Sell Vacation home or Keep it?

[Jims5543]

I normally do not put these sort of decisions up for strangers to make for me but I am more curious to see what others say. I cam honestly on the fence over this and from day to day hour to hour I change my mind.

We own a Vacation home in the Western NC mountains, its about an hour from Dragons Tail and 20 minutes from Cherokee / Maggie Valley. The town it is in is not a touristy one, more of a small local town a lot of tourists would pass through, I like that a lot.

Now here is my deal, I am really feeling anxious about the next few years and the economy, the business I am in depends on a decent economy. Although I will admit we have been pretty busy these past few weeks to 2 months I am not sure it will last.

If I sell my vacation home (I have 2, possibly 3 buys lined up but not in a hurry) I will be 100% completely debt free, no mortgage no bills nothing. The Audi even goes back on its lease in a couple of months and we own our other cars outright.

If I decide to make the vacation home a Vacation weekly rental I "might"make some money on it but the utilities and wear and tear will be murder.


I did some calculations and to make a trip up to the house by car costs $300 round trip just for the gas I would say a trip up and down runs us about $450 plus we need to stock the house with food etc...

Right now I am also carrying monthly electric bills (approx $60-100 a month) Dish TV and Dish Internet (about $100 a month) Property tax is $450 a year and Insurance is another $450 a year. I also have to have the lawn maintained and that runs about $400 a season.

We are trying to cut our spending right now and tighten up and I personally feel we bought this house 10 years too soon considering our financial situation and how business is.

I bought the house for$180K in rough shape, I installed real hardwood in the entire house sans the bathrooms and kitchen, they are linoleum right now and need to be done still. Car port was turned in to a oversize 2 car garage and the entire house inside and out has a fresh coat of paint.

We also had Terminex do its thing (no termites) and have insurance against any damage <--- that ran about $1800 initially and now its just a maint. fee each year.

Its an emotional decision, we have owned the house for 3 years now and its been awesome watching our kids enjoy it, and having family come visit us there, taking nieces and nephews up for the summer with us etc...

But, like I said I am VERY nervous about how things will be over the next few years. My gut is telling me sell it make a small profit, be 100% debt free and move on. Try again some other day.

[trekkor]

If I had the opportunity to be debt free, I'd take it.


KT

[Porsche-O-Phile]

Sounds like a no-brainer to me. I'd have already sold. Debt-free in a recession is a very good place to be.

[Moses]

Debt free= better sleep at night.

[Moses]

You could probably buy the house back for less in a few years.

[MT930]

If It puts money on the bottom line consistently. Keep it

If It is a liability with questionable returns. Sell it but don't let the sale cost you money. Not sure of your market conditions.

Our rentals have provided cash during rough times. I would not sell them. Depends on your return.

[Jims5543]

Originally Posted by procon

LOL, funny this pops up while we're talking about it on the phone.

LOL!! I hit send during our 1st sentence.

[MRM]

If you want to sell low and buy high, go ahead and sell now. This is the time to buy property, not sell it. If times are going to be tough ahead, you property isn't going to lose much more value than it already has. But any equity you put that money into is going to be seriously at risk. You want a hedge against inflation? Keep the cabin. You want to lock in losses and sell, if not at the bottom, certainly at a low point, go ahead and sell. If inflation does kick in, which is the big worry now, you don't want to sell your real property (which is an inflation hedge) and stick that money into a savings account where the principle gets eaten away every month. Keep it unless you need the money.

[Chocaholic]

Selling now is short-sighted. We're in a media-induced-recession-frenzy that will not last.

[Icemaster]

Dammit Jim,

Decided last month to drop the coin on an addition at the primary vs a vacation home, otherwise we'd talk...............................

Our decision was based on the same criteria, and money's cheap right now. Getting cheaper after today.

[Jims5543]

Who said I would loose On it?

I will stand to profit from $50K-70K on the sale.

Mike - This isn't media induced this is reality induced. Reality is my business is off 50% or more since 2005. My accountant cannot even figure out how I made through 2006 and by 2007 I was barely open.

Now I am downsized from 12 employees to 4 and we still are just getting by. I have not taken a paycheck yet this month and do not plan on one at all this month.

I tried to provide all the info I could but you always forget something.

I have a buyer right now @ $225K without any commissions involved, no realtor. I found them with a Zillow add.

[Chocaholic]

I should clarify...I'm referring to the real-estate market and the general economy. I really have no knowledge of your business or personal financial situation beyond your description above. If selling is a necessity to survival, of course...sell. If you can afford to keep it, I think you should.

[Neilk]

You could always save $100-200 a month by bringing the Dish decoder box with you on vacation if you have dish at your primary home.

[JeremyD]

If I had the opportunity to sell right now I would - cash is king - you never know what opportunities may present themselves in the near future - especially if you already have a buyer

[RoninLB]

NC has a nice economy.

wild guess is.. sell right now if you have to.

RE prices can only decline from today. RE declines usually run for years and there is potential for this one being as big as the 1980s decline.

[LakeCleElum]

Tough choice for sure.....I think my vacation cabin was the best investment I've ever made, and I gotten a lot of enjoyment + it's now worth 6 times what i have in it.

Your market might drop in the short term, BUT - I have several friends retiring in the NE and instead of moving to Flordia, they are now looking at SC, NC, GA. and Tenn......FL has driven them out with their high Prop taxes and insurance.

With many baby boomers approaching retirement age, you place will go up in valve, given the time. SO, I think being debt free is a a great feeling, I'd say keep it as long as you can!!!!!

[89911]

If your even thinking about it, you have already made your decision. Your just looking for someone to talk you out of it. In your first post, you gave no reasons why you actually go there, just the cost of traveling and stocking the place. Sometimes the honeymoon is over and this sounds like it has happened. There is something to be said about picking a place to go every year and just going there.

[Dueller]

Originally Posted by Jim Cesiro

Who said I would loose On it?

I will stand to profit from $50K-70K on the sale.

If you had $50-70K additional in your bank account today, would you buy it and take out a $180K mortgage?

If yes, keep it. If no, it would be gone yesterday.

Just my $.02

[aigel]

I am with the crowd that thinks your money may be safest in existing real estate assets right now, especially in an area that hasn't seen much of a bubble. Even if you get 50k out of it, what are you going to do with it? Buy stocks?

George

[aigel]

Wayne,

Weren't you just telling us in the RE thread that RE is a good hedge against inflation?

I agree that vacation homes can be a drag. For one, you always have to go to the same spot.

George