More points, or....

[BroganMc]

I'm just not convinced buying a 2nd home strictly for vacationing is a wise investment in today's market.

When my dad purchased his condo the cost was roughly 2x his annual salary. It became my family's sole vacation destination. We went to Florida once and then nowhere else, ever. The reason was that my dad had basically put all his vacation budget into the condo. It just didn't make sense to spend it anywhere else.

Now he's in the case where he spends all his vacation time using his timeshares. He travels all over the world 8 weeks of the year and still has time left on his timeshares. The few weekends a year he spends at the beach are mainly so he can survey his investment and maintain the place. Even my siblings only manage a few weekends and a couple weeks over the summer. The rest of the time they opt to travel elsewhere using their timeshares or hotel rewards points. I've long been a critic of holding onto the place just because it feels like a huge drain for my dad. He long since dismissed the idea of retiring to there.

In today's market, that same condo would cost 4x my dad's annual salary. That means a much longer investment and an even bigger demand to vacation there instead of anywhere else.

I can only see ownership working if one was going into the vacation rental business and as a perk got to use it on occasion. But strictly for personal use seems oppressive.

 

[Dean]

Dean - I am impressed with your travel schedule and you have not even retired yet! Wow!! Any "tricks of the trade" you would like to share?

Unfortunately I can't travel that much YET. But I'm positioning myself for what will work best for us in a few years. At the present time I'll use the BG points to pay the dues themselves with about 3 weeks left over and rent out the HH and DVC times when I don't use them. I'll play with the others with a combination of use and trading. We also do a family trip about every 2 years, I have 11 or 12 two BR weeks scheduled for Gatlinburg this summer to do a large family trip using 2 years of the BG points plus an exchange or two. We also have two adult children, one married and have "helped" us use some of the time in the last couple of years.

 

[ldo]

it sucks cash out of them (they do not rent it) and now their kids are into Spring/Simmer weekend activities--they say "why did we buy this--we can never go?" I have another friend who bought a beach house with her family and sold her share back--she got tired of managing the rental $, plus they had hurricane damage and had to chip in $ extra for a new seawall. Plus, she said she felt locked into only going there vs. other places.
For me, we bought a few resale timeshares and some DVC points--2 are summer beach weeks, 1 floating lakeside cabin--the rest DVC. We call them our "poor man's" beach and lake cottages---works for us.

 

[SuzanneSLO]

We bought a vacation condo in Maui before we bought DVC. We are in a very active rental program and the unit is rented about 90% of the time. We can use it as much as we want, but we usually only get about 2 weeks a year due to my work schedule (and need to visit WDW) and have friends/family use it for another week or so. I have even traded it for DVC points!

We are very happy with our purchase, but we bought it at a price at which we comfortable when the housing market in HI was in a slump about 6 years ago. -- Suzanne

 

[stopher1]

Now he's in the case where he spends all his vacation time using his timeshares. He travels all over the world 8 weeks of the year and still has time left on his timeshares. The few weekends a year he spends at the beach are mainly so he can survey his investment and maintain the place. Even my siblings only manage a few weekends and a couple weeks over the summer. The rest of the time they opt to travel elsewhere using their timeshares or hotel rewards points. I've long been a critic of holding onto the place just because it feels like a huge drain for my dad. He long since dismissed the idea of retiring to there.


I can only see ownership working if one was going into the vacation rental business and as a perk got to use it on occasion. But strictly for personal use seems oppressive.

My FIL is in a similar situation. He bought a condo directly on the beach in San Clemente, CA 10 yrs ago. The first couple he was there a LOT, but over the past 7-8, he's barely there. He has 12 weeks of various timeshares, and uses about 6 of those to travel worldwide - plus sets aside 1 week per kid (DW is one of 4) and their families to use his weeks - and the remainder of the time is domestic travel. Now he makes it to the ocean condo MAYBE 2 weekends per year. Not enough to justify the upkeep expense in my mind. The siblings don't get there either. I'd add on more points...if it were my situation.

 

[pb4ugo]

Wow, you guys are great! Thank you so much for such insight. You are really making me think about things I hadn't.

Our thought process was this. It is a real estate investment and we would make money from it if we were to sell it years from now. Our children are young(10 and 5) and we like to go to this destination with them 3-4 times a year now, that would increase if we had a place there. The house or townhome we would purchase is new construction so the up keep shouldn't be too bad. Especially if we go the townhouse route, the HOA fee would cover upkeep of the outside.(lawn maintenance, snow removal) It would be a place our family members(who don't get to travel like we do)can enjoy with us. It is in a development so it's not like it's a house in the middle of nowhere with no neighbors around that would leave it more susceptible to vandalism or burglary. As far as furnishing the place, we would take most of the stuff in our current home and move it there because we are currently changing the decor in our house room by room and we are buying new furniture here anyway. We don't have any plans of renting it out. We also thought, since it is central to so many other great vacation destinations, it would be even better for us.(no airfare) Am I thinking about this the wrong way? I love my DVC and need my Disney fix twice a year but the airfare gets expensive and I would love a vacation spot that that wouldn't be an issue. Also, we go to WDW in the off season taking the kids out of school, I know I won't be able to do that much longer.

Twelve years ago DH and I bought a home in Maine as our vacation home - we travel the 7 hr drive for long weekends most every holiday as well as a week at 4th of july and 2 wks for fall foliage. We used to do president's week up there - until we bought DVC! We furnished 3BRs, LR and DR for cheap by shopping in tax free New Hampshire; and remodeled a galley kitchen. Paid $66,000 then [remortgaged our primary residence and paid cash for the second house!] - could sell furnished for more than $200,000 in today's depressed market - property has water rights to 13 mile pond across the street and is 4 miles down the road from a major ski center. Imagine what we could charge for rent if we ever decided to do so! Property is managed for us thru the winter - keeps an eye on the prop and sees to the plowing and shoveling of decks - charges a most reasonable rate for same!

Our second property is a most affordable investment which will still serve us well after my retirement this July when I can go there on "vacation" and not have to run home after a week or so. It will also serve us well when we are ready to sell it in order to purchase a second home at the Villages in Florida or somewhere outside of Hilton Head Island and simply take a rental for a falll vacation in New England. What will be better than summer at the Jersey Shore, fall in New England and winter in South Carolina or Florida? And we will still travel for a week each to OKW in Feb, HHI in Nov and have just bought an add-on that will permit us New Year's at SSR.

It sounds like you have a great opportunity and a solid plan. DH and I have loved every minute that we could run away to our mountain getaway. I hope it all works it for you and your family.

 

[global_mom]

Unfortunately I can't travel that much YET. But I'm positioning myself for what will work best for us in a few years. At the present time I'll use the BG points to pay the dues themselves with about 3 weeks left over and rent out the HH and DVC times when I don't use them. I'll play with the others with a combination of use and trading. We also do a family trip about every 2 years, I have 11 or 12 two BR weeks scheduled for Gatlinburg this summer to do a large family trip using 2 years of the BG points plus an exchange or two. We also have two adult children, one married and have "helped" us use some of the time in the last couple of years.

Awesome! You have really put in the thought and planning needed to make it work. Enjoy your travels! I hope that DH and I will be able to travel like that when the time comes.

 

[BroganMc]

I'd add on more points...if it were my situation.

The trouble with a vacation home comes with the sentimental attachment you get. When my dad was reconfiguring his retirement plan after my mom's death a couple years ago, one of his major reasons for keeping the condo in the mix was all the work my mom and he had put into the place. Things like "I can't sell the place, it has all those pictures on the walls your mother put together."

For the time being he can swing the extra expense (although currently he's had to shell out more for refurbishing), but I really wonder what the long term is.

If it were me, I'd wait until we could get the best possible resale price (the current housing slump has decreased prices a bit) and then divest of the place. That money would do much more in an interest bearing account. He could probably finance even more future travel with the interest alone. As it stands now, the place is being kept as a future inheritance for my sibs and I to use. (Not sell but use for vacation.)

That's one reason I'm very suspect of someone buying a vacation home in order to one day leave it to their children. There's no guarantee children want to vacation the same way.

 

[global_mom]

That's one reason I'm very suspect of someone buying a vacation home in order to one day leave it to their children. There's no guarantee children want to vacation the same way.

This is a crucial point in the decision making process. There is never a gaurantee that the kids will be interested in it ro can afford its upkeep etc.

We plan to buy more DVC points for our kids to each have but there is no gauranee that they will even want those in another 15-20 years. So we buy those points knowing that there is the possibility that we will need to sell in the future.

I guess my final thoughts are......if DH and I had it to do over again we would have taken our money and put it somewhere else but we would absolutely not have bought a "brick and mortar" vacation home. The good news for us is that the home in located in one of the consistently topped ranked retirement towns in the country. We are not wealthy but the vast majority of residents are extremely wealthy and thus the resale market remains healthy.

 

[BroganMc]

This is a crucial point in the decision making process. There is never a gaurantee that the kids will be interested in it ro can afford its upkeep etc.

We plan to buy more DVC points for our kids to each have but there is no gauranee that they will even want those in another 15-20 years.

That ends up being an argument for DVC's type of "right to use" vs "permanent deed" ownership. When I started buying timeshares the idea of it never expiring was a huge deal to me. I was naive enough to believe my timeshare would at least retain value and annual costs would always be small. Now I realize that costs grow exponentially with time. And in Marriott's case, once a resort is completely member-owned it becomes the job of the members to pay for it. So if Marriott decides to pull out of maintaining it (something they've done to two resorts in HHI and are currently in a war with a Florida property), owners end up owning something not even the resale of their purchase.

Owning a vacation home just takes all the concerns of future growth and magnifies them. That great location today with growing resale values may turn into underwater "former" beach property or high crime areas in a couple decades. That's another reason I put much less value on these giant modern houses on tiny parcels of land. Today the building is modern and sleek, but 20-30 years from now it's antiquated. Land maintains its size and can support entirely new building structures.

 

[stopher1]

That's one reason I'm very suspect of someone buying a vacation home in order to one day leave it to their children. There's no guarantee children want to vacation the same way.

My FIL says his condo is "for the kids" all the time - but only 1 of those kids & her family actually LIKES staying there...and she (my DW) is too far away to get any use out of it but once a year! We would definitely use it for long weekends if we were closer, but alas it's 2400 miles away!! No quick getaways for us.

It seems they were all excited about it when he first bought it...but over time, their times together have gotten fewer and farther between, as well as family vacationing tastes have changed.

 

[Dean]

Awesome! You have really put in the thought and planning needed to make it work. Enjoy your travels! I hope that DH and I will be able to travel like that when the time comes.

My wife hates planning and even thinking about timeshares but sure likes the travels they have produced and enjoys the units and resorts themselves. We owned fixed weeks for years in Aruba and she'd ask periodically why we owned in Aruba if we never go (had never been). My response was that I had bought and sold a few over the years making a little $$$ and we'd traded to places like Cancun, HI, Gatlinburg and DVC. Her response was always "oh" and we moved on. She's such a concrete thinker that she has trouble deciding what's for dinner or where to eat until she's hungry.

To the idea that I've put thought and planning, I'd say anyone who owns a timeshare and doesn't is simply asking for trouble and that includes DVC.

My FIL says his condo is "for the kids" all the time - but only 1 of those kids & her family actually LIKES staying there...and she (my DW) is too far away to get any use out of it but once a year! We would definitely use it for long weekends if we were closer, but alas it's 2400 miles away!! No quick getaways for us.

It seems they were all excited about it when he first bought it...but over time, their times together have gotten fewer and farther between, as well as family vacationing tastes have changed.

Timeshare owners are often the same way. As BroganMc noted, the RTU issue does come up with people taking all sides. It is a legitimate discussion but likely doesn't have much applicability until you're under 35-40 years and isn't a large deal until under 30 years UNLESS THERE'S A COMPARABLE PRODUCT THAT'S SIMILAR BUT BETTER. Thus the problem with DVC 2042, the OKW extension and new exp dates frame and draw attention to the 2042 dates and thus will have a larger impact on them than if ALL the resorts ended in 2042.

 

[BroganMc]

She's such a concrete thinker that she has trouble deciding what's for dinner or where to eat until she's hungry.

On behalf of your wife, can I smack you with a rolled up newspaper for that remark? Seems a tad oh snooty, not that you meant it that way I'm sure.

It is a legitimate discussion but likely doesn't have much applicability until you're under 35-40 years and isn't a large deal until under 30 years UNLESS THERE'S A COMPARABLE PRODUCT THAT'S SIMILAR BUT BETTER. Thus the problem with DVC 2042, the OKW extension and new exp dates frame and draw attention to the 2042 dates and thus will have a larger impact on them than if ALL the resorts ended in 2042.

Which is why I continually discounted add ons at BWV and VWL. Of all the DVCs, sans SSR, those are ones I can see wanting to book at 11mos.

When my dad did start buying Marriott timeshares he did so with an idea of using them himself until fate forced him to leave it to his kids. But he was in his 70's so the idea of leaving it to them was not something 30 years down the road. (We all hope he's around that long but who knows.)

As it's worked out the only ones who really use his timeshares are my sister and I. (I actually own them with him.) My brothers both purchased their own timeshares and set their own schedules. It's been freakishly hard to get everyone to agree on the same time and place for a group vacation. When kids grow up they tend to ignore their parents and go off on their own routes, boys especially. It never ceases to amaze me how many parents are stunned their obedient 8 yo's turn into absentee, grumpy teenagers and young adults.

 

[SamSam]

On behalf of your wife, can I smack you with a rolled up newspaper for that remark? Seems a tad oh snooty, not that you meant it that way I'm sure.

Exactly my thoughts. I really enjoy, and respect Dean's thoughts and advice on timeshare's but .....Dean,the remarks on your wife came across as a put down to her...tell me it ain't so!

 

[Starr W.]

It never ceases to amaze me how many parents are stunned their obedient 8 yo's turn into absentee, grumpy teenagers and young adults.

My aunt and uncle found that out years ago with the 2 youngest of their 4 sons.

With my 2 sons, I figure I'll have to pitch the eldest out of the house, the baby will get a job and move and I know I'll be lucky to hear from him once a year(he's very pigheaded and independent at age 6).


Back to vacation homes, one of our neighbors is from Maryland and her grandmother owns a house at the beach. The daughters can't wait to sell it and cash in when she dies and the grandkids want to keep it(they go every summer).

 

[global_mom]

It never ceases to amaze me how many parents are stunned their obedient 8 yo's turn into absentee, grumpy teenagers and young adults.

Tell me this does not really happen! LOL

Oh how I dread the day when they say that they dont want to be with me. Will DH and I become "uncool"?

 

[tomandrobin]

Oh, yes it really does happen. We've been in the uncool zone for a couple of years now. It really sucks!

 

[ACDSNY]

Tell me this does not really happen! LOL

Oh how I dread the day when they say that they dont want to be with me. Will DH and I become "uncool"?

But then they get a little taste of what life is really about and then they run right back home.

Our oldest always wants to travel with us, but our youngest is still saying he doesn't love Disney. I'm sure once his son gets a little older we won't be able to take a trip without them.

 

[tomandrobin]

But then they get a little taste of what life is really about and then they run right back home.

Our oldest always wants to travel with us, but our youngest is still saying he doesn't love Disney. I'm sure once he's son gets a little older we won't be able to take a trip without them.

Tell me about it. We can't shake the 22 year old. He keeps letting us know that we should count him in on any family trips. Needless to say, we are going to Hawaii in October, and we have not told anyone....shhhhh!!

 

[bpmorley]

Vacation Home!!!! hands down