No longer an owner!!!!!!!!

[Miss Kitty]

You own a vacation home instead of renting one for a variety of reasons, but IMO financial gain isn't one of them.

If you can make the $ work, more power to you, but I think most of the benefits are intangible. It's certainly much nicer to arrive to your bed, pj's, furniture, and decor, but you have to spend quite a bit of time there before it is "cheaper" than a rental a couple weeks a year.

;-)...good post.

When we bought our place in 2001...we of course were hoping to not LOSE money:roll:, but flipping or making a gajillion dollars was not what we were after. It was more of an investment in our happiness and enjoyment after many busy, long years of working and raising our family. Renting it out has been a test to see what we bring in versus the wear and tear on the second home we love. So far, we have been very pleased with our rentals and the condition of our home. And that my friends is our STORY!

 

[Beachcoma]

I've seen this man - at SoWalmart.com.

 

[Searcher]

Well, you have to get 6% or more when you sell and you have to generate good rental income every year for the life time of the investment. Also the house can not experience any major damage from a storm. That's a lot of 'ifs'.

I guess it comes down to what you like to invest in and what ancillary gains you might get from your investment. For example, like a lot of folks down here, maybe you plan on retiring in the house at some point. This is the type of market I think we are back to now - you buy for reasons other than appreciation and income.

Myself I'm looking for steady, reliable income flow - I don't think vacation rentals are well qualified to provide that. You might be looking for something else.

After laying low for months (years?) I'm ready to flop back into the conversation. We will start to build in SoWal in Spring '09, ready for the '10 season. Why? Truth is the build-out has arrived and lots ain't selling. But, with the decline in building costs and our low basis (purchased lot in 2001), I think we will be OK. Our projections are that SoWal rentals will cover half or more of costs. Our retirement is 8 years off. God willing, in our retirement we will then split between SoWall, Asheville and Midtown Atlanta - three great places.

We own several rental properties in Atlanta. This year they are steady but not appreciating though all costs$$ are paid by renters. 8 years from now everything will be different (we hope in a positive way). Bottom line is that one needs to take a long view with real estate.

Now is a miserable time to be invested in real-estate but the pendulum will swing again.

 

[dunefrog]

Well, you have to get 6% or more when you sell and you have to generate good rental income every year for the life time of the investment. Also the house can not experience any major damage from a storm. That's a lot of 'ifs'.

I guess it comes down to what you like to invest in and what ancillary gains you might get from your investment. For example, like a lot of folks down here, maybe you plan on retiring in the house at some point. This is the type of market I think we are back to now - you buy for reasons other than appreciation and income.

Myself I'm looking for steady, reliable income flow - I don't think vacation rentals are well qualified to provide that. You might be looking for something else.

Yup. That was the point of my first comment. I'm looking for something else. I need a place to put excess cash outside of my company and the stock market--a place that will not increase my taxes but provide long term capital appreciation (I'm under 40) and allow my family to enjoy visits to the best beach in the world.

A generalization was made above that buying Sowal property as a financial investment would not make sense for anyone. I disagreed and suggested that maybe that is true for many but not for all, namely me .

Sorry to take things off on such a tangent. It just bothered me a bit that the generalization was made and I feel strongly that it does not apply in all cases. Maybe there are some others considering purchasing here with circumstances similar to mine. Just wanted to encourage them to think through all of these factors and take the plunge.

 

[Paula]

To each his/her own, of course. Owning in SoWal (or anywhere), especially for a second home isn't for everyone, and it's a very wise decision when someone realizes it's not for them and gets out, especially coming out a bit ahead in this market.

For me owning in SoWal has been (like Kitty) a real highlight in my life (and life's been pretty darn good overall). SoWal has been a retreat in good times and bad, a place to build memories with family and friends, a grayt place to meet new friends (some of whom are already becoming good old friends). It will be a retirement place someday (winters are still a lot warmer than they are in Michigan and that's good enough for me), it's a place I can work from as well if I choose to do so (given the Internet), it will be a place where my children will bring their children. When I bought here, I figured that paying the mortgage was also a form of "forced savings" - kept me from spending money on other things that didn't have the same emotional payback. From a pure investment perspective, not sure if I did better putting the money into SoWl property than if I put it into the market since 2003, but the "investment" part of the decision came second to the "what a good life and how lucky am I to be able to do this" part of the decision.

The rental income definitely doesn't cover all expenses at this point, so anyone buying in SoWal shouldn't assume rentals will pay all, or even most, of their expenses (I can only speak for the short term). But rentals sure help and our renters have been great overall. No more wear and tear than we would do to the place if we were here year round (at least so far).

 

[30ashopper]

Yup. That was the point of my first comment. I'm looking for something else. I need a place to put excess cash outside of my company and the stock market--a place that will not increase my taxes but provide long term capital appreciation (I'm under 40) and allow my family to enjoy visits to the best beach in the world.

A generalization was made above that buying Sowal property as a financial investment would not make sense for anyone. I disagreed and suggested that maybe that is true for many but not for all, namely me .

Sorry to take things off on such a tangent. It just bothered me a bit that the generalization was made and I feel strongly that it does not apply in all cases. Maybe there are some others considering purchasing here with circumstances similar to mine. Just wanted to encourage them to think through all of these factors and take the plunge.

I think we're all in agreement. SoWal real estate isn't a money making machine but it definitely has its merits - we all come here and buy land because we love this place. The market over the last five years turned this upside down but I think we'll be getting back to where we were in the 1990's. Overall I think that's a good thing - the quality of life factor will reign supreme again. Amen to that.

 

[tistheseason]

aaahhhh. . .the intangibles that make owning a second home in Sowal great:

1. We go to the beach more -- because there isn't an incremental cost to going.
2. We vacation with my family more because we all own it together
3. We vacation with our friends more because there is space and there isn't an incremental cost to bring them
4. We get invited to our friends vacation places in return
5. We know the "lay of the land" - where to go to the Grocery store, what restaurants are kid friendly, what is the closest hospital, where Dr. Skunky lives in case of emergency
6. I know the kitchen has all the necessities that I need
7. There is always a bottle of wine waiting on me there -- after the 6 hour drive w/ 2 kiddos
8. If I leave something behind, it will be waiting on me the next time! (I have opened a drawer before and found it full of my kids pj's from 10 weeks previous ---ooops!)
9. We have bikes there and don't have to go through the hassel of renting them every time
10. Etc, etc, etc! ( I could go on and on, but I think you get the point!)

 

[TooFarTampa]

I think we're all in agreement. SoWal real estate isn't a money making machine but it definitely has its merits - we all come here and buy land because we love this place. The market over the last five years turned this upside down but I think we'll be getting back to where we were in the 1990's. Overall I think that's a good thing - the quality of life factor will reign supreme again. Amen to that.

The market will normalize, and it will be for people who really want to be here, and they will be able to reap some benefits while enjoying their property.

I doubt our property will ever be cash-flow positive overall, but if we hang onto it long enough, there will be an income stream.

Let's not forget that SoWal has a VERY generous rental policy for owners, particularly owners of single family homes. I know it is hard for some to believe but there are many beautiful areas where short term vacation rentals are simply not permitted! Even Sanibel Island requires its houses to be rented for a minimum of 1 month. If you want to rent for a week there, you have to find a Sanibel condo or hotel room or go to Captiva, where supply is limited and prices are very high.

Since SoWal is completely unincorporated, property taxes also are much lower than they are in other incorporated areas around the state. When you factor in the height restrictions, the height above sea level, and of course the world famous beaches -- you can't convince me that SoWal isn't a great place to own ... IF you are one of those people who is meant to own a second home. Some people just aren't. Mr. TFT and I dreamed of owning at the beach even when we were in college. And I know that our kids are going to have great memories of coming here, and we are making great friends. So to us it is all worth it.

 

[TooFarTampa]

By the way, this is a really good thread, and I hope happyrenting doesn't feel bad for starting it. The pros and cons will resonate on one side or the other for all the would-be buyers reading it, and aid in smart decisions. In the end, we want people entering the market with their eyes wide open and feeling good about their decision.

 

[gardening1970]

This is a really great thread - I have enjoyed reading each post. I am on the sidelines for now, but may be a SoWal owner someday (after much thought and more savings).

Some of you are particularly good at expressing the emotional benefits you receive from owning instead of renting. The idea of creating a family gathering spot is of real interest to me... somewhere my kids can bring their kids... some place in which I have a vested interest. That is a different kind of "investment" and one that is very appealing to me.