I hope it works out great for you!

By the way, I'm the one buying a lot in our second home resort to eventually build our dream home. After considering options and talking not only to our realtors but others we respect, that's what works for us. We just returned and have narrowed down to 3-4 lots we really like. I'll probably back in a day or two to ask some questions in evaluating various lots and I'm arranging a consultation with an architect when we return in Sept. This is what works for us, it may not be for everyone. I'm also you, I believe even considering carrying costs, property taxes, insurance and mowing, etc., we have more options at a better price now than we may have in 5-6 years from now. It's a specialized market, but we aren't taking a risk we can't live with if we are wrong or circumstances change. I'd much rather that than to regret having missed out on an opportunity in the first place. Besides, we will have a great time planning in the meantime!


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RE: To do or not to do ?

What did you decide?


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