I could retire today! I’d have to die in 5 years but… 
No second home here either. We have crunched the numbers…and we can rent someplace for two months for $4000 or so annually for a long time…before we would even come close to the cost of purchasing another place. Plus, we can go to different places each year…or not…and not worry about the maintenance and upkeep on a second place.
Even $6000 a year…and we would still be fine!
My neighbors have a vacation lake house. Every year they feel obligated to go there. I have enough obligations.
I find it more freeing and fun to have flexibility instead of one more place to maintain. It’s nice to travel when and where you are able–no telling what the future hold that can interfere with future travel and other plans.
No interest here in a second residence. We’d rather travel, too. Also would like to be easily accessible to future grandkids.
Every now and then my husband wants to check out condos in Florida. I am totally disinterested in maintaining another property, and would want to spend time at different places, not just Florida. Now maybe if we had bought a short sale many years ago or if they find a way to shove through a WA state income tax. Otherwise I really don’t want it. Though I wonder if you park a boat there, if you could declare it as your home residence? That way at least I could vote in Florida. In Washington, it’s too late to make a difference.
As I mentioned, I have a 2nd house about a mile from the beach. One advantage I have is that I rent it out during the school year and have been renting it out during the summer. It is well located for renting since there is a university 4 miles away for which there is insufficient housing. Originally we were planning on moving there permanently but have since changed our plans. Even though renting it out pays for the mortgage, it is still a hassle that I don’t want to have to deal with in retirement.
So we decided to not get a second home but got a Teardrop RV to travel to places off the beaten path. We are especially interested in areas of Canada. This does seem to be more common in the west.
Teardrops are very cute, but I wonder how they hold up over time. We are allergic to mold, mildew and things generally as they age, so H and we prefer to stay in newer and remodeled lidgings to minimize allergies. We did use a fixed teardrop camper (that was present on s campsite we rented) a few times when our kids were young. We used it as the kitchen and we and friends slept in nearby tents. It didn’t age well with out HI UV and humidity, sadly.
Our second residence is a newly remodeled lake home. We have been going to the lake for 25 years. We use it year round and it is only 90 minutes from our primary residence. Cabin/lake homes are very much a part of the culture in this part of the country. I head to the lake midweek in the summer and the family gathers here for the weekend. It is almost close enough for H to commute to (an hour) but he doesn’t like that distance. Upkeep not an issue at this time. We still travel 5-6 weeks during the year. H could retire to the lake but I couldn’t. We will leave the “cabin” to our girls in a family trust that we have set up.
H just started a new position. He had planned on retiring in 2-3 years but his position was eliminated at his old organization. Not a great thing when you are almost 60! Luckily another organization sought him out within a few weeks and he is back on the retirement saving track. The only difference is he will be eligible for profit sharing if he extends his time to 4 years. That is currently under discussion at our house.
I guess if real estate weren’t so dang expensive in HI and traffic so awful, it might be something to consider. Ah well, not something on any of our lists here at this time.
I’m thinking, incidentally, that RE is a good investment in a zero interest rate environment. But, I could be dissuaded.
If the RE is in good locations, one can rent/AirBnB it. So, one can own two places but only pay the equivalent of one set of operating expenses. One probably needs a management company if one is going to split locations, which would affect the profitability of the rentals.
We share a house in Canada with ShawWife’s sibs. It needs to be razed and rebuilt and I would just as soon be rid of it, but it has deep sentimental significance to both ShawWife and our kids. I’m thinking now is the time to spend the money given the decline of the Canadian $$. I seem to be getting a higher yield on my RE investments than on my fixed income investments.
A management company is going to suck anywhere from 25-40% off the top, and nickel and dime you for every little expense.
Unless you can rent it for a significant percentage of the time, or you have a crazy rental season in the high season, you are unlikely to make a profit, esp. if you have a mortgage.
The taxes get a little complicated - if your average rental period is less than 7 days, it goes on schedule C instead of schedule E. Depending on your income and some other factors, any loss on schedule C may not be deductible. Much of the loss will be depreciation, which you will have to recapture when you sell (unless you hold it until you die or do other complicated tax stuff). And if the property is in another state, you may have to file a tax return in that state as well.
So you may actually come out ahead not renting it and just deducting interest/taxes on your schedule A.
Ask me how I know. 
There may be opportunity for capital appreciation, although eventually interest rates will rise and but a damper on that. That’s pretty much a throw of the dice.
A management company is going to suck anywhere from 25-40% off the top.
Unless you can rent it for a significant percentage of the time, or you have a crazy rental season in the high season, you are unlikely to make a profit, esp. if you have a mortgage.
The taxes get a little complicated - if your average rental period is less than 7 days, it goes on schedule C instead of schedule E. Depending on your income and some other factors, any loss on schedule C may not be deductible. Much of the loss will be depreciation, which you will have to recapture when you sell (unless you hold it until you die or do other complicated tax stuff). And if the property is in another state, you may have to file a tax return in that state as well.
So you may actually come out ahead not renting it and deducting interest/taxes on your schedule A.
There may be opportunity for capital appreciation, although eventually interest rates will rise and put a damper on that.
We have a property nanagement company but it’s just a regular rental, not a vacation rental. The managers vary greatly in their quality. The old one had always been running in the property in the red and the new one has always been in the black, giving us a nice cash flow. Fees for property managers and how well they with with tenants vary.
Old manager had one tenant who died owing a year in back rent–we fired that manager.
I’d do a careful analysis in deciding whether to buy, rent, have a vacation rental, etc. IMHO, it’s worth thoroughly exploring before deciding. Being a landlord, even with a property manager has issues.
I hadn’t thought about the tax issues, @notrichenough. So, I’ll bite. How do you know?
In this case, the two locations I am thinking about are highly desirable. So, renting is probably not that hard – either LT or AirBnB. I do have Schedule C income already as does ShawWife. And, I probably will have to file returns in both states anyway. I also have to file Schedule Es for rental properties, royalties and imputed self-employment income. But, I’ll take a look at management companies in my calculations.
Thanks for the advice on my simplistic thinking.
I understand this.
I am agonizing over my mom’s retirement situation. It would be easier if it was my situation. 
My mom owns a small apartment building in SF. SF has very strict rent control which I hate. My mom does live primarily on the rents.
The rents of my mom’s building are 60 percent of market. This also affects the value of the building. The value of the building is worth 40 percent less because of rent control. Landlords have very little power in SF.
I see four factors however that have caused the cap rates to plummet (increasing the value of real estate). The zero interest rate environment. Asians from other countries are buying up SF real estate. The tech boom. There is a shortage of real property in SF.
I can see the first two factors change. Maybe the third factor changes. I don’t see the last factor changing.
Right now, an appraiser said the cap rate on the building is in the 2s. So, that is like a PE of 40 for a stock. And this apartment is not a high growing stock. Rent increases annually are limited to 60 percent of bay area inflation. This year, rents can be raised 1.6 percent.
On the plus side, the basis of the building is now fair market value at my dad’s death. This is a huge tax break.
Do we sell or not? That is the question? How long are cap rates below 3 going to last? If we sell, the money has to be invested somewhere else. In a low interest rate environment, I’m not too excited about standard investment opportunities. A friend is investing in marijuana. I am not going to do that.
I am finding some of the posts boring so I thought I would post this.
Wait, you’re bored, so you thought you’d liven things up by talking about cap rates? Yawn… 8-|
Lol!
A small change in cap rates can result in a change of value of hundreds of thousands of dollars. For some people, millions.
Rents can increase and the value of a property can decline.
Would be nice if a small change would increase one’s values by millions!
Rent control is crazy. It helps a small number of people, selectively, at a small number of other people’s expense, and drives up rents around it because those lucky enough to be in a rent controlled building never move.