Sell Vacation home or Keep it?

[Jims5543]

Originally Posted by aigel

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

George

Funny, we made a list of pro's and con's for owning this home back when we decided to purchase, this was one of the concerns.

After 3 years, I can say, yes, you feel obligated to go there instead of somewhere else. Now, I love it up there in the mountains. I have nothing but fond memories but yes, we are foregoing other vacations to go there.

If money was good like it was 3 years ago this would not even been an afterthought, I would keep it even if it sat empty.

[KFC911]

Jim, where do you want to be in say 10-15 years? IMO, you home in the NC mountains is literally a "gold mine", and I get the impression would be an ideal retirement destination down the road (not just a "vacation house"). I'm an advocate of being "debt free" also, but investment in NC mountain homes/real estate isn't a bad move either. If you view this house only as a "vacation home"...ditch it, but if you ever think NC is where you want to be (and it doesn't suck ) either working, or in retirement, then find a way to keep it. The appreciation you've seen in 3 years is nothing like it will be ten years down the road imo (and I'm not talking about CA "hype" either).

[71T Targa]

Is it just a vacation home or do you think you'll retire there one day? IMHO, if it's the first, sell. If you think it's some place you'd like to end up, keep it.

Growing up, my next door neighbors had a cabin on the Mississippi. At first they went there most every weekend during the summer, and maybe for a week during summer break. Then they started going every weekend and staying there all summer long. (parents semi retired) Soon enough the parents retired and sold their house 'in the city' and live there full time. This was a place they loved.

[71T Targa]

Keith and I are thinking alike. I just took longer to type...

[turbo6bar]

Jim, don't let the numbers override your gut instincts. The ability to sleep well at night is underrated. Only you know how your gut feels.
best luck to you, jurgen

[Rot 911]

If you can afford it, keep it. Homes in the mountains in NC are not going to be dropping in value.

[KFC911]

Originally Posted by turbo6bar

The ability to sleep well at night is underrated. Only you know how your gut feels....

I know you're fairly conservative in these matters...what would "your gut instincts" tell you were you in Jim's situation? I agree with you about that "sleep thing", but only if one can sleep "on the job"...kidding of course

[jyl]

But is tough times, $300 for gas to go to the vacation house is doable, when other vacations that involve flights, hotels, etc may not be.

Originally Posted by Jim Cesiro

Funny, we made a list of pro's and con's for owning this home back when we decided to purchase, this was one of the concerns.

After 3 years, I can say, yes, you feel obligated to go there instead of somewhere else. Now, I love it up there in the mountains. I have nothing but fond memories but yes, we are foregoing other vacations to go there.

If money was good like it was 3 years ago this would not even been an afterthought, I would keep it even if it sat empty.

[dtw]

Can you get some rental income to help offset your expenses?

[Jims5543]

Originally Posted by dtw

Can you get some rental income to help offset your expenses?

That is the one option I keep revisiting.

If I were to make it a vacation rental, it might actually turn a profit. Maybe.

Then I just have to detach myself from it emotionally for a few years as it will be beat up with careless renters.

I am heading up there next week and I am honestly exploring this option.

This house is an accomplishment to me and I feel like I am throwing it away.

[911Rob]

Jim,
My gut tells me that you should just sell.

I've owned all kinds of vacation homes, including a summer home now.
I sell them all the time, to all kinds of people.
When you start calculating how much they cost you per hour/day, it's time to sell.

From my experience, owners of vacation homes often fall into two categories;
1. Those that use them and abuse them... family memories for a lifetime.
2. Those that have them for status purposes. Stats report vacation homes becoming #1 status symbol among the wealthy.

If you're not prepared to enjoy the property without worrying what its costing you, then you should move on at this time, otherwise you'll just be agonizing over it instead of enjoying it? You can always jump back into the market at a later time.

My kids are young, we live at the lake for the summers..... I don't even want to know what it costs me!

[Shadetree930]

I just sold a vacation home in Sarasota, Fl of all places. Talk about ground zero of the RE bubble!

Here were the datapoints I had to work with in the decision process.

A: We rarely used it. 10 days per year max. It sat empty all other times.
B: It was costing me x per year in operating costs (Taxes, utilities, maint, etc)
C: Florida property was no longer appreciating.
D: I could sell and recover all my costs but profit had evaporated when FL RE tanked.
E: The money I had tied up in this property could be earning interest at x% in a MM fund.

I sold, recovered my total investment, stopped the operational costs and re-invested. The money is now working and my overall costs have decreased.

If it's about money, it's simple. But it's not always about money is it?

In the interest of full disclosure (and P-car content), I pissed away (I mean re-invested) some of the proceeds on this



Because after all, it's not really ALL about money. Sometimes it's all about me!

[911Rob]

Good point; I've never had a vacation home that I didn't use, so I hadn't really considered that point, but it's likely a very valid point.

My summer home is 10 minutes from my residence..... we use it all the time
When we had the ski condo, we bought season passes and used it every 2nd weekend and all winter vacations (Christmas/Spring Break).

If I wasn't using the place, I likely wouldn't own it either.

[jyl]

Jim, you've been under a lot of stress w/ the economy and your business, I know that from being on this board.

If the vac house is stressing you out further, and assuming it is not a unique irreplaceable house/location, then I think you should eliminate the stress. Either sell and bank $50-70K as a safety net, or rent it out and get to break-even. Depending on if NC real estate is going up or down and how fast.

On renting, you can still go up and enjoy it (locked "owner's closet" to hold your stuff, or keep garage locked), and after you stop renting it, you can fix any wear/tear and make it like new again. The ski and beach cabins I've rented have usually been kept in very nice shape, anyway.

[Jims5543]

We use the house, a lot. We are up to it every other month and the wife and kids stay there for most of the summer when school is out, I run back and forth due to work obligations.

I never bought it because everyone was doing it, the house is maned Cat5. The name comes from the reason it was purchased. After getting direct hits from 2 hurricanes in one month I felt it would be prudent to buy a house somewhere where it would be safe and away from possible hurricane strikes. some place to go if we ever see a Cat 5.

I have seen what a Cat 3 will do and it pretty much shuts the place down for 2-3 weeks. A Cat5 will have us looking for a new home.

I really do not care what other people do, or how I look to others, if that was important to me I would not live in a blue collar neighborhood in a 1300 s.f. home. I would not have purchased a 27 year old 911. Now I am perfectly happy in my boy racer RX7 and trust me no one looks at it and say wow he must be wealthy. That stuff has never been important to me.

We already set up a Owners closet and we have been working towards a vacation rental. I personally feel the area I am in is a gem of a area with lots of potential for increased value. The local government has made it VERY hard to build new homes there so locals are having to look at what available.

I am going to meet with a vacation rental company and discuss my option with them. If that place can make me some positive cash flow it may be a good thing.

I am still sitting on the fence over what to do and know when I am in the house next week I am going to get upset and not want to sell again. Its seems like its an easier decision to make when I am not up there.

Thanks for all the input though, its all good and very thought provoking.

[trekkor]

Jim, my wife is in a situation where she is executor of an estate.

The house was listed 6 months ago at $415k. She got 1 offer of $380 and they backed out.

The roof has been replaced, new fences and a kitchen remodel has been done.
listed at $380k...One offer... Today at $330!!

A friend of mine that specializes in estate work said that this may very well be the worst seller's market in California history.

She'll likely take this offer as our friend said in three months the list price could very well be down to $330k.


Sell now and get out of debt!!


KT

[Hugh R]

about 15 y/o I bought a house 2 houses off the beach in Silver Strand, Oxnard, Ca for $245K we wanted to keep it and rent it out for a few years and then rent is summer weeks for exorbitant amounts of monie. We ended up with a long term tenant. The $$ to make it a desirable summer rental were just too much. After 10 years we sold it cause I was like you working on my own and not knowing where next months mortgage for my principal residence was going to come from. We rented the beach house at a small loss year-to-year. My wife regrets selling it, as do I, but we took the profit from the sale and bought down our mortgate on our principal residence from a jumbo to a conventional and went from 25 years left on our mortgage to 15. Now I have about 9 years left on the loan on my house. The interest avoidance is about 360k that I won't be paying out as interest. In some ways I still wish I had the beach house, which has gone up a lot in value, but I can rent a similar or better beach house for a week or two in the summer for about what I was carrying the mortgage on my old beach house, without the liability and obligation. In my older years, and I don't think of my self as old (54) I'm trying to get rid of debt, not accumulate it. As others have said, you sleep better at night.

[DanielDudley]

Jim, I would be considering looking for a job near your vacation home.

What have you got to lose ? IMO, it is your business that is causing your headaches. Check out the economy in another area, and maybe stop business for while - let someone pay you instead.

Thinking outside the box never hurts.

[911teo]

I am a trader in the financial markets... When you do not feel compfortable with a position anymore the rule is GET OUT.

You can ALWAYS get back in when/if you feel better with it.

There will always be homes for sale in the mountains of NC. And if it is not the Dragon it will be Lake Lure or whatever.

The costs involved for you to get out are minimal since you are not using a realtor.

And if house prices start climbing again it means we are out of the woods and probably your business will be picking up again and you'll be able to afford the relative increase in price.

But in the meantime you will have saved all the interest payments from you being debt free.

Be conservative. There is little financial upside in keeping it. Yes it could be an emotional issue and those do come into play and should not be underestimated.

But I go back to the opening statement, if you do not feel right about your investment, get out. It's only the bid-offer spread that will pervent you from going back in again.

[Jims5543]

Procon was nice enough to take some time out of his busy day yesterday and open up the house for me for a buyer to look at it. (thanks Jay!!)

They had their kids with them and the kids were picking out rooms according to Jay. LOL!

They want to go back and measure some rooms and get back to me. I guess I'll just see how this pans out.

I also have a friend/business contact that is interested in it as well, I offered him the place for a long weekend, to go stay there and feel it out.

Without a realtor I can list it at a same price and it will most likely sell. I just need to not get emotional over it.

Matteo is right there is always another chance in the future.