Tales from the Wallet: When to Buy a Second Home
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Here’s a fun question for today: When would you consider buying a second home? Have you thought about it during the past six months (emboldened by relaxed work-from-home rules, perhaps)? Do you think second homes can be a “good investment,” either in terms of property values or rental income from Airbnb and the like? If you've looked into it, what are your best tips on when to buy a second home?
My interest has been piqued by a few Money Snapshots in which readers noted that they owned multiple homes. Plus, back in March and April there was a lot in the news about people in cities retreating to second homes in the country.
(Just to be totally clear, don’t think Team Griffin will be in a position to buy a second home any time soon!)
When I've Seen Friends Buy A Second Home
I’ve seen friends and family purchase second homes in a couple of situations:
1. Buying in an area outside the city — whether it’s by a beach, mountains, etc. — to have a place to go for summer weekends as well as longer weeks here and there. They often Airbnb it or let family members and friends use it.
2. Parents buying second homes near their kids in college so that they can easily visit whenever they want.
I suppose there are also the people who own second homes without having purchased them explicitly as such, such as when someone inherits a house and keeps it rather than sells it, or when two households merge through marriage or something similar.
In my youth, I hoped I’d be fabulous and have multiple houses in fun vacation places, but I hardly know anyone who has vacation homes outside of driving distance, and whenever I’ve seen discussions of timeshares (usually in an estate context at this point!), people talk about what a pain they are.
So I’m curious, readers — do you own multiple homes? At what point do you think it makes sense to buy a second home?
Do you think it makes the most sense from a convenience/luxury or investment/passive-income standpoint — or something else? For those of you who’ve bought second homes, what are your thoughts on what makes a great one — and if you’re Airbnb-ing it, what are your thoughts on managing/optimizing/simplifying that process? In general, what are your best tips on when to buy a second home?
Stock photo via Stencil.
This is something I am really curious to hear thoughts on. I am an immigrant in this country (US) and we bought a house in a major NE state but I keep thinking about somewhere warmer in the US.
We’ve thought about buying a weekend place, but my husband has family in Europe we like to visit for extended amounts of time (so that uses up a not insignificant amount of vacation time), and we didn’t like the idea of having one fixed place we’d feel obligated to spend the rest of our precious vacation time at. I’d rather just rent someone else’s vacation home. My mom and her husband are retired and after looking into buying a second home, instead opted to rent places in warm climates (changing their location each year for variety) for around two months each winter. It seems like the best of both worlds to me!
I am 42 and my husband is 40. We have fixed military incomes and make just under 300k a year. We bought a second house 8 years ago on a picturesque island in the Atlantic where I grew up and where much of my family lives. We have four kids and holiday there now while we fix it up, once a year as it is a 16 hour drive from where we are posted. It is a huge pain in the butt but worth it for us. Because we get posted all the time we haven’t always been able to go there but we bought it so young we were playing the long game. We also have defined benefit pensions and don’t want more money in the market and it was an excellent real estate investment because it is a bit of a unicorn property, though run down. We are a bit house poor at this phase of life because we chose to live in our in-laws’ expensive neighborhood for our primary residence (and we pay a full time nanny) but we are happy with the situation. My kids absolutely love the experience.
Side question: what do you mean by “fixed military income”? How is it different than someone working for a salary in the private sector?
We’re considering a second home to have a place to stay near my dad, who lives 22 hours away by car. He’s getting older and his health is not the greatest, and we also need to be able to work if we’re going to stay for an extended visit. I believe we’ll be purchasing a townhouse (or similar) in the next 12 months.
I’m also considering something similar. Both of my parents live in the same LCOL area and a condo near them would be pretty reasonable. I’ll at least be working from home a few days a week (at minimum) indefinitely, so as they get older, this is something we’re seriously looking at.
The other side of this I look at is that I live in a VHCOL area and I’ve looked at buying a larger “country” home in a lower cost of living area with more space to be able to easily escape the city on weekend and holidays.
I think a condo near an elderly relative makes total sense. Some place to stay and something you can lock up and not fiddle with while you’re away.
Do you guys think it’s appropriate to ask people to wear their masks correctly? The gas station by my house (blue city that mandates masks within a red state that “encourages” but does not mandate masks) is always full of employees wearing masks on their chins. One associate with a mask on her chin was even offering gas station customers free samples of some kind of food item, which (despite my pre-pandemic affinity for free samples ha) I found extremely weird in a gas station and even weirder during a pandemic.
Anyway, one employee working at the checkout counter was wearing his mask properly. As I was checking out, I said, loudly enough for the other associates and what appeared to be a manager to hear, “This is my favorite gas station and I am a regular, but I am truthfully disappointed that no one is ever wearing a mask lately.” The associate wearing his mask awkwardly chuckled and told me to have a nice day. The other associates made eye contact with one another and immediately pulled their masks over their noses as I walked out.
I told my fiance this story and he felt it was deeply inappropriate for me to make this comment. He said that it sent the message that I “think I’m better than gas station workers,” that it was condescending, and that it wouldn’t do anything to affect long-term change, as they would presumably just remove their masks as soon as I left. His suggestion was that I should have left and gone to the gas station across the street.
I’m curious about what the group thinks! For what it’s worth, the gas station is part of a national (global?) chain and has a sign on their door mandating that all guests wear masks. Also, in our area, practically every restaurant or retail employee I have seen is properly masked. This stood out to me as a huge exception.
I know I am less conservative (i.e. I do indoor dining about 1 time per month, wearing a mask until I am seated and eating) than many here when it comes to Covid, so I felt a little guilty for lecturing the gas station associates after my fiance made that comment.
I generally don’t make a comment, but I’d make an effort to avoid it if that’s the case.
You’re right! I will do so moving forward.
I don’t say anything because I don’t want to get into one of those rage incidents where someone fights back. I know they’re rare, but I genuinely get concerned. I’m also a conflict-averse person in general.
I just do not patronize those places. There’s a few delis within a few blocks of my apartment. The one straight across the street from me has not had good compliance the 2 times I’ve gone in (and I walked past this morning and saw the same issue), so I just refuse to go there in future. I’d rather patronize a business that prioritizes the health and welfare of their employees and customers.
He expressed concern about something like that, too, although it seemed so far-fetched to me. Still, it sounds like most agree I should have erred on the side of caution.
It’s not that far-fetched to think that someone could be enraged enough to do something scary if you ask them to wear a mask. My husband was physically attacked (while our child was standing next to him) after asking someone in line at a store to wear a mask – and we’re in a blue state.
I don’t think your comment is at all inappropriate, but I don’t engage for similar reasons to the other posters. I recognize that it may difficult to only patronize businesses where everyone is properly masked in certain areas of the country, but why go into a gas station at all? That’s definitely a place that’s easy to avoid contact with others. I’d just pay at the pump. If you’re going in to buy items, I’d just stick to the grocery store or pharmacy in my neighborhood.
Totally fair! I usually don’t go inside gas stations but occasionally do to buy a forgotten grocery item or because I get that annoying “Go inside to see cashier” message on the card reader. But most trips inside should be avoidable!
I definitely would not say anything in that situation and that phrasing does sound condescending to me. You aren’t going to change their minds so it doesn’t accomplish anything except put you at risk (some people go crazy if someone tries to correct them, ie those women in Chicago who stabbed the guard). My understanding is that there is not very much risk of getting covid from such a short interaction but if you’re truly concerned, can’t you pay at the pump? I don’t think I’ve ever interacted with anyone at a gas station except panhandlers.
Interesting feedback! Looks like my fiance was in the right :)
Well but you actually didn’t ask them to wear their masks. You made a passive aggressive comment about it.
Either politely ask “oh excuse me would you mind pulling your mask up” or say nothing. You were just being a passive aggressive drama queen.
No offense, but your fiance is being the idiot here – of course it’s appropriate to ask people to put their masks on during a global pandemic. Who cares if they deem you rude or “uppity”, you don’t know them and they serve the public. I’m also going to guess your fiance is of the “this isn’t that serious camp” or anti-masker camp if he’s worried more about people’s feelings than a deadly virus floating around.
He is not an anti-masker.
Another option not mentioned here would be to contact the owner/manager of the store to ask them if they are aware of the non-compliance and tell them that they are losing your business if it doesn’t change.
Pros:
1. You spoke up and maybe it’ll change.
2. You can call or write, so you don’t have to worry about a physical confrontation.
3. You can determine if their policy is intentionally lax and decide not to go there anymore if it is.
4. You can patronize a different business with a clear conscious.
5. You might improve working conditions, especially for the workers who do wear masks/support mask use.
6. If you get a sense that mask use is truly being encouraged, you can praise the worker who was wearing the mask properly so they can get acknowledgment/support from their boss.
Cons:
1. Someone might call you a Karen.
2. If you’re identifiable and they disagree with you, you might get deliberately poor service in the future.
I think you did the right thing in making your preference/displeasure known. This is similar to dropping off a comment card /suggestion card at a restaurant or store, or answering a survey. I always try to provide feedback when I get those cards, they should be happy you gave the feedback to them rather than on Yelp – so they have a chance to correct it.
A vacation home does not appeal to me at all. Home maintenance is enough just with one property, thank you very much! I’d much rather just stay in a hotel and have all the work done for me.
This is where we always land. We’ve considered buying a cabin several times but we have to direct so much of our money to home maintenance as it is, I really can’t imagine directing more of our money to maintenance on a second home. I know several people who have tried to “cover expenses” on their second home by renting it out when they’re not using it, and all of them have ended up having to repair property damage from short-term renters. Especially now that there are places like VRBO, where you can rent someone else’s vacation house wherever you want to go – I’d rather make maintenance and upkeep be someone else’s problem.
If we did not have kids I would agree. But having extra rooms, laundry and a kitchen is a huge help when away from home with littles.
H to the no on a second home. My parents had one. My grandparents did too. Unless you’re going to hire someone to manage it for you or have a condo, then you have to deal with all of the upkeep issues from a distance. From hiring groundskeepers to finding workers to handle repairs, etc., it all eats valuable time. I’m 100% a vacation rental person for this reason. Sure, I may be missing out on an “investment opportunity” but I’m not investing the time into running two houses.
We own a second home at a lake about three hours from our primary home, which is in a major city. It’s been a good investment for us both financially and because it serves as a central meeting place for family get-togethers. We’ve owned it for about 15 years and we use it year-round and have offered it to family and friends. We haven’t rented it out and don’t intend to. Because it’s close enough, we can handle the maintenance on it and we have a handyman spray for bugs, do leaves, etc. It’s been great and I envision it will be passed down to my kid.
Our family just purchased a beach home in an area known for its prime summer rentals season. We’re also hiring a property manager to handle the rentals. We ran the numbers, and after one or two seasons, the house will most likely be paying for itself. We do realize that we’re extremely fortunate to be in this position and to have the start up capital required for such an investment property.
We’re sort of waffling between buying a second home or just moving somewhere else. We have one kid, flexible jobs and save A LOT of money. Barring those factors, we’d probably never consider a second home. Honestly, it was a bit of a shock to me when DH said earlier this year “Maybe we should just buy a second house in X city.” We can do that?!
My husband has a 1/3 interest in a small condo in a ski area about 300 miles from where we live. It costs very little to maintain and it’s nice to have a getaway spot. But if we didn’t have it already I don’t think I’d go out of my way to acquire a second home.
Unless, of course, I could afford a pied a terre in Manhattan!
We bought a second home over the summer and it was the best decision we have made in a long time. It is in the mountains about 90 miles from our primary residence. It is so nice to get away and this is the area we were looking at for retirement. So now we are able to get our retirement home completely set up, get to know people and the area — and most importantly for our mental health right now, a place to look forward to going on weekends and holidays. Yes, it is more work, but for us, the benefits far outweigh the extra work for us. We feel incredibly fortunate that we were able to afford to do this…
We bought a small lake cabin a little more than 2 hours away from our home almost 15 years ago and used it year around, mainly on weekends and an occasional weeklong vacation. We decided to sell two years ago and thought we’d travel and do different types of vacations instead. I hate vacation planning and my DH never does it. That coupled with hectic lives and two dogs meant we never went anywhere or seemed to take a break. Spontaneity wasn’t possible and it was too hard to get much-needed respite (lots of non-nuclear family drama and demanding jobs that made longer breaks difficult). I started looking again last fall and in earnest this spring, closing on a newer, larger “cabin” 2.5 hours away that needed some updating. It’s been a wonderful diversion during the pandemic and we are able to work from there as well. Is a second home work? Yes, but somehow it’s different – and I find it relaxing in ways I cannot accomplish at home. We can come and go as we please, and once we are able, will share it generously with friends and family. Honestly, it’s the only thing getting me through this pandemic. I realize I am extremely fortunate to have this escape – and I am grateful every.single.day.
We dream of owning a home in Rosemary Beach and renting out the carriage home (maybe), but mostly just having it for friends and family and spending holidays there.
A lawyer friend who advises family offices (very high net worth clients) tells me that while second homes may be fun and good for family bonding, etc they are NEVER, in his experience, good financial investments if that’s what you’re looking for. An investment property that’s always rented out is one thing. But a second home that is not managed to maximize rental income is always a money-loser when all costs (including opportunity costs) are considered. He doesn’t advise against them; his job is simply to make sure his clients walk in with their eyes open.
In Australia we get a tax deduction for expenses related to investment properties (is this a thing in the US?), so most people with a second home have it rented out. I have one of these and have for years, but would love a holiday home as well.
We love having a second home but the expense of it can be a bit stressful. Sharing it with friends and family was also taking up lots of time. During the pandemic we started https://www.eligere.luxury/ to give homeowners the ability to share within their network. Don’t rent to strangers and get help with the calendar and payment collect. I am happy to answer any questions to fellow Corporette’s if you would like more information. Paige