The Million Dollar Dream

After some very long weeks and months this past Fall, Mr. PiN and I were able to get away to my parents’ place on the coast.

As often happens, on my first day here, I started fantasizing about being able to spend weeks (months!) in this great location. It doesn’t seem like a totally crazy idea—after all, my grandparents spent their winters here in their retirement years, and now my parents do as well (health crises and COVID being the exception).

Entrance to a beach, framed by palm trees.
I would definitely walk daily if this were my destination

My “assignment” while here has been rest and recuperation, but my brain kept turning over thoughts of what it might be like to actually live here for months at a time.

While the privilege here is obvious, some of my thoughts may have relevance to other professionals thinking about a vacation home. Especially as regards making memories with the family, and the fallout from that.

Is this really a $1 million affair?

Let me start out by saying: the family place is definitely not salable for $1 million.

It’s a nice 2 bedroom condo on the coast, with a water view, in a great area. Everything is walkable: a supermarket, great restaurants, a post office, several banks, a branch of the local library. Not to mention 2 pharmacies and a real medical clinic. It is on a bus route, and taxis congregate in a nearby parking lot off-hours.

The building has a parking garage, a gym, a swimming pool, full time maintenance staff. It’s on the ocean, so you know that storm damage is always an issue.

Over the years, the yearly costs of maintaining the apartment have gone up from $12,000 to $18,000. I think that includes property tax, insurance and building fees. Some utilities are included, but not all.

Using the 4% rule, that means that owning this place in retirement would require an additional savings of $450,000 just to pay ongoing costs.

Depending on the market, I am pretty sure my parents could sell it for over $550,000. I am the oldest, but not only, child so I can’t expect to be given this place for free. Assuming that I would purchase the place from them at a fair market price—actually, this is probably more than a $1 million dream.

Do I really need to buy a place?

As we all know, to get the best prices for great locations, you probably need to book ahead. Checking on prices just as high season is starting is not going to uncover too many bargains. Especially with COVID going strong.

But, looking at January, I could have booked a hotel room at a nearby building for about $2000 per week. Or, I could rent a 1 bedroom/1 bathroom apartment for a bit more, call it $2300 a week.

For about the same cost as the apartment’s yearly fees , I could spend 8 to 9 weeks in the area, without the need to tie up a lot of money in a down payment and mortgage. And I wouldn’t be on the hook for repairs and updates, unless I do something totally outrageous.

Apples and Oranges

However, am I getting the same experience with a hotel room or apartment rental? I would say: definitely not.

A hotel room (at least, the one I am thinking about) means I am not cooking. That’s fine for a few days, but 8 weeks is way too long for me to eat out every meal. That’s a ton of money and, frankly, I don’t feel so great eating restaurant food for days on end anymore.

An apartment rental should provide a kitchen, it’s true. But as someone with a ton of allergies, I am not sure I would book a place (hotel or rental) for 2 months without being sure I can live there that long. Smokers, pet-smuggling tenants, mildew—those are all deal breakers for me if I am going to spend a season there.

Endowment effect or happy memories?

One of the big issues around taking over (buying) the family apartment is the fact that it is the family apartment.

I have been coming to stay here for over 40 years, and have tons of memories that go with that: arts and crafts with my grandma and the shells she collected from the beach; multiple visits with my next oldest cousin; escaping the cold during residency for a cheap vacation; escaping the cold as a single attending, for a cheap vacation; visiting my parents here nearly every winter in the past decade.

The place has been slowly renovated since my mom took ownership, so it doesn’t look exactly as it did when I was a child, but it is comforting to see familiar artwork and decor in an updated setting.

Most importantly for my health, I know that no pets have ever lived here. Knowing my mom, mold and mildew are not an issue. Also, the kitchen is fully equipped (more fully than my own); all we need to do is add groceries.

Family: the F word.

While it is true that I am the smartest, best looking, most amiable, and most deserving of my parents’ children (that’s sarcasm, by the way), that doesn’t mean that it is a slam dunk that I can get my hands on the apartment when my parents are ready to give it up.

Even if I should get the apartment, I have some anxiety about taking ownership instead of my siblings. I do not want to endanger our relationship over material things. If they get jealous over the apartment coming to me (even if I buy it), it just isn’t worth a rift in the family.

The prior generation of the family has seen squabbles over parental gifts, so my parents are pretty sensitive to this. They worked hard to train us (3 stubborn and strong-minded children) to play nicely together.

I think there is a good chance my parents my prefer to see the place pass out of the family rather than to have it seed an argument between their children.

Is it a good dream, or a bad dream?

After going through all this, I have mixed thoughts about taking over the family vacation home, even if I can.

It will be expensive, requiring at least $450,000, and probably more than $1 million.

It will tie me down to one winter destination (probably) for many years.

It could be the cause of hard feelings between me and my siblings.

On the other hand, it’s a beautiful place, very comfortable, in a location I really wouldn’t mind coming back to for years to come.

Tough questions to consider, both for me, and for the parents in whose hands the disposal rests.

What would you do in my place? What would you do if you owned a vacation place and had multiple children?

7 thoughts on “The Million Dollar Dream”

  1. I enjoyed your post!

    We considered a vacation home for many years. We have 5 children so one of the issues would be what to do with it amongst them all when we could no longer use it. Not the main reason we did not do it but one of them. The main reason was that we just didn’t want to be tied down to caring for a place year round that we would only use some of the time. Our primary home seems to provide plenty of maintenance needs without adding another residence to care for!

    We ended up buying back to back timeshare weeks in Myrtle Beach during the prime of summer. We all enjoyed(and still do) making memories there every summer. This has worked well for us and the funds we likely ended up saving I am sure allowed us to FIRE earlier than we otherwise would have been able to do so.

    Thanks again for sharing and wish you the best in your decision!

    1. Thank you for your lovely comment. I am glad to hear you found a good solution to the family vacation problem: going back to the same place to make memories, but not leaving behind a place for siblings to argue over. I agree this probably was a great financial choice too. IF my parents offer me the opportunity to acquire their place, and I take them up on it, I am sure it will delay my time to retirement by a number of years.

  2. Obviously there is a lot of sentimental attachment to this particular home, for you and likely for your siblings as well. What is your parents’ plan when they pass? I have witnessed my own mother owning an inherited family vacation home with her sibling and cousins, and it was not good! If you decide to buy something, I would definitely do it on your own. We bought a vacation home on the Oregon coast which is a 100 minute drive from our primary home. Being able to just get in the car and drive there is huge. We could easily rent it out (short term or long term) but choose not to rent. Recently we have been using it to exchange homes with others, which affords us lodging in other destinations (San Francisco, Puerto Vallarta, Amsterdam, Berlin, Vienna—to name a few). We are not tied to one vacation destination. We are creating our own memories for our children and grandchildren. It has been worth every penny, in my opinion, and now that we are finally retired, we can spend weeks or months there if we want. Who knows? It might even become our primary residence!

    1. You are right–there is a huge amount of sentiment attached to the apartment. There is an excellent chance that my parents will decide to sell the place once they can no longer use it–partly for the money, and partly to avoid the possibility of causing friction between the siblings. Now that I am back in my own home, I realize this is probably the better decision; but every time I go back, I do a little day-dreaming.

      I am not sure–especially after going through the numbers a little more carefully–that I would bother with a different vacation home of my own. Though that could change as I get closer to the possibility of leaving winter behind in retirement.

      Thank you for coming by and commenting!

  3. If you like that environment so much, have you considered shifting your primary residence and buying a place close to your parents?

    1. Thank you for coming by and commenting.

      To clarify–this is not a vacation home near my home town; it was the winter home for family members who were escaping snow and cold. I love the area in winter, but it is too warm for me, even in October. I don’t think I could handle living there year-round, and I strongly suspect my parents will choose to stay up North once they cannot travel well anymore.

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