Author Topic: 401k for 2nd home or stop contributing and save  (Read 1301 times)

longrun

  • Newbie
  • *
  • Posts: 6
Re: 401k for 2nd home or stop contributing and save
« Reply #10 on: August 09, 2020, 10:09:14 AM »
Thank you Pupil. My thought is to own the vacation property for 10 years and then sell and go back to just a primary home. and thanks for the bogle recommendation.


stahleyp

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 4174
Re: 401k for 2nd home or stop contributing and save
« Reply #11 on: August 09, 2020, 11:21:50 AM »
Why not take out a home equity line or mortgage on the first property?
Paul

SharperDingaan

  • Lifetime Member
  • Hero Member
  • *****
  • Posts: 3733
Re: 401k for 2nd home or stop contributing and save
« Reply #12 on: August 09, 2020, 11:27:41 AM »
Key consideration here is a planned sale within X years.
It is not intended as a 'legacy' property, but to get best use out of it - you need to have the kids/grandkids visit (& use the place) ROUTINELY, not once in a while. They also need to be visiting Summer AND Winter, and NOT just over the holidays.

Talk to those in their 70's. Ask them if they would do it the same way again - the practicality, NOT the memories.
It's often a lot smarter to just rent the same place for 2-3 months every winter, and a different place in the summer. Sharing the rent with another family, as well as your own. If your family can't make it one year - do a shorter stay at the ski lodge, and don't rent the chalet.

Keep in mind that you could also do a one-time rent/share of a furnished island villa (Canaries, Caribbean, Greece, Turkey, Polynesia, etc) for 1-3 months. Alternatively a major city (Buenos Ares, Barcelona, Casablanca, Lisbon, etc). Get to/fro via ship &/or direct flight, and a different location every year. Ski 3 months, travel 3 months, stay at home 6 months.

Just because others own a vacation property, doesn't make it smart.

SD
 
.
« Last Edit: August 09, 2020, 03:06:23 PM by SharperDingaan »

Gregmal

  • Hero Member
  • *****
  • Posts: 4768
Re: 401k for 2nd home or stop contributing and save
« Reply #13 on: August 09, 2020, 01:30:58 PM »
A vacation property is awesome if you use it enough. But the truth is that when you are not using it, its a total drag on your finances and more of a headache than a joy. So you have to weigh that out. Assuming you arent renting it out, its a total write-off. That you cant write off.

If you do not intend to own longer term, I'd stick to renting, although then you have to deal with the inconvenience of seasonal rates, availability, and lugging back and forth all your stuff.

It also comes down to what you're looking to buy. I know plenty of folks who live in million dollar homes that own $150-200k vacation homes in the Poconos/Adirondacks. Is it a palace you're buying, or just a place to rest while you enjoy the area? $200k in a tax friendly state, on a home that you dont need to be in tip top shape....much more doable than if you're looking for a second home type vacation place.