Own or Rent Vacation Home? (inherit, friend, benefits, family)

[WorldKlas]

We always thought we would live in another country upon retirement. But, now that we are retired it is becoming more apparent that there are many spots that could be satisfactory in the USA without risking complete loss of investment, losing medicare coverage, complicated taxing situations, large other country investments, struggles with language barriers, becoming widowed in a foreign country, high travel expenses for visitors.

I own investment properties in my local market and fully understand all it takes to have renters. So, I wouldn't want to have my vacation home occupied as an extended stay unless I had a perfect solution for managing it.

For us, the best solution is to simply find a place we'd love to live at retirement and take vacations when we desire.

[lovnova]

Originally Posted by capitalhockey

Hello,

My wife and I love to travel. We try to do one international trip a year. Wherever we go, we always jokingly ask each other if this the place we would want to own a vacation home to enjoy now and live seasonally in our retirement years (many years away). We also like to watch the show House Hunter International together and imagine ourselves with this option. I heard of a few coworkers of mine who has purchased a vacation home with the plans of having it paid off by their retirement. I was wondering if someone has done this and how they felt about it. Was it worth it owning and taking care of two properties at the same time (financial & physical maintenance)?

The other deliemna is whether to own your vacation home or rent a vacation home. Assuming you have a fix amount (example $200,000) set aside. You can spent it all to have your own piece of paradise. A place that you can keep in the family and pass it down to your kids. Or view the fix amount as a "travel fund" account that you can use a portion every year for travel to differnt places. Over 10 to 15 years, you can see many places and not be locked into one set location. These days with Airbnb/HomeAway, you have tons of options in every imaginable city. The plus side is no maintenance costs, taxes or renters to worry about. Any opinion/advice?

Thanks.

Could write pages on this subject. But briefly,
We did this. In USA, not international. Owned a 2nd single family vacation home 250 miles away in a popular seaside resort community for about 28 years, paid it off and retired there a few years ago.

I don't think it is as bad as some of the posts here are making it out to be. Really comes down to very careful planning. We used the house for vacations for about the first 20 Y. It was a rental property through a management company the last 8 before we moved in. It was a headache at times with up keep, renters, storms etc. I would say we probably broke even or had a slight positive cash flow those 8 years.

It was nice selling our suburban Washington, DC home making a good profit and moving to a mortgage free resort home.

[StealthRabbit]

Originally Posted by lovnova

Could write pages on this subject. But briefly,
We did this. In USA, not international. ...

I don't think it is as bad as some of the posts here are making it out to be. ....

Very common with people buying in a resort / destination / vacation area (I grew up in Estes Park Colorado, 30 % of the real estate is owned by absentee owners, some happy, many NOT)

You will note the major naysayers were probably totally out of their expertise / experience and were pursuing a dream. Hurrah, please pursue all the dreams possible. some will inevitably be nightmares if you are in the least bit a risk taker.

1) lesson learned
2) move on to next dream
3) pass on your learning's, as they may benefit, but not dissuade others dreams / learning's / rational choices.

i.e. if you were city / apartment based and bought a rural mtn home as a dream relocation, yet found no 'city' and found COLD, and found house maint, must DRIVE to services.... it does not mean it was wrong for everyone... maybe just a slight bump in YOUR plans.


All is not as it appears.
There is a 'price' for all choices. or or

Some of us have been blading snow and fixing roofs and broken pipes for many decades, and appreciate being FREE from the noise, smells, busy-ness of cities. (a few weeks / yr in Singapore, Hong Kong, Bangkok, Tokyo, Manilla, Amsterdam, Barcelona, Milan, is plenty of city for me). In the future, every few months I will rent a small country home, OUTSIDE / 1 hr train ride of foreign cities. I will pursue US cities AFTER I am age 80.

Some rural dwellers LOVE to retreat to the city / urban landscape and thrive at their newfound freedoms.

Explore your options while young, agile, and wealthy (able to recover).
I have found many things in life 'don't fit', or only fit for a season.

I expect significant transitions +/- during my 50 possible yrs in retirement. Many will be bumpy detours.
(such as 1000% increases in Property taxes and Healthcare expenses since retirement planning)

Having only ONE vacation house will be a real relief, but at the moment I can handle frozen pipes in multiple locations 3000+ miles from 'home' (?) (11,000 miles away during the last yr). Some problems came up, plenty to repair now that I am back in USA. This too will pass. Next plan will be different! (and filled with potential potholes).

Life...

[rjm1cc]

Originally Posted by capitalhockey

Hello,

My wife and I love to travel. We try to do one international trip a year. Wherever we go, we always jokingly ask each other if this the place we would want to own a vacation home to enjoy now and live seasonally in our retirement years (many years away). We also like to watch the show House Hunter International together and imagine ourselves with this option. I heard of a few coworkers of mine who has purchased a vacation home with the plans of having it paid off by their retirement. I was wondering if someone has done this and how they felt about it. Was it worth it owning and taking care of two properties at the same time (financial & physical maintenance)?

The other deliemna is whether to own your vacation home or rent a vacation home. Assuming you have a fix amount (example $200,000) set aside. You can spent it all to have your own piece of paradise. A place that you can keep in the family and pass it down to your kids. Or view the fix amount as a "travel fund" account that you can use a portion every year for travel to differnt places. Over 10 to 15 years, you can see many places and not be locked into one set location. These days with Airbnb/HomeAway, you have tons of options in every imaginable city. The plus side is no maintenance costs, taxes or renters to worry about. Any opinion/advice?

Thanks.

Rent

[ocnjgirl]

I would absolutely not buy anything until you rent first to see if you really like living there. Even then, it depends on what the insurance situation is. Do they have homeowners, fire and flood insurance? If there is a typhoon, will you be helped out by the government or just lose everything you have there?

I rent in a beach town here in the states. I used to think I wanted to buy here, but Sandy changed my mind.

[GeoffD]

I've run two homes for the last 23 years. From an economics point of view, I would have been far better off renting than buying. I tied up all that capital and appreciation didn't come close to tracking the inflation rate. I've been paying property taxes, condo fees, and renovations. I like owning my own place because I have complete control over it. I can furnish it to my taste. I don't have to worry about getting out with all my stuff when a seasonal rental is up.

If I were looking to snowbird somewhere warm, I'd rent for a few years before thinking about buying. It's very costly to buy and then sell a few years later. I wouldn't want to make a buying mistake. If renting worked out OK, I might just continue to do that.

[ukgirl49]

i owned a second home for sixteen years; one home was in the UK.

Although it brought a good deal of pleasure I shall not repeat the exercise again as it curtailed my travel experience considerably.

[Steve McDonald]

Originally Posted by capitalhockey

Hello,

My wife and I love to travel. We try to do one international trip a year. Wherever we go, we always jokingly ask each other if this the place we would want to own a vacation home to enjoy now and live seasonally in our retirement years (many years away). We also like to watch the show House Hunter International together and imagine ourselves with this option. I heard of a few coworkers of mine who has purchased a vacation home with the plans of having it paid off by their retirement. I was wondering if someone has done this and how they felt about it. Was it worth it owning and taking care of two properties at the same time (financial & physical maintenance)?

The other deliemna is whether to own your vacation home or rent a vacation home. Assuming you have a fix amount (example $200,000) set aside. You can spent it all to have your own piece of paradise. A place that you can keep in the family and pass it down to your kids. Or view the fix amount as a "travel fund" account that you can use a portion every year for travel to differnt places. Over 10 to 15 years, you can see many places and not be locked into one set location. These days with Airbnb/HomeAway, you have tons of options in every imaginable city. The plus side is no maintenance costs, taxes or renters to worry about. Any opinion/advice?

Thanks.

If you buy one, every relative and friend you have will expect to be able to go there whenever they want for free.

[jack_pine]

Originally Posted by Steve McDonald

If you buy one, every relative and friend you have will expect to be able to go there whenever they want for free.

You are absolutely correct. Ours do that (and there are a lot of them) and we charge them a discounted rate. Works out perfectly and pays most of the bills.

[dbsteel]

I think I would rent. That way each winter I could check out a new place. Two homes 1000 miles away seems like a pain. Or just sell the home in the North and move.