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Buying a Vacation/Retirement Home (Part 1 of ?)

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Three months ago, I asked whether it was time to buy a vacation/retirement place?. Today, I wake up in Newport, Rhode Island, the historic New England town my wife and I have targeted for that very purpose. Yesterday, we looked at a dozen homes... and in a couple of hours we will look at a dozen more.

Turns out that looking at homes with a serious intent to buy, is a lot more work than I imagined. It's kind of like baseball, 90% is mental, the other half is physical (see famous quotes by Berra, Yogi) . I learned as much in one day as I had learned in a long, long time. I couldn't begin to tell you all the homes we looked at. Since being able to rent it is going to be an initial requirement, we are looking at many times of homes, not just ones geared to suit our needs. We've been looking at homes old and new, some as small as 1500 square feet and some as large as 3600.

The most eye-opening experience has been looking at the homes that are over a hundred years old. I was always told that from a legal real estate perspective, if a room doesn't have a closet it isn't considered a bedroom. Yesterday, my wife and I learned that was not entirely true. It depends largely where you live. When I asked about why some of the bedrooms were able to be called bedrooms without closets, I got a simple answer: The clothes hanger wasn't invented until 1903. I didn't really anticipate that I've had to learn about electric systems (fuses vs. circuit breakers), and sump pumps in the basements. Most visions of a finished basement went out the window pretty quickly. The rooms were not designed for modern furniture or convenience. A number of kitchens were too small to support a dishwasher for example. That's probably less of a surprise after reading about lack of closets, isn't it?

In addition to looking at a number of houses today, we are going to have to call USAA and get our pre-approval. We'll be shopping for mortgage rates. Lastly, we have to figure out how to do all this from California when we move. I anticipate this to be the easy part, but that's often when the best plans fall apart.

Completely Unrelated News 1 - The new military hotel that we are staying at decided that they would renovate the room next to ours at 8 AM. When I talked to the manager, the explanation was that most people were gone by 8AM for class. Seems like a poor assumption to make. We still haven't fully adjusted from our west coast time so it feels closer to 5 AM than 8 AM. They said they'd give us another hour, which was not so generous of them. I suppose it was probably too much for them to have mentioned the construction and asked us beforehand. Maybe I'm old-fashioned, but when I rent a hotel room, I expect to be able to sleep in it at any and all hours.

For those who read my last post, this is a different military hotel than the one we stayed at over the weekend that had notified us there would be no electricity for 13 hours of the day.

Completely Unrelated News 2 - I'll be having a Rex Manning Day - in anticipation of what HP/Palm's great smartphone, tablet, netbook, webOS announcements will bring. Let's hope it doesn't go as poorly as the original Rex Manning Day went. I'm optimistic, as most indications seem to be that HP/Palm is releasing a device with hardware on par with what the iPad 2 is reported to be - same resolution, high speed CPU, and front facing camera.

Last updated on February 18, 2011.

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9 Responses to “Buying a Vacation/Retirement Home (Part 1 of ?)”

  1. tmgbooks says:

    I linked over from Pf Blogs although I have read you occasionally in the past from other links; that as a way of explaining that I don’t know your whole story but I will go through the archives to catch up.

    We bought a vacation/maybe-retirement-place with your same considerations in mind. It is less than 200 miles away but I still wish it was closer. It seems to be that you’re buying across country — good luck with that!

    I would refrain from buying a house as old as you seem to be shopping. They can be quaint but old houses are a pain.

    You might be better off buying land and building if there is nothing newer readily available and you are not flexible on location.

    A lack of closet space will be the least of your problems in a house that old — especially in severe weather climates.

    I bought my first investment property in 1980. You write that you will be renting it out at first but you are planning to violate just about every rule of rental property investing. Good luck with that, as well!

    Old houses require a lot of maintenance. I am sure you know that; but as the landlord repairs will be on you, one way or the other. And even a minor fix can cost you a bucket of money when you’re 3000 miles away! But you probably know that, as well, right?

    What am I missing here that this purchase would make sense to someone with your obvious level of financial acumen?

  2. David says:

    Are you now focusing only on Rhode Island? or are you going to compare other areas like Florida, Nevada, Texas? Would be interesting to see what you can get for your money in the different areas, as well as potential rental income? I think you should really be looking for something that’s cash flow positive, with this real estate market that should be doable.

    • Lazy Man says:

      TMGbooks – We won’t be vacationing in the home until we can move back to our real cost – and then we’ll do it three months at a time. We quickly learned that the old houses are more work than we can deal with from 3000 miles away. We did have to look at them though since they are the majority of what’s available… and I really wanted to share the story about the lack of closets and the invention of the hanger ;-).

      This post was intentionally only covering the first step of the journey. Its goal was to share some of the more entertaining aspects of it rather than the business case. It’s kind of like going used car shopping. The interesting story is where the dealer tries to sell you car without a steering wheel. The story of, “we found a great car in barely used condition, at a tremendous price, so we bought it and lived happily ever after”, is not only boring, but unrealistic (unless you are extremely lucky).

      There is a business case to be made though. The homes are selling at large discount to what they were even in 2000 when I lived in the area. The area is strong with year round jobs (Department of Defense stuff that isn’t going away) and historic tourism. We are not going to buy anything that requires obvious fix up.

      David – Yes, we’re focusing only on Rhode Island. That’s a personal decision with memories and family in the area. We have some ties to Florida, Nevada, and Texas as well. We wouldn’t rule any of those out for 3/4s of the year, but Rhode Island is looking like an ideal place for at least the summer. There’s also a lot of land in Florida, Nevada, and Texas and we feel if we have to wait 10 years we’ll still find something there rather than the very focused area in Rhode Island.

      Matt – I wouldn’t call the vacation home a done deal yet. I don’t know about the ski resorts, but I imagine that they are big during only ski season. There are exceptions (Tahoe comes to mind), but some of the places in Vermont have little rental interest for most of the year. The place we are looking at has year-round interest. It would be rented out pretty much all year like the other two condos we own. I think that would limit the break-ins and vandalism. There is going to be a factor of constant maintenance, we deal with that now.

      I love hotels and motels as well. This isn’t a purchase for the pure vacation aspect of it. We have a timeshare already that we can use for that if we want to. This is with an eye towards living there at least for 3 months of the year in the future.

      Kosmo – It is better than when it the operating system was called PalmOS, which got unfortunately abbreviated to POS for some.

  3. Matt says:

    Sounds like you’ve made up your mind on buying a vacation home, so my point in this comment is not to change your mind – but help others who are on the fence.

    Many years ago I purchased a cottage in a resort ski town. I did so largely for tax purposes – but also because I used to ski…a lot. It turned out to be one of the worst financial moves I have ever made. After an earthquake, break-ins, vandalism, constant maintenance, and myriad unforseen expenses – I unloaded the place. What a relief.

    I love hotels, motels, or anything that I can rent for a night or ten wherever I go. What a concept. You mean, I can leave the maintenance, security concerns, property taxes, and mortgage payments to someone else?? What??? Where do I sign? For those considering buying a vacation home – realize that the vacation you are buying is for the real estate agent involved – not yourself. Vacation home purchases may work for a minority – but you should consider all that can go wrong (and things will go wrong) – not just the relaxing evenings on the deck – before buying.

  4. “I’m optimistic, as most indications seem to be that HP/Palm is releasing a device with hardware on par with what the iPad 2 is reported to be – same resolution, high speed CPU, and front facing camera.”

    I’m not overly fond of the name, though. Seriously, the Face Palm?

  5. robyn says:

    as much aggravation as you have had in re hotels, i would find the $ savings hard to justify. unless you are saving over $100/night [and even then, why suffer?] you are just showing what you think YOU are worth.

  6. My husband and I own a rental home that is over 250 miles from our primary residence. It is located near the beach, but we purchased it at the height of the market (2005) and don’t plan to actually reap money from it for quite a few years. Having said that we visit it often for repairs, maintenance and other purposes and it is one of the best things we’ve ever done.

    My advice would be buy in a place that you absolutely love, because you probably won’t make any profit from it for a long time to come!

  7. Lazy Man says:


    The savings are $100/night, and these are first two incidents in 40+ hotel stays. I’ve had other hotels pull the same things, so might as well save the money.

    One Frugal Girl,

    I would be curious why it’s one of the best things you’ve done. Sounds like a nightmare from your description.

  8. Brian Porter says:

    Buying a vacation home is a big decision. Are you going to rent it out or just keep it for your own use. If you rent it out, you can cover some expenses, but you give up your “exclusive use”. If you keep it for yourself, it can be a huge expense. I have a vacation home in Mexico, and I am going sell it, I just don’t get my money’s worth.

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