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August 10, 2011


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Completely agree. Especially in high traffic areas like Disney World (Orlando). However, I do have family that live in Augusta Georgia. They own a home that is close to the Master's Golf tournament. They own their home and live their year round, but they rent out their home ever year for the Masters Golf tournament to businesses for the week. They typically net between $10,000 - $12,000 for their 2000sf 3 bedroom home for the week. They basically pay the majority of their mortgage from renting out their home one week out of the year! Home prices have skyrocketed in Augusta because of the Masters, but it might still be a worthwhile investment.

We're going at the end of the month to our vacation home, which is ours.....for a week! Yes, we also believe in renting as well.

One of the issues with vacation homes is the same as with a time share, you pretty much lock in all of your vacations to one spot. For those who like the idea of seeing the world, seeing new things, and seeing places you've never been, a vacation home can quickly become a burden.

It seems that home price in Palm Beach was only 1/3 of five years ago.

While every situation / region is different, buying our cottage in northern Wisconsin is the best thing I’ve ever done and would do it again in a heartbeat.

We bought a cottage (well, a 3 BR walkout ranch) on a lake with 150’ frontage on a lake seven years ago for 185K and paid it off in five years. Yes maintenance is sometimes a hassle, but it’s not really all that bad (heck I think I mow lawn only four times a year). It’s only an hour-and-a-half from our home and we’re probably up there 30 times a year, Nothing like sitting down by the lake on a Friday night after work with a Gin & Tonic watching the loons to put your life in perspective.

That’s one thing good about the Midwest; housing (and cottages) are affordable for the average Joe.

In light of this current housing situation, we've been considering buying another home (probably a townhome) near my in-laws. They live about 1000mi away so we fly there two or three times a year already. One key aspect of this situation is that we'd buy in a nearby college town where we could rent the place for nine months of the year. In doing this I think that we could cover our principal and interest. We'd plan to live there during the summer months because both of our employers are extraordinarily flexible about working remotely. We'd hire someone to manage the place while we're away. We could probably afford to buy a place outright, but we'd take out a super-cheap 10 or 15 year mortgage instead. BTW, this place is an outdoor destination spot in the west, and we'd have a blast enjoying the environs while there.

We bought a 3br 2ba ski cabin at Lake Tahoe in 1967. It was a great time to buy - that's why it turned out so well for us. We bought the 1/4 acre lot first for $4,000, it was pristine forest land with views of the lake and a wilderness area behind us. We then paid $11,000 to have the 2 story cabin built and another $1,000 for used furniture and our family of 5 was off and away for ski weekends in the Winter and hiking, fishing, rafting and beach weekends in the summer. We and our young family all learned to ski together and we had some of the happiest times of our life at a cabin called "Back O' Beyond". In 1979 the children were all teenagers and had developed other interests and we decided to sell it. The cabin sold "as is" including all the contents for $90,000 giving us a very handsome profit. We also made some money on it by renting it out to neighbors and colleagues from work. We then ploughed the proceeds into a wonderful tri-level condo at the beach that's just a 40 minute drive away. We still own it and it has increased in value from $125K to $600K and as we got up in years and my wife needed two hip replacements we lost interest in using it so our son and his wife and daughter now live in it, rent free, and will own it with a new income tax "basis" when we expire and we don't have to sell it and take a huge, taxable, capital gain.

Bottom Line - In the old days, during our working years, vacation homes were very popular and turned out to be great investments, however I think that game is completely over. For one thing, the 250 mile drive from the Bay Area to Lake Tahoe would take much longer and be much more frustrating because of the increased traffic and also gasoline meanwhile has gone from 35c/gallon to $3.50/gallon. Ski lift tickets have also increased in price tremendously making a family ski weekend a very expensive proposition.

Instead of a vacation house, we are looking at rental properties in and around the northern Nevada area. Housing is cheap and rents seem to support those levels as to be cash flow positive.

Buy = appreciation uncertainty with lots of headaches along the way.
Rent = complete flexibility in dollar amount, location and timing.

I can get uncertainty in the markets without the extra homeowners headaches so I am very happy to rent when and where I want thank you very much. One house is enough to maintain for me.

I would love to hear more details of "theCase's" experience as a Northwoods homeowner. I have been enjoying N. WI for most of my 43 years and look forwarding to living on a lake in WI.

Vacation home? No way--no how (unless I was going to move to the home in retirement).

We thought about doing this a couple times, several years ago. My in-laws won a Jamaica vacation in a charity auction, and they took us with them. We stayed at a beautiful house that had a caretaker family living in part of it. They cleaned, prepared meals, and drove us around. The owners of that property rent it out much of the year, and of course use it as their own vacation home. We thought that might be a nice route, especially if you had a trusted family to look after it like they did.

Some family friends retired to Florida and bought a condo, and after we stayed down there for our anniversary one December, we thought about going in with some family members to buy one together. Of course, we would have rented it out when we weren't down there.

Ultimately, we didn't pull the trigger on either of these ideas, which is probably a good thing, since we enjoy traveling to new and different places when we get away. But it's a fun thought!

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