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The Middle Class Argument for Buying a Second Home

Sometimes I get a bit embarrassed when my Upstate house comes up. I’m not rich, and I know rich people love to say that, but I swear on my publishing job income that it’s true. I don’t come from family money (my dad was a bartender, my mom an office assistant), although I did, admittedly, pay for the down payment on my Upstate house after I came into a very modest sum after my father’s death, added to a couple years’ worth of savings.

Perhaps because of all this, I’m really sensitive about appearing ostentatious, but at the same time, I’ve found being able to have this second home so rewarding emotionally and so empowering from a personal finance point of view that I tend to get a little evangelical about it all.  Lisa wrote a few days back about the economics of buying a second home, and Brownstoner responded with a thoughtful rebuttal, basically deciding that in terms of the bottom line, second home ownership just doesn’t make sense. Perhaps, but neither of these arguments take into account that a second home is an investment—one that will hopefully appreciate in value—just as your primary residence ideally would. Of course, much has been written about whether to rent or buy, and my decision to buy was based in a basic faith in the latter, which is about as middle class as you can get. Read the rest of this entry

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Can You Afford a Country House?

Flickr/Images of Money

It’s a question I’ve been asking myself, and here’s something that helps me answer it: a Vacation Rental Analysis Sheet (sexy, right?). It’s a downloadable Excel spreadsheet that allows you to plug in all the relevant numbers, from sale amount to estimated rental income, so that you can figure out how much income you might gain, if any, by renting out your vacation home. It has lines for property caretakers, advertising, house cleaners and other regular expenses, but I would add a few lines if I were you:

  • Cost of furnishing a new home (beds, couch, second set of cookware and such)
  • Renovations (even if you’re lucky enough to need little more than a new coat of paint)
  • Monthly fund of moneys put aside in case of major structural breakdowns, like broken boiler or leaky roof
  • Car expenses, for those city dwellers who have not yet invested

Can you guys think of anything else you should add to your monthly expenses to figure out if it makes sense for your wallet? According to my analysis, for a $250,000 house with $50,000 down and renting it out for half the year, my expenses are about 20 percent higher than my income, and comes to about $4,000 a year. That’s pretty good for 36 weeks in the country.

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