Ski Condo: Buying for Personal Use and Income

[GrilledSteezeSandwich]

I think banks now are looking for 20% down pretty much on any home loan, primary or vacation.

crazy...I always assumed a 5% down payment was typical..but it turns out that is more of a modern number..with the average home around 200k, not many people have $40,000 extra knocking around plus closing costs..it looks like the housing market will continue to slide as it's tougher on new buyers..

 

[drjeff]

crazy...I always assumed a 5% down payment was typical..but it turns out that is more of a modern number..with the average home around 200k, not many people have $40,000 extra knocking around plus closing costs..it looks like the housing market will continue to slide as it's tougher on new buyers..

Depends on what type of lender/loan that's being pitched. When I bought my current house in CT almost 8 years ago, the lender my wife and I used required 10% down, then we did the primary mortgage for 80% and a second mortgage for 10% so that we'd avoid having to get PMI on the loan. Like I said already with my VT place, which had the mortgage written just about 2 years ago now, it was 20% down. You know, "old school" mortgages, the kind that this country thrived on for decades

In BOTH cases, what I feel was really the important thing is that the properties my wife and I chose to buy didn't cost anywhere near what we were approved for. We basically looked at our cashflow and figured out what we could afford each month and be able to maintain a lifestyle that we were comfortable with and then bought property that fit our budget, NOT what the mortgage lenders thought we could afford.

What really got me about the mortgage crisis/issue, is my sister in-laws brother (I'm good friends with him BTW)works for a mortgage company, and he basically told me a few years ago that as long as a person had a job(didn't matter what their pay was) with a 6 month employment history that they were pretty much guarenteed approval for a no money down $250,000 mortgage, and that generally speaking they'd approve people for a no money down mortgage for between 15 to 20 times their annual income no questions asked. They'd approve them, write the mortgage, and then basically by the time their 1st monthly payment was due, sell off that mortgage to some other investors/loan servicing company. No wonder why we're in this crisis

 

[BeanoNYC]

with the average home around 200k...

I don't know whether or not to laugh or cry at that.

 

[drjeff]

I don't know whether or not to laugh or cry at that.

True, so true

 

[GrilledSteezeSandwich]

I don't know whether or not to laugh or cry at that.

What can you buy on Strong Island for 200k??? All the fixer uppers near me are 150-180K..new construction 250k or so for a 4 bedroom 2.5 bath..maybe cheaper..but it's in PA..I think nationwide the average home is about 180k..down from about 210k 2 years ago..

 

[BeanoNYC]

What can you buy on Strong Island for 200k???

A studio apartment. This is no joke. The housing market here is insane.

 

[GrilledSteezeSandwich]

A studio apartment. This is no joke. The housing market here is insane.

My sister and brother in law bought a studio in DC for almost half a million..

 

[BeanoNYC]

My sister and brother in law bought a studio in DC for almost half a million..

Depends on the neighborhood. That $200 quote is probably for either a not-so-good neighborhood or a building with a high maintenance fee. The maintenance on a one bedroom in my old building was $1600 a month when I left!

 

[GrilledSteezeSandwich]

Depends on the neighborhood. That $200 quote is probably for either a not-so-good neighborhood or a building with a high maintenance fee. The maintenance on a one bedroom in my old building was $1600 a month when I left!

How the hell could you afford that? All my monthly expenses combined don't even equal that...wow as much as it stinks living 17 miles from Blue mountain..I'm glad I'm not in a more expensive locale..

 

[BeanoNYC]

How the hell could you afford that? All my monthly expenses combined don't even equal that...wow as much as it stinks living 17 miles from Blue mountain..I'm glad I'm not in a more expensive locale..

Well in all fairness, the building had had a poor coop board in the past that put them in dire financial straights. The new board is trying to payoff the debt. I was in renting a studio at the time, but my neighbor owned and was trying to sell. He was practically giving the place away with that maintainence. ...and we're talking about a coop in a building on the boardwalk with an oceanview terrace.

 

[jaywbigred]

This is an interesting thread for me. I have been on the market for a condo/co-op/townhome/home in NJ for almost 2 years now.

Simultaneously, my gf has been looking for a ski/VT property.

Our plan is to purchase separately. We'd rather have 2 smaller places than 1 large place in NJ and have to keep renting when we go skiing. So we are looking at the ski condo as lifestyle purchase, and will rent it (probably during holiday periods) just to help offset maintenance costs.

 

[SKIQUATTRO]

put the money into your primary home, 2nd homes by and large are holes where you throw money (esp up in ski country) dump the cash you would have spent on the ski condo and improve/upgrade your primary residence (which will yeild greater return) and just rent a seasonal condo or get hotel rooms every weekend...in the end you'll be in the green!!!!

 

[SKIQUATTRO]

I have a property now out in Riverhead, LI (basically in the projects) thats zone commercial and residential....i have architectual plans for the space to be used as office space..its right across from the Courthouse and large bank hq...it'd be perfect for a team of lawyers etc....we have it listing at $299K, needs at least $100k of renovations or tear down and rebuild...and i have several very interested people...its seller financing which helps, but there are people out there buying who have cash....traditional loans are still being made, just the standards are tighter

 

[Glenn]

put the money into your primary home, 2nd homes by and large are holes where you throw money (esp up in ski country) dump the cash you would have spent on the ski condo and improve/upgrade your primary residence (which will yeild greater return) and just rent a seasonal condo or get hotel rooms every weekend...in the end you'll be in the green!!!!

I guess it all depends. If you buy now, you have a good chance of values going up. Well, they will go up eventually, I just wouldn't bank on it by the next year or two. ;-)

Seasonal rentals are nice, but you're left with nothing at the end of the deal. At least with a house/condo, you can get a good rate of return if you hold on to it and are smart with your expenses.

IMHO....YMMV

 

[Geoff]

I guess it all depends. If you buy now, you have a good chance of values going up. Well, they will go up eventually, I just wouldn't bank on it by the next year or two. ;-)

Seasonal rentals are nice, but you're left with nothing at the end of the deal. At least with a house/condo, you can get a good rate of return if you hold on to it and are smart with your expenses.

IMHO....YMMV

The economics of buying a vacation condo as an investment just don't work. Over the long term, the value tracks the inflation rate. If you consider the cost of capital and all your ownership expenses, you can rent for the same yearly costs as owning.

You buy your own place so you can furnish and equip it as you want. You're not going to do that with a seasonal rental.

 

[mlctvt]

The economics of buying a vacation condo as an investment just don't work. Over the long term, the value tracks the inflation rate. If you consider the cost of capital and all your ownership expenses, you can rent for the same yearly costs as owning.

You buy your own place so you can furnish and equip it as you want. You're not going to do that with a seasonal rental.

+1
This is what we found. It would be cheaper to rent seasonally. We wanted to use the place year round and decorate it to our liking with our stuff. My wife and I bought a 2 bedroom plus loft condo at Mount Snow in 2005. We rented it 1/2 share for the first 2 years. The rental money you'll collect will just about cover the condo fees and possibly the taxes but no way the mortgage and other expenses. We're ok with this. When we figured what we could afford we basically figured we'd collect no money from renting. We always have the option to rent and renting just for the holiday weeks and weekends can yield almost the same total $ as a 1/2 share. If you purchase a blackout pass and rent out your place for just the holidays this can help the affordability but you can't guarantee this income.