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Vacation Homes

Home Mortgages and Home Buying Vacation Homes

  • jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016

    I have written before about the home our grandparents built on the beach in Nokomis, FL. While this is definitely not something I would recommend on a general basis, it does work out well in some cases – ours, for one. By their 60s, Grandmother and Papa were tired of travel and wanted to spend time away from home in only one place – that small community where a lot of their friends also vacationed and where they rented a place every winter. I was in my 20s when they built it. They lived there 3 – 4 mos of the year and it was vacant the rest (no desire to rent and didn’t need to). My parents and their 5 daughters all enjoyed spending Christmas vacay there, along with any other opportunities to go down with friends and family members. All 5 of us have friends who can relate stories about “Remember the time we were at your grandparents’ place and we??? [I’ll leave that to your imagination – we were still young lol]

    When they passed, my dad had already passed, so it went to all 5 sisters. Only 1 sister and her partner (now wife) wanted to mess with the upkeep and they were retiring early, so we sold to them and they lived there half the year for a few years. Now they keep it and rent it for a tidy profit and we all get to visit pretty much whenever there is a vacancy. The next 2 generations are now using it (our kids and grandkids). I just returned from a 4-day long weekend with one son, DIL, and their kids – just wonderful. Short stay b/c of the upcoming Big Trip with both kids, DILs, and grandkids on beach outside of Charleston in a week, as mentioned on the infamous Screw it thread 😎.

    This home is part of the fiber of our history. So many memories of that area and so many ties. Yes, there is upkeep and no, it doesn’t always work out this way for everybody, probably not even for most. But, with all due respect to those who think it makes no sense, I must (mildly) differ.

    As an ad lib – they probably spent $50k on it all, can walk right out the back door to the ocean, watch dolphins and manatees, etc. Relatively uncrowded beach. Now worth well north of $1M. Definitely serendipity, shouldn’t count on ANY value growth if you’re planning to build a 2nd home.

    btw – a week’s rental is very reasonable if anyone is interested. Can’t recommend highly enough.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228187 Reply
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2484
    Joined: 08/01/2016
    (just finishing med school),

    Click to expand…

    Unless you have zero medical school debt, for someone who just finished med school to own a home or second home should be the farthest from one’s mind.

    And even if you are debt free, you have some idea where you will be doing a residency, but no clue where you will do a fellowship or get your first or 2nd or even 3rd job where you will be stable with a good employment / partnership. And the lake house you get now may be thousands of mils away from that job.

    Get settled in life with a good primary home before you dream of a cabin on the lake. Better yet, ditch that idea and rent for your vacations, since in your early attending years you will be busy building a practice and have no time for those lakeside trips as often as you dream of now.

    #228197 Reply
    Liked by q-school
    Avatar Antares 
    Participant
    Status: Physician
    Posts: 504
    Joined: 01/20/2016

    Sorry so long: This post is timely as I am now sitting on the rooftop deck of my brother- and sister-in-law’s beach house. Forward is the white sand and the steady waves of the Atlantic crashing ceaselessly upon the shore. I could watch it all day. Behind is the narrow spit of land on this coastal strip, and then the water of the bay. The house is large, airy, full of light, comfortable, and it’s the kind of place that has you relaxed the moment you step inside.

    So I ask myself: Would I like a beach (or lake) house? Why don’t I have one? How do I feel about my sibling in-laws having such a beautiful place?

    And the answers come immediately, almost without thought. My priority has always been to pay for a lifestyle that meets the family needs, and not more until I have achieved financial independence. If eventually I have more than that, I’ll consider spending more. Generally, I’d rather save than spend, until there’s little need. We were able to save 36% of our income this year, a record for us, and that makes me happy.

    Then I look at my brother-in-law. This is not to compare him to anyone who is fortunate enough to have a second home as lovely as this one – it’s just the situation in my life as it exists.

    He’s an unhappy person. There was no meaningful career activity he could identify other than making money. His father was competitive with him financially, and he needed to outdo him. So he makes money. Lots of it. He’s not in medicine, and while already rich, he just took a three year job at $2.5 million per year for three years. At 57, this will be his last job he says. This beautiful home is expensive, but for him, paying for it, and its expenses, is not a strain. Nor the Tesla, the 3 million dollar primary home, the jet-ski he bought yesterday. So if there is so much money that if the next Hurricane Sandy destroyed the house entirely, and one will not be appreciably harmed financially, the calculation is quite different.

    So then I wonder why am I not jealous? Why don’t I feel bad that he has this gorgeous retreat, and I do not? First, it is nice to be able to come here sometimes. Second, I spend little time wishing for reality to be different. My needs are met by my current lifestyle, and I spend my time enjoying that, not wishing for it to be different. Having a house like this would detract from my quality of life, as the added financial stress, and the diversion of resources away from my primary goal would cause me distress. I’d feel I was being foolish with my money.

    Finally, many of our friends summer in the stereotyped summer retreat for New York psychiatrists, Cape Cod. Close friends just bought a house there, for all those future summers. I understand it. It’s nice to have a place like that that is home to you. Familiar year after year. And yet….they paid 700,000$, but they needed to spend 400k to fix it up as they wished. We have many friends there. It’s beautiful. I’m thinking in a few years (4? 5?) we can spend a month up there if we wish. Most years now it’s a week or two. $20,000 for a month would rent a very comfortable house. It would make me crazy to spend a million dollars when my $20000 per year, or even $40,000 for two months for the sake of argument, doesn’t require the obligations of ownership.

    Life is good. Thoughts on the roof deck of someone else’s beach house. The end.

    #228211 Reply
    Liked by Tangler, seattlee
    Lordosis Lordosis 
    Participant
    Status: Physician
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    Joined: 02/11/2019

    Even better than a beach house is friends and family with a beach house that you can use.

    “Never let your sense of morals prevent you from doing what is right.”

    #228213 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016
    So then I wonder why am I not jealous? Why don’t I feel bad that he has this gorgeous retreat, and I do not?

    Click to expand…

    Regardless of the other reasons you list, one could still be jealous if one weren’t a decent person. And you’re a decent person. I feel sorry for your BIL – sounds like he has an empty place inside that he can’t fill, no matter how busy he keeps himself.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228215 Reply
    Avatar Tim 
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    Status: Accountant
    Posts: 3030
    Joined: 09/18/2018

    @antares,
    Musings from the rooftop? The cape or Scituite are nice.
    Martha’s Vineyard and Nanatucket are options too.
    Might as well rotate one each year for the next four. Invite your BIL for a week each year. Climb out on the roof and the two of you chat for an hour each evening.
    Somehow I think you can mellow him out.
    Who knows, maybe he will buy a place and save you rent!

    #228227 Reply
    Avatar Antares 
    Participant
    Status: Physician
    Posts: 504
    Joined: 01/20/2016

    @antares,
    Musings from the rooftop? The cape or Scituite are nice.
    Martha’s Vineyard and Nanatucket are options too.
    Might as well rotate one each year for the next four. Invite your BIL for a week each year. Climb out on the roof and the two of you chat for an hour each evening.
    Somehow I think you can mellow him out.
    Who knows, maybe he will buy a place and save you rent!

    Click to expand…

    “Musings from the rooftops”. LOL. Very apt!

    #228230 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2629
    Joined: 05/07/2017
    So then I wonder why am I not jealous? Why don’t I feel bad that he has this gorgeous retreat, and I do not? 

    Click to expand…

    Regardless of the other reasons you list, one could still be jealous if one weren’t a decent person. And you’re a decent person. I feel sorry for your BIL – sounds like he has an empty place inside that he can’t fill, no matter how busy he keeps himself.

    Click to expand…

    I wonder if the brother in law has reflected on his happiness.  Hopefully at only 60 when he retires, he will find some way to have happiness for the rest of his life.   I think many in medicine might not have a different starting story— they were pushed/cajoled/encouraged to go into medicine for security/money/prestige and then find themselves unhappy with all the trade offs that their parents may have minimized.  Add a little burnout, and lots of unhappiness can bubble to the surface.

     

    #228345 Reply
    Avatar radnater 
    Participant
    Status: Physician
    Posts: 19
    Joined: 12/08/2018

    You’re not going to find many favorable responses for a second home on this site, which is understandable because it’s nearly always a horrible financial decision

    We own one as it was always my goal/dream, I absolutely hate traveling and prefer to spend every free min there, it’s under 1.5 hours from my home and I’m 99.9% sure I’ll retire there unless there was an extenuating circumstance.

    A few things:

    – if your kids play sports you’re not going anywhere

     

    Click to expand…

    If you don’t have kids, this is a VERY important point that you wont necessarily think about. After having kids, you’ll be very busy planning activities tailored to kids enjoyment. Free time to do what you and/or the spouse wants becomes essentially non existent. Weekends are filled with sports tourneys and practice.

    If you can swing it, consider a rural/non urban area and have your primary house on lake. For example, Minnesota has many smaller communities in significant need of physicians that you could easily find a primary house on a lake. Benefits include usually a higher average salary, lower cost of living plus the perks of being on a lake (if you choose)

    As many others have mentioned, there are SOOOOOO many hidden expenses with a lake place e.g. dock in/out, hoist in/out, boat gas, boat summerization/winterization, lake toys, boat toys, coolers, boat permits, SUPs, paddles, life jackets etc etc. The list goes on…

    A lake place and/or boat has to become a lifestyle where that’s what the family/friends does for fun. Possessions by themselves don’t create happiness. They’re tools used to make memories and build relationships which in turn helps create happiness (hopefully).

    #228722 Reply
    Liked by Antares, Lordosis
    Avatar Tangler 
    Participant
    Status: Physician
    Posts: 356
    Joined: 08/23/2018

    ok, think i have been talked out of the beach house. was thinking in 4-5 years but sounds like bad idea unless primary res, esp if trying to achieve FI in next 4-5 years too. THANK for wisdom! OP thanks for starting post!

    #229275 Reply

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