As I write this I am looking out the window from a condo in the mountains in N.C. The views are magnificent, temperature is cooler then the city, people are friendly, and there is much to do and see. We are visiting friends for the second summer in an exclusive area that is populated with people that we know. It is certainly a change from what we are used to and inviting to others and us as a place for a summer or fall getaway. Actually Spring and winter has some appeal as well.
My friends are contemplating buying a condo and are ambivalent. This is a big decision for most, and one should move slowly in this process. Many factors go into buying a primary home and a second home adds another level of risk and enjoyment. Let’s consider the pluses and minuses of owning vs. renting a second home and look at it objectively and not through Rose Colored glasses.
First and foremost is, money. Can you afford it? Let’s assume you have a significant amount of discretionary dollars that would enable you to buy for cash. Enjoyment in life is important, especially as we get older and have discretionary funds and grandchildren. It can give us many options and decisions on where to go for our enjoyment. Flexibility for many is an important variable if you want to see more of the world and the purchase will tie you down from doing that either financially or through the guilt of feeling that you must go to your mountain retreat.
Does the purchase inhibit other travel is a consideration. It is terrible to feel guilty about not using a place you should enjoy. It is also terrible to have a longing to go somewhere else and feel you don’t want to spend the money you would have had but now is tied up in the mountain condo.
Financially, should you put all your cookies in the condo cookie jar? What about financing. Sure, now you have monthly payments, and dues for golf etc. How about owning with friends or family to lower your cost basis. Could be good, or could be a good way to lose friends or family if things don’t work out. What about renting it out when you don’t use the place. Again, talk to those that did and you will hear good and bad stories. Maintenance issues, assessments, slow markets to resell are also factors to consider.
For me, flexibility is the key. Appreciation may not be realized and I don’t want the risk, and headaches, as well as having to worry about my second home. There is too much to see and too much to do. I would rather have the money I would invest to travel.
Joe Glad has been involved in real estate as a developer and working with agents for the past 10 years, primarily in the south. You can follow Joe on his website at http://www.columbiarealestatemlstoday.com
|
|