Buying a second house.

[disneysteve]

Thanks again. Our monthly expenses are about $13k, including tax payments in excess of withholding. That's about the same as take home income from pension, social security and wife's wage and private practice.

Is that the current expenses? If so, what are your plans to cover the added expenses that will come with owning a second property? Will you trim spending in some areas or do you plan to start drawing down savings?

[TexasHusker]

Thanks for comments. I thought maybe it would be good not to tie up so much money in the house. The loan allows us to retain more money in stocks/bonds. Does that make sense?

I would borrow the money, and I'd rent that house as an overnight rental when you aren't using it. You'd probably do very well.

[bigdaddybus]

I would borrow the money, and I'd rent that house as an overnight rental when you aren't using it. You'd probably do very well.

I had a similar thought if I was doing this in my 30s, 40s or 50s, not sure I would want the hassles at 69 yrs old.

[disneysteve]

I would borrow the money, and I'd rent that house as an overnight rental when you aren't using it. You'd probably do very well.

That might be true, but it also very much changes the feel of the 2nd property from their personal space to something else. We've rented homes many times so I'm grateful that people do it, but if you are renting the place out, you need to handle the place very differently than if you are the only one living there.

[TexasHusker]

I had a similar thought if I was doing this in my 30s, 40s or 50s, not sure I would want the hassles at 69 yrs old.

I might do it at 69. Not sure about 70.

[Fishindude77]

Our 2nd place could easily fetch $3500 / week as a rental all summer long, however we've chosen not to rent it. As it stands, we can get by just fine without the rental income, and we don't want to have to stash away and secure all of our personal stuff each trip, clean out the fridge completely, move or lock up the alcohol & fishing tackle, put away all of the grand kids toys, etc., etc.

I guess if times get tough or we aren't using the place as much, rental is an option. For now, we are going to keep the place to ourselves. I'd guess 80% of the lake homes around us do not rent.

[disneysteve]

we don't want to have to stash away and secure all of our personal stuff each trip, clean out the fridge completely, move or lock up the alcohol & fishing tackle, put away all of the grand kids toys, etc., etc.

We have rented houses where the owners didn't do those things. It was kind of strange but kind of neat at the same time. It made us feel like we weren't renting some sterile property but rather staying in someone's home. The owners told us we were welcome to use anything in the fridge or pantry but to please replace anything we finished.

On the flip side, one guy we rented from was new at doing it and really didn't give it much thought. He failed to leave any storage space at all for renters. There was not a single empty drawer or closet for us to put our clothes. There was no cabinet space in the kitchen for us to put our food. There were 10 bottles of hair products lined up in the tub along with a used bar of soap. I gave him a very thorough report when we left about things he needed to change if he was going to keep renting the place.

[StormRichards]

along with a used bar of soap.

Thank you for grossing us out this morning

[TexasHusker]

All of our vacation rentals have a lot of our personal stuff in them - photos, keepsakes, etc. We find that guests appreciate this and treat the house very well.

We had one cabin burn down recently - it had about $30,000 worth of antiques in it of various kinds - a 250 year old grandfather clock from England, a couple of 200 year old armoires, two antique persian rugs, a river otter taxidermy mount from the 1800s, etc.

We owned that cabin for 6 years and never had a thing stolen or harmed that I recall, though there was a break-in and the burglar stole a cheap rug and the TV - he obviously had no knowledge of antiques.

We did have guests buy the home "gifts" several times - one purchased us a beautiful hand made wooden sitting chair. We put it by the fireplace and it sat there for about 3 years before the fire.

That cabin produced about $30,000 a year in rental income, about $20K a year after all expenses.

[disneysteve]

Thank you for grossing us out this morning

You're welcome. Happy to be of service.

To the point of the thread, though, if OP wants to rent out the house, that's fine, but it means furnishing and stocking it very, very differently than if it will strictly be their 2nd home.

[disneysteve]

All of our vacation rentals have a lot of our personal stuff in them

Nothing at all wrong with having personal items in the house. We rented a wonderful chalet in Stowe, VT one summer. It was clearly someone's home but the place was nicely decorated, the owner was wonderful, and he had it set up to accommodate guests with adequate storage space along with his own belongings that were still there.

[Santamonica]

If I rented out the house from time to time would I deduct some cost of furnishings or other expenses as a business expense on my taxes? Probably more trouble than it's worth?

[LivingAlmostLarge]

Keep and keep mortgage until you decide what you want to do. I think you can afford it with the pension and SS. Maybe the mortgage will motivate you to decide.

[danielaa]

Your decision is not bad after all. If I were you, if no one is living in the first house, you might want to have it rented out so you get daily income without the hassle of working. Also, buy a car too if you want It makes lives easier

PS I hope you have a good life ahead of you!

[danielaa]

not reckless unless you dont have money, then it's reckless buying