Just wanted to get some opinions on this. The home I own is probably on the nicer side of average for where I live. I love the location. It's near some great outdoor activities, and I love that about it. My biggest complaints are that we only have one full bathroom and no garage. I can deal with this, though. In the future I could see maybe even adding on. The other issues (more minor, in my opinion) are that I have a fairly small yard (which I really don't mind), and I'm not a big fan of my neighbors. This leads me to my question: I can see my wife and I being able to pay off our house within the next 5-10 years. We should be able to get more than what we payed for it, should we sell it. Once we pay off the house, the question will be this: Should we sell the house and buy/build a dream home, or should we buy a modest (but decent and enjoyable) vacation home/condo? I've always wanted a house in the Carribean. It'd be especially nice to visit during our harsh Winters. What would you do?
Use your credit and the current low interest rate to buy the fastest appreciating asset you can. (In Houston and probably no where else) if your house appreciates at 2% per year, your equity grows more per year in a $200K house than it does a $100K house ... but your taxes and expenses go up faster too. You never want the most expensive house in your neighborhood (ie. adding on) because it's harder to sell and it's per square foot appraisal is brought down by the comparables the appraiser must use in his evaluation. Reducing the yard space makes your home less attractive to families with children. Strong HOA, good schools , proximity to high wage earners work (like our energy corridor) Vacation homes are expensive, risky and limit your vacation choices. They are easily rentable.
Even though I work in architecture I think the smart thing to do is keep one nice home and skip buying / building a vacation home. A vacation home is nice but you have to consider how much you use it. It's one thing if you go there every weekend and it's another if you only use it two weeks out of the whole year. You are then paying for upkeep, mortgage and etc. for a house that you get very little use of out of. As far as keeping your home as appreciable asset Dubious is right about never wanting the most expensive home in the neighborhood. At the same time you have to consider the market and where it's heading. Houston may be appreciating but as someone who has lived in a house that has been depreciating the last few years I can tell you that the days when your house was a guaranteed safe sound investment are over and a house isn't exactly a liquid asset. My advice in general though is to consider where you are in life and what makes you comfortable. Do you really need to live in a mansion with a man cave and humidor or will maybe adding another bathroom be enough? I don't think you should live in something just for resale or just because you see it on fancy home shows.
You also do not get any tax benefits from your vacation home. All property tax and mortgage interest is non tax deductible. My biggest problem with vacation homes: you are stuck there for all your vacations. Just spend that money on nice hotels or rentals each year.
Not quite true. You can deduct property tax on multiple homes. Also, I believe, if you rent out a second home 15+ days a year, you can treat it as a rental property and may get to deduct mortgage interest on it.
if it's just you and your wife, i would stay put. why do you need more than one full bath? adding another bathroom only leads to using the other one 10% of the time. what's the point then? also, large yards are overrated and require a lot of upkeep. do you really want to spend your weekends maintaining it? some do enjoy the work, is it for you? bad neighbors are probably the biggest reason to move. can't imagine living next to people you can't get along with. as for the vacation home, i'll echo everyone else. rent it.
Buy a boat. A **** boat. I've always wanted a **** boat. Just sail around the world, ****ing all the time, middle of the Ocean... **** **** ****ing.
The best description of I've heard of a boat is this. A hole in the water surrounded by wood or fiberglass that you throw money into.
I'm thinking when I turn 36 I will buy a huge insulated vessel that will be impenetrable by even the sharpest of ice bergs. Then I will sail to the north pole with a harem of Russian stewardesses and breed Walrus children to do my bidding.
If you like the house and location where you're at now, stay there. Make upgrades as necessary. Rather than tying your extra money up in another mortgage, use some of the extra money to take vacations to different places each year. And save. Even if you're already investing 15+% of your income to retirement/long-term savings, invest more. You could accumulate an unreal amount of wealth by paying off your house that soon and investing.
some advice: never tell your friends/family about your vacations home(s) and other residences my places are constantly being utilized by others, to the point where i've used hotels because friends were in my place
I would prbably only buy a second home if I could spend 2-3 months a year there. By then, my job may allow me to.
Have a nice home in a vacation spot. How long would you be at your vacation house? Whole winter, whole summer?
