Buying a vacation property

[wallyuwl]

Anyone bought one?

My parents have one about 70 miles NW of Green Bay.

The other day my wife said, being serious, she would like to have one.

A lot of options. Could buy just land and put a double wide or modular home on it. Or buy a conventional property. I just can't believe the prices, even in Northern WI. Land isn't too crazy expensive. The issue with the buying land route is you can't get a mortgage for a mobile home, we would need to get a home equity loan on our current house (based on the Zillow estimate which is probably about right, it has increased 55% in 5 years so we have almost $200k equity).

I am kind of waiting for everything to crash. And it will. Then look in winter (2022 or even 2023) when prices are lower anyway. I am not even 100% sure we could afford it, would depend on price and interest rates at the time. We have bought a lot of things in the past year (anticipating inflation) we are paying on that will be paid off in a year.

[RingoCStarrQB]

I would stay away from real estate until interest rates get back to 4% or lower. Just my conservative side talking.

[Pckfn23]

Might be staying away for a long time then. Historically, 30 year fixed rates under 4 aren't normal. I'd wait for real estate prices to come down, but that's going to take a recession for that.

[wallyuwl]

Might be staying away for a long time then. Historically, 30 year fixed rates under 4 aren't normal. I'd wait for real estate prices to come down, but that's going to take a recession for that.

So July 25 when the recession becomes official when Q2 GDP is released?

But yeah, rates under 4% for 13ish years is not going to happen again.

[Pckfn23]

Might be staying away for a long time then. Historically, 30 year fixed rates under 4 aren't normal. I'd wait for real estate prices to come down, but that's going to take a recession for that.

So July 25 when the recession becomes official when Q2 GDP is released?

But yeah, rates under 4% for 13ish years is not going to happen again.

Obviously the start of the recession is not going to immediately affect real estate. There needs to be more of a supply in the market.

[Captain_Ben]

Anyone bought one?

My parents have one about 70 miles NW of Green Bay.

The other day my wife said, being serious, she would like to have one.

A lot of options. Could buy just land and put a double wide or modular home on it. Or buy a conventional property. I just can't believe the prices, even in Northern WI. Land isn't too crazy expensive. The issue with the buying land route is you can't get a mortgage for a mobile home, we would need to get a home equity loan on our current house (based on the Zillow estimate which is probably about right, it has increased 55% in 5 years so we have almost $200k equity).

I am kind of waiting for everything to crash. And it will. Then look in winter (2022 or even 2023) when prices are lower anyway. I am not even 100% sure we could afford it, would depend on price and interest rates at the time. We have bought a lot of things in the past year (anticipating inflation) we are paying on that will be paid off in a year.

It's tough when the Average Joe now has to compete with Blackrock and Vanguard when bidding for real estate. A brand new housing track will get built and some investing house will buy up every single unit before they're even finished. Nuts. I'm still relatively young and have never owned real estate. Hope I can one day.

[BF004]

Might be staying away for a long time then. Historically, 30 year fixed rates under 4 aren't normal. I'd wait for real estate prices to come down, but that's going to take a recession for that.

So July 25 when the recession becomes official when Q2 GDP is released?

But yeah, rates under 4% for 13ish years is not going to happen again.

Obviously the start of the recession is not going to immediately affect real estate. There needs to be more of a supply in the market.

I mean, Econ 101. That is only, give or take, 50% of the equation.

The Fed (finally) combatting inflation, going to increase interest rates, which will definitely lower that other part of the equation from above.

[Pckfn23]

So July 25 when the recession becomes official when Q2 GDP is released?

But yeah, rates under 4% for 13ish years is not going to happen again.

Obviously the start of the recession is not going to immediately affect real estate. There needs to be more of a supply in the market.

I mean, Econ 101. That is only, give or take, 50% of the equation.

The Fed (finally) combatting inflation, going to increase interest rates, which will definitely lower that other part of the equation from above.

100% only part of the story, it's the ridiculousness of properties selling in hours. Of course that also means demand is high. As demand falls, that supply should increase. It's a crazy market right now, still. Rent being as high as it is doesn't help either

[BF004]

Obviously the start of the recession is not going to immediately affect real estate. There needs to be more of a supply in the market.

I mean, Econ 101. That is only, give or take, 50% of the equation.

The Fed (finally) combatting inflation, going to increase interest rates, which will definitely lower that other part of the equation from above.

100% only part of the story, it's the ridiculousness of properties selling in hours. Of course that also means demand is high. As demand falls, that supply should increase. It's a crazy market right now, still. Rent being as high as it is doesn't help either

This is also part of the same issue. Rent is high because people are struggling to buy.

How much one is driving the other is a separate question, but these are typically very correlated.

Many who can justify $1500 a month would rather buy a house if they could, or visa versa, would prefer to rent, but they just do the best option for themselves.


But still a crazy market and not a ton of indications it’s slowing yet. I think many are anticipating it, but even just looking at Zillow trends, 2022 is still outpacing last year.

[Madcity_matt]

I bought a lake house a couple of years ago for what felt like way too much at the time, and now it's worth twice what I paid for it. Decent property, especially on the water is likely not going to do down as there is more and more money pouring in from Illinois. I'm looking at a second place further up north, but I would likely structure that one as a vacation rental and just try to make enough on rentals to cover the nut and let land go up from there. That might be your best way to get your foot in the door.