Any thoughts on purchasing a Tahoe vacation home? Still on the fence!

[Drake Roberts]

I know no one can answer this but I guess I'm looking for advice or prior experience with this. I recently retired at the age of 55 and live in the San Francisco Bay Area. Financially, I'm secure with a guaranteed retirement income for the rest of my life, I also have my last child almost out of college without any loans and our current home ($600,000 value) is almost paid off. 

Since retiring I've found that I'm easily able to save $2,000. a month for no real reason. I already have around $750,000 in cash and stock investments which I don't for see needing since I already have a comfortable retirement package. Once our house is paid off I'll have another $1,100. a month that's available.

My wife and I have always vacationed in the Lake Tahoe area and always thought about buying a second home there. The only problem is I hate the idea of starting a mortgage again but at the same time I could certainly use the mortgage deduction. I'd love to be able buy a place (single family cabin or condo) and keep my housing costs (mortgage, taxes, HOA) under $2,000 a month. This put's me in the $350,000 price range.

Having been a saver all my life I'm now in a position to spend it but I'm a little hesitant of jumping into a second home that comes with all the pro's and con's of home ownership of a vacation home. Has anyone else out there been in this same dilemma? The more I look into this the more I hear stories from people that have had bad experiences. Thanks for any thoughts.

[Jared Adamson]

Drake,

My wife and I purchased a condo about a year ago up by Heavenly and it has been a great investment so far.  The condo is very similar to the one you might look for.  It cost us about $300,000.  We were expecting it to average $2,500 a month in profits but that has not panned out.  During the summer and winter we have averaged $2,000 to $3,000 (after all expenses) but during the spring and fall we have been breaking even at best and losing $1,100 at worst.  I haven't done all the math yet but I bet we are averaging about $1,000 a month in profit.  We were planning for more but there have been more costs than anticipated.  We have been averaging about $3,000 a month in expenses.

My wife manages the property and spends about an hour a day replying to e-mails, organizing cleanings, answering phone calls...  It is easy work but constant so sometimes my wife gets sick of it.  We looked into property management but they charge so much all the profits are taken.

Overall it has been a great learning opportunity and it has been a blast having the the property to visit ourselves.  I anticipate our profits to improve next year because of what we learned this year.