Second/Vacation Homes

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Originally Posted by TStriker

Agree with your overall points, but it was never the min wager earners. It was the middle class, who's relative spending power has shrunk dramatically.

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Not only the cultural change of people wanting these properties to be turnkey, but the idea of monetizing them. If you told someone in the 70s that you could rent a house/condo/cabin anywhere in the world in a few minutes with a supercomputer everyone carries in their pockets, their head would explode. Same goes for living in $100k vans.

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I don't know man, a 225k lake house in the 80s like EasyRdr posits was always an upper class purchase. Median household income for the US was 27k in 1988. No middle class person was buying a quarter million dollar lake house (all in once you close and furnish the joint) in the 80s. Its easy to look at that number and be like yeah a middle class guy should be able to afford that, but people forget just what middle class was in the 80s.

I certainly think monetizing the family cabin has certainly become much easier compared to days of yore. I don't think it was impossible to do so back in the day but it certainly wasn't a couple clicks and some iphone photos and shake the money tree either.

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— perfect for that little mountain parcel you bought for $25k.

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Originally Posted by plugboots

Yes, I started a thread about goofy wives, but mine is a veeerrry good attorney.
My MIL owned a cabin, it’s been an LLC since the 90’s, she died, now the 3 kids get to decide what to do.
None of the 6 grand kids want anything to do with it, so it’s gonna be sold in a few.
The end.

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Sad ending.
Hopefully my story ends better.
I’m third generation in the cottage. Fourth generation in the community. With an LLC it has a better chance of surviving. Particularly if I can help fund a trust for upkeep and expenses.
I am fully aware of what a suit for partition is. But reading that book made me realize how ugly it could be. LLC operating agreement can have lowball buyout terms for anyone that wants out. Way better than the nuclear option.

I was thinking more of my grandparents buying (with a group of friends) a large cabin in northern WI during the 1950s wave of middle class prosperity. And that was on top of having two young kids and owning their own home. My parents couldn’t have even dreamt of that in the 70s & 80s. Money was just too expensive. So yeah, that ship had sailed by then.

Towns in the mountain west are too accessible now between airports that go to meaningful locations, paved roads, and cars being way more comfortable for long drives. Add on remote work…

And also public lands are not developable anymore. Around my area there’s a lot of grandfathered cabin leases on state/fed land that they are either now auctioning off the properties or not renewing the lease. Good luck building a new cabin on public lands these days.

I think to have equivalent BFE location to what Montana or Idaho or whatever was in the 1960s, you’d be looking at far north BC, the Yukon, interior Alaska, etc.

Thanks boomers.

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Originally Posted by AdironRider

I don't know man, a 225k lake house in the 80s like EasyRdr posits was always an upper class purchase. Median household income for the US was 27k in 1988. No middle class person was buying a quarter million dollar lake house (all in once you close and furnish the joint) in the 80s. Its easy to look at that number and be like yeah a middle class guy should be able to afford that, but people forget just what middle class was in the 80s.

I certainly think monetizing the family cabin has certainly become much easier compared to days of yore. I don't think it was impossible to do so back in the day but it certainly wasn't a couple clicks and some iphone photos and shake the money tree either.

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That chart posted about incomes tells the story though. In the 70's you competed with 30% being upper income from a pool of 150M americans so maybe 45m people, now at 50% of nearly 330M americans you have 165 million people gobbling up a finite amount of woods and water spots. Hence higher prices everywhere.

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Originally Posted by ncskier

That chart posted about incomes tells the story though. In the 70's you competed with 30% being upper income from a pool of 150M americans so maybe 45m people, now at 50% of nearly 330M americans you have 165 million people gobbling up a finite amount of woods and water spots. Hence higher prices everywhere.

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That's not what the chart is showing. Aggregate income is the share of total combined income that goes to each group. Upper income individuals receive 48% of total income, but don't make up nearly 48% of the population. It's a consolidation of income in the upper parts of the income distribution.

But the story still stays kind of the same. The upper income group may not have changed much in size, but they have relatively more money, so goods that are targeted at them can become even more expensive and so further out of reach of the middle income group.

The number of goods within reach to upper income groups also increases with a similar effect. See new thread: Third Vacation Homes.

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Originally Posted by Mazderati

The number of goods within reach to upper income groups also increases with a similar effect. See new thread: Third Vacation Homes.

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Gotta have your lake house for summer and ski condo for winter. And pimped out sprinter for traveling between.

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Originally Posted by TAFKALVS

Gotta have your lake house for summer and ski condo for winter. And pimped out sprinter for traveling between.

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hey I resemble this thought

this is a great thread been reading but haven't had time to comment
been a long day and instead of finishing it like I should I'll finally comment on trg cause I got the goods

Part One:

I had an issue a few years ago and wanted to buy a second home in some podunk town no one has heard of. Then some life changes happened, pretty much it was like taking a stick and putting it in my ass. So I decided that buying a Sprinter Van would be much more reasonable than buying a shit hole house for pennies on the dollar. Somedays I feel like I missed the boat and made a bad decision because the houses I was looking at are now double in price. I have a million projects in life and having a house project hours away seemed dumb. So I took on a van project. Over all I'm beyond stoked about the van and what it has given me in return. Saturday night we were parked a few steps from a thousand foot cliff, our chairs set up on the edge, proceeding to get hammered, no one was around for miles, and the La Sal's were magically illuminated at sunset like the curves on a beautiful woman almost a hundred miles off in the distance. The ability to go anywhere and see everything is amazing. Soon enough I will purchase the second home with the purpose of moving there fully someday. Would not trade the freedom of the van for a second home at all.

Part Two:

I grew up with second homes. Mkay. The main second home was a lake front property, it was more of a shack, three season cabin on a lake than a "second home." It has been in my family for some time and my old man is the third generation owner of the place. He did tear it down years ago to build the god awful house many years ago. Growing up we spent every weekend there in the summer and it was a blast. By middle school it was take it or leave it because I had friends and activities I didn't want to miss out on. By high school I spent less and less time there unless we were having a party. My Dad has very strong ties to the place and it means the world to him. The problem is the suburbs have moved in hard and what was once an isolated place is now a zoo. I mean it is quiet and peaceful, but a five or ten minute drive away and you are in the middle of what I'd consider hell. My brother and I both would rather sell the place and buy something peaceful in the Adirondacks, for example. There is no charm to the place anymore. What my great grandfather once saw is long gone. The other house is sucky also in some ways, I'd dump it in a heartbeat too, if I was faced with the decision. Too bad they freaked and dumped the condo in the virgin islands after hugo, now that would have been a win.

^^^ This is kind of what I was referring to when I said you need to predict the future. Old-time [emoji638]nd home owners are always complaining about too many people. Surprise!! You didn’t plan far enough ahead or whatever.
The other part is Core Shot said it was a sad ending. Kinda.
Half a million $ buys a shit ton of hotel room nights in some pretty cool places where some carhartt wearing motherfucker fixes the water heater etc.

The kind of small, ramshackle, uninsulated, unheated cabins and cottages--like the cottages my grandparents, aunts and uncles (but alas not my folks) bought on a lake in SE MI or the now-winterized fishing cabins still hanging on at Donner Lake--in other words, affordable, don't seem to happen anymore, at least not in places I'm familiar with. There are many factors--especially more wealth at the top competing for the remaining unbuilt sites and tear downs--but one of them is tightened building codes including energy codes, which certainly have increased the costs of building. Our house was built in 1975. It is no shack but it would not come close to meeting CA's earthquake codes. (An architect friend's first words on entering--You have no sheer wall.) The southfacing wall is almost entirely single pane glass, as are about half of the other windows. We did drop the cathedral ceiling to add 6 more inches of insulation. We've added several small additions and the difference in construction is dramatic. (If we do get the big one I expect the additions to hold the original house up.)

The property I bought had one of those lake cabins you describe - built in the 1960s, A-frame, no insulation, painted plywood for a roof (with new layers added as is rotted out), sketchy wiring, and a collection of hoses that were strung to the lake that pumped in to a questionable 55 gallon drum for water. There’s no way you could build something like that here now, even in relatively permit free Idaho.

After romanticizing about remodeling it, I ended up putting it in a dumpster.

Our family lake cabin in Minnesota was built in 1916. My sister owns it now that my dad passed away. It is rustic for sure but has had a hodgepodge of remodeling done over the years. Those old cabins in MN lake country are slowly disappearing.

I was talking with a local town official in northern WI yesterday and he said there is a trend where those old run down lake cottages are getting torn down and large garages with electricity, bathrooms, and sometimes larger windows are being put in it's place. The garages hold nice campers or RV's. It's a good way to have a "cottage" and keep property taxes low since the building is just a garage.

Time to change how property taxes are assessed in this country.

Primary residence=reasonable taxes (Whatever that means)
2nd residence=less reasonable taxes
anything beyond that, soak em.

Many if not all homes at places like the YC are not owned by a person. They set up a LLC and it owns the home and writes down everything possible. And don't get me started on the fabulously wealthy buying up ranches, building a big compound and still not paying shit for taxes because of the Ag exemptions.

Lots of locales already have some type of homestead exemption. I've never seen one that was a meaningful deterrent.

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Originally Posted by Bunion 2020

Time to change how property taxes are assessed in this country.

Primary residence=reasonable taxes (Whatever that means)
2nd residence=less reasonable taxes
anything beyond that, soak em.

Many if not all homes at places like the YC are not owned by a person. They set up a LLC and it owns the home and writes down everything possible. And don't get me started on the fabulously wealthy buying up ranches, building a big compound and still not paying shit for taxes because of the Ag exemptions.

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There is a shitload of legal precedent limiting just how much you can soak a non-resident taxpayer. The State of Minnesota has a relative well written 2 pager about it:

https://www.house.mn.gov/hrd/pubs/ss/clssnonr.pdf

This is why you often see homestead exemptions (often with qualifiers based on age) or homestead vs. non-homestead tax rates for education taxes but not a straight up soaking of a non-resident property owner. There needs to be relative justification for the different rate.

Like Maz said, rarely does it make a huge difference. Non-resident tax payers are already a pretty sweet deal for most towns, where they pay in significantly more than they take.

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Originally Posted by Grange

I was talking with a local town official in northern WI yesterday and he said there is a trend where those old run down lake cottages are getting torn down and large garages with electricity, bathrooms, and sometimes larger windows are being put in it's place. The garages hold nice campers or RV's. It's a good way to have a "cottage" and keep property taxes low since the building is just a garage.

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I like this idea. Then figure out a way to work in some of those ag exemptions and lease an acre for a telecom tower that pays enough to cover the whole place.

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Originally Posted by Bunion 2020

Time to change how property taxes are assessed in this country.

Primary residence=reasonable taxes (Whatever that means)
2nd residence=less reasonable taxes
anything beyond that, soak em.

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Too easy to game. There are better ways--more progressive income tax, like we had in the 50s, tax capital gains as ordinary income, eliminate the carried interest rate, a wealth tax, I could go on and on. When the wealthy have less to spend on their houses the cost of housing will go down for everyone.

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Originally Posted by Grange

I was talking with a local town official in northern WI yesterday and he said there is a trend where those old run down lake cottages are getting torn down and large garages with electricity, bathrooms, and sometimes larger windows are being put in it's place. The garages hold nice campers or RV's. It's a good way to have a "cottage" and keep property taxes low since the building is just a garage.

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Interesting idea but I'd bet the resale value of the "garage" would be less than for the old rustic cabin.

Pain in the ass.

5.5 hour drive to our condo.
Just under 10k a year operating expenses.
Probably use it 25 days a year.
Cheaper to rent.

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Originally Posted by dan_pdx

I've been fantasizing about the white salmon area in the Columbia River gorge. There are lots from under an acre in/near town up to dozens of acres with no utilities as you get further afield. Maybe around $10k per acre at the cheapest, but there are no $10k 1 acre lots, you're looking at 5+ acres. Not many listings under $100k. The 1 acre+/- lots close to town, maybe with views, are $400k or so

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That seems like a good spot to have camping land with a shipping container, because it could all go up in a brush fire in a hot second. I once stayed a night at someone’s hipcamp east of White Salmon on some pretty, rural acreage. They said they had evacuated many times over the years, often on short notice.

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Originally Posted by AdironRider

There is a shitload of legal precedent limiting just how much you can soak a non-resident taxpayer. The State of Minnesota has a relative well written 2 pager about it:

https://www.house.mn.gov/hrd/pubs/ss/clssnonr.pdf

This is why you often see homestead exemptions (often with qualifiers based on age) or homestead vs. non-homestead tax rates for education taxes but not a straight up soaking of a non-resident property owner. There needs to be relative justification for the different rate.

Like Maz said, rarely does it make a huge difference. Non-resident tax payers are already a pretty sweet deal for most towns, where they pay in significantly more than they take.

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Our town in Vermont just changed the tax rules based on homestead status. Previously, non-homesteaders paid less in school taxes because they didn't use the schools. Now, we pay 25% more than homesteaders. Don't think it will change any dynamics but this is how towns like Stowe were so tax-rich for so long. Also, the state pays part of homesteaders' property taxes. It's around 10% if IIRC.

Homestead rates in VT only affect school taxes I believe, and those are set by the State. There was a massive overhaul of that program (which has its own issues separate from the second home question), but it did have very large effects on certain towns. The State also has income requirements in terms of paying homestead tax rates, last I knew it was a sliding scale for households that make under about 140-150k.