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View Full Version : Time to buy that second home?



dmc
6-17-11, 3:35pm
With all the doom and gloom on the horizon, I'm thinking it may be time for that vacation home. Any guess on how much more home values can fall in warm winter places. I'm thinking Florida, Arizona, Texas, or Vegas. Or any other place to get away from the cold winters we have been having. I would do the snowbird thing, probably November to March or April.

Any suggestions?

Zippy
7-12-11, 3:42pm
A second home is an energy drain and a financial drain. Just add what your utilities would be plus your property taxes and rent a fully-furnished nice place in the area you prefer. Or, do what many snowbirds do - take a six-month lease on an apartment.

I'm in Arizona and property values have not stabilized. They are still declining. I'd say if you MUST buy, you should wait until one year beyond when prices hit their lowest.

TVRodriguez
7-13-11, 12:40am
I'm in South Florida, and while I'm no expert, what I see in my neighborhood tells me that interest is picking up. My neighbor just put her house on the market (for 50% of its 2006 purchase price) and there was a bit of a bidding war, with the winning bid over the asking price. There are new homes going up on lots that have been empty for years, just languishing (four in within a quarter mile), and now they're all busy with workers nearly every day. There are condos up in Boynton Beach that are going for $35,000. They sold for $178,000+ back in the early 2000's, and I personally think that they are a steal. If we were in the market for a second home, this, to me, seems like a good market. One caveat: lots of the good deals are still for foreclosures or short sales, and those can take a while and can even fall through after a long wait. So, it's not so simple. But still, if you have the patience, the spare cash (most sales prefer cash deals, since there are lots of cash buyers now) and the interest, I think the market is in your favor.

Spartana
7-13-11, 2:29pm
A second home is an energy drain and a financial drain. Just add what your utilities would be plus your property taxes and rent a fully-furnished nice place in the area you prefer. Or, do what many snowbirds do - take a six-month lease on an apartment.

I'm in Arizona and property values have not stabilized. They are still declining. I'd say if you MUST buy, you should wait until one year beyond when prices hit their lowest.

Ditto to this! It'll also allow you to go different places each year if you wanted - one winter in Florida, next year Hawaii, the year after Arizona, the year after Jamaica, etc.... And while vacation home rentals are expensive during the high season, they are much cheaper if you rent them monthly rather than weekly. So would probably end up being much less expensive than buying and owning a vacation house - and certainly alot less hassle. Plus they come fully furnished with all utilities included, and absolutely no maintenance on your part. Bring your clothes and toys and spend your time having fun rather than doing endless chores on a home which sits empty most of the year. Here's two vacation rental sites I ike. Again, make sure and check out the monthly rate as well as the off season/shoulder season rates. For instance, South Florida and the Caribeen can be very expensive during the winter holidays but prices drop mid-January substanstially. www.VRBO.com and www.Homeaway.com

kfander
7-13-11, 3:16pm
You might also consider timeshares. I know that they get a bad rap in some circles but timeshares are selling very cheap right now. My wife and I have a few (three, maybe four; she keeps track of that) timeshares, and they're great for getting away sometimes in the winter. My older brother owned several of them, enough so that he was able to move around from one to another and spend the entire winter in Florida. He has since opted to buy a small place that he found at a good price in Florida, which he rents out during the spring and summer, and we picked up a couple of his timeshares. The cost to buying a timeshare is very low right now, the larger costs being the maintenance fees, so that's something worth looking into ahead of time.

iris lily
7-13-11, 10:36pm
I can't imagine a timeshare ever being a good deal. Sorry.

How much are the maintenance fees alone on these things? It makes no sense to me.

Like someone said earlier, just rent a place, It's not that complicated. There are plenty of timeshare owners who would welcome income from rent.

kfander
7-13-11, 11:52pm
I can't imagine a timeshare ever being a good deal. Sorry.

How much are the maintenance fees alone on these things? It makes no sense to me.

Like someone said earlier, just rent a place, It's not that complicated. There are plenty of timeshare owners who would welcome income from rent.

Then don't buy one. There's no need to apologize to me; I'm not selling the things. The maintenance fees are one payment per year, and they're certainly no higher than rental payments, although I suppose they could be, depending on what you buy into. Certainly, they are not for everyone but it's cheaper than hotel rooms, about the same or less expensive than rental payments, especially since it doesn't cost much to buy into them right now.

Most timeshare owners simply carry their time over into the next year if they aren't going to use it, and if you go off-season you can stretch one week into three. If I am going to go somewhere for a week or more, I can usually find a timeshare near where I want to go, and it's a lot cheaper and better than a hotel room. If I wanted to spend the whole winter in Florida, I probably wouldn't go the timeshare route though.

Mangano's Gold
7-14-11, 12:05am
I can't imagine a timeshare ever being a good deal. Sorry.
They can be, but for a relatively limited segment of the population. Buyers need to be vacationers. The industry got a bad rap, understandably, for a lot of stuff that happened in the 1980's. Now the industry is more dominated by big players like Hyatt/Westin/Marriott, and internationally by large international organizations like Melia (a great Spanish brand with breathtaking resorts). I don't own timeshare, nor have I ever worked in the industry, but I have been around Timeshare since I was a kid. By happenstance more than choice, I've known many many people in the industry and have always seen it more from the inside than the outside.

I don't know anything about the secondary market, but what kfander says makes sense to me. Sales/purchases are often emotional (think exercise equipment bought on infomercials). This, mixed with the poor economy, may lead to good deals for the buyer.

RosieTR
7-14-11, 12:07am
I have a house in Phoenix I'll sell you, cheap ;) Actually, not really. It's so upside-down we'd have to raid retirement funds to get out of it, and since it's a VA loan we're not off the hook even if we did a short sale or strategic default. But I'll rent you the place for the winter!

chrisgermany
7-14-11, 5:25am
I'd rent first for at least half a season in each of the locations that I might like and explore the area from there.

dmc
7-14-11, 2:08pm
I'm in no hurry. My dad has had a place in florida for over 20 years and he alway's enjoyed it. He generally went down in November and returned in March. He actually sold his first place in 2006. But ended up buying again last year as he said he missed the area and all the friends he has made over the years. And of coarse he made out like a bandit on his timing.

I have money just sitting now and its not making much. I have plenty to pay cash for a nice place. My thoughts are I can buy a place in the next few years and hopefully over time the real estate market will at least keep up with inflation. I would get the use out of the home, and later on if it turns out we don't use it or the cost are to high, I can always sell it. It would seem that it would be better to buy now that the market is bad, than wait till things are better. I don't have to buy, so I would only do so if the home was a good value.

I have done well buying raw land in the past as an investment, I sold all of mine in 2005 when the prices just were going up faster than I thought possible. Ive actually looked at buying land again, but raw acreage still seams high to me. But homes have obviously been overbuilt and so there appears to be bargains out there.

freein05
7-14-11, 3:38pm
I think you are going about the decision correctly. As with the stock market I don't think anyone is able to buy at the bottom. If you are getting the value you are looking for for the amount of money you are spending it is a good deal. The home we live in now was our second home for 30 plus years and we never regretted the expenses and hassles because we enjoyed it so much.

jennipurrr
7-18-11, 3:48pm
Interest is picking up in the panhandle...whether that means prices stop declining, who knows? The BP oil spill was a mess last year but I think there is a lot of pent up demand from that. If you are considering that area of FL you may want to consider AL too. We have lower property taxes and the same powdery beaches. We bought a little condo in Gulf Shores, AL in 2009 and it has declined 20% in value since then (ugh)...but, we have also been able to cash flow it with rentals, so its been fine right now (as long as we don't think of selling it!). We have another short term rental with alternate peak/low seasons, so one day we may live half the year in one and half the year in the other and still retain most of the income.

I do agree with others who say rent if you think you want to live in all kinds of places, but we love to go to the same beach, so it seemed like a good decision at the time. Not the best financial decision I've ever made, but I haven't been unhappy with the condo. Just can't wait until its paid off (27 1/2 years at the current pace, ha).