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Buying a place - but where (on a tight budget) ?

post #1 of 9
Thread Starter 

I'm in Australia and looking to buy a place and it needs to part pay for itself for the next 8 - 10 years before I start living there in winter (when I retire).


Basically I fly into LA, and I then need to fly onto where ever. I don't really want to do a heap of driving.


I thought about buying a place - maybe in Sandy in Salt Lake City and renting it out. Later, on retirement, I could move there and either use the bus or get a car for the winter do the run up the mountain.


Is this a bad idea - is there a better plan. Does it stack up better somewhere else. My budget is not big and I don't want to borrow too much - but I can afford to do it.


Thanks for the clever ideas. This is my first post, so thanks to all for any help.

post #2 of 9

You will never find a better time to buy real estate here in the states in our lifetime than right now IMO. If you can do it now is the time! 


It may or may not fully pay for itself though as vacation rentals are way down as well. 


Personally I would be looking in the Reno/Tahoe area. Fly to LA and then Reno. 


Welcome to the forum!

post #3 of 9

Prices and (full time) rents have come down here in Summit county.  Unemployment is higher with construction jobs down.


Not sure how much you have visited the States, but if you are planning on spending a good amount of time at your new place once you retire, I would certainly pick a place that is convenient and you are going to like.  Prices have come down, but one danger is that you pick a place now and then decide you would rather be someplace else in 5 years. 


Tahoe has a lot of good skiing, but you will probably want to have a car there as bus service is not as readily available based on my past experiences (all 4+ year ago).  Summit county & Vail have good, free bus service as does Park City (and maybe some others that I am not familiar with), but you will likely find these places higher priced than Sandy.


Good luck & welcome to Epic

post #4 of 9

I've fantasized quite a bit about this sort of purchase. But will probably wait until I actually retire, then I might just do long term rentals at a variety of ski places.

Here's a thread that might interest you. Lots of random real estate around US ski areas, many of the listings could be closed by now.



Looking at your requirements I'd agree that SLC area is good for easy flight access. However, since you want a moneymaker and plan to rent the place to others you might do better to check out a resort area like Park City rather than Sandy. Wonder if Solitude ski area in Utah might be a good candidate? Other suggestions would be Whistler-Blackcomb, Vail, Lake Tahoe area. Think about places that draw as many visitors in summer as in winter. Your timing for the market is pretty good. There has been a considerable drop in prices for housing in much of US, including ski country over the last 3-4 years. Not sure how you'd finance your buy, but home mortgage interest rates are at an unprecedented low level at this time in the US.


Maybe there is a real estate person here at epic that can provide general advice on which type of properties and ski area locations are likely to generate the best rental occupancy rates. Getting a property close to the ski lifts at a popular resort is always desirable for rental potential.

post #5 of 9
Thread Starter 

Thanks for information to date, really appreciate it. With SLC - I was more thinking of a full time rental (in the near future) rather than chasing the ski rental / management fees / side of thing. Again thanks for the thoughts.


I lived in Charlottsville VA for a while - I was with the JAG School, but did not ski at that time, so I have very little knowledge - anything you can tell me is appreciated.

post #6 of 9

2nd home real estate made sense in this country because of mortgage interest tax deductions and cheap interest rates.  Now that real estate has collapsed and mortgage rates are the lowest in half a century, the game has changed.  For one, I would expect the tax deduction to eventually go away (why should the US be different than any other country) once things improve.  It could take a long time for things to improve.  Therefore, do the prudent thing and go for a 10% cash-on-cash return on your investment (Buy for $300,000 with 20% down.  After upkeep, you need to clear at least $6,000 per year after all costs, more if you are making capital improvements).  If you can get that kind of return, you will at least break even in the long run after the upkeep/replacement of carpet, furniture, HVAC, etc. necessary to keep your property going until you are ready to use it.  It you can't get that kind of return, wait for a foreclosure or for prices to drop further. 

Edited by quant2325 - 9/22/10 at 8:08am
post #7 of 9

Why do you need to buy a place now?  There is an enormous difference between going on vacation and enjoying yourself or being a real estate owner of a second home, many times zones from your home.  Have you been around Western US to know the differences in the resort areas?   Why not take 10 trips in the next 8 years to the various areas, and which might be the best fit for you?  Owning real estate is nothing but a headache, considering property TAXES, maintenance, renting, rental commissions, furnishing etc etc etc.  Your dream of retiring in 8 yrs to ski country and owning an investment property where you will likely only spend a couple dozen nights in the next few years are two different subjects.  Personally, I don't think owning any second house which takes an airplane flight makes any sense at all, unless you have MANY millions and have no care in the world about wasting or loosing tens of thousands of dollars.  Because likely your property will be a loss for you, except for the immediate "juice" of the purchase.  (bragging rights etc etc).  So for the loss you are likely to take, instead you can take one or two nice ski trips per year, to different places, and in a few years when you are actually ready to retire and spend quite a bit of time there, it will be the right thing to do.


>My budget is not big and I don't want to borrow too much - but I can afford to do it.

When I read that, I think you have a moderate amt of money that is just burning a hole in your pocket.


Saying that, it is possible, maybe likely, that real estate prices have bottomed, so at least you are not buying during a boom.  But seems to me we have an enormous oversupply of housing, esp second houses, and this oversupply is likely to last for many, many years, so there is no rush to get in at the bottom.  We may not even be at the bottom.


I just believe all the otherwise smart people I know who have timeshares and get themselves locked into various real estate deals.  I love to travel and completely enjoy the freedom of going when and where I want, and usually at a bargain.


Another thing about skiing.  One injury or other health problem and it could be over in an instant.  Within a few weeks or months you would come to terms that you are not a skier anymore and would have to move on to other things.  Ski town would no longer have any allure or meaning for you.

post #8 of 9
Thread Starter 

Hi SnowbirdDevotee - you are right - a moderate amount of spare cash that needs to go somewhere, possibly into shares or possibly real estate.


You are right that the US market is as at or is near bottom and may be for some time, however the other bit of the equation is that the exchange rate is at a peak - my way, so that makes a difference too. Also our share market seems to be trading sideways and our real estate bubble has not popped (if it is a bubble).


You do make a valid point re the costs / management fees etc - can anyone tell me a little more about what those would be. Perhaps someone who owns something could give me a broad outline of what I could expect with a private message so you are not sharing the information broadly. Many Thanks.

post #9 of 9
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