Holiday home or extra money for vacations?

[DelightfulDilemma]

I know this is a travel forum but looking for opinions!

I have some cash to invest arising from a small inheritance. We truly don’t need this cash for anything else. We have a teen and a 7 year old. DH and I have busy careers but we usually manage a two-week holiday in Europe each year and a smaller UK holiday or visiting relatives in Europe once or twice a year of year. I do definitely want to do some big trips before my teen departs for uni so I have only a handful of years to take her to Japan and Costa Rica and New York etc.

However; dh really wants to buy a property on the south coast and has found the perfect property in our budget. It’s also accessible so my dpil could stay there whenever they like (he loves that idea). It’s within a few hours drive and he has memories of whole glorious summers with his family and cousins at the beach (who lived there). Both my dc LOVE the beach and love the idea of spending time there and dd has visions of living there in the summers during uni with friends whilst working and sunbathing and generally “living the life”. Dh and I can both wfh and so until DD steals our holiday home it is no problem to be on the south coast for four or five weeks in summer holidays, or take long weekends.

But I would still want my big holidays - I don’t want to miss out on travel and dh says that’s fine too.

However I worked out the cost of running the property would be £6k pa. And it will be £12k stamp duty and cost of furniture and unlikely to see much capital growth. So we are looking at “losing” £20k in year 1 and £6k each year subsequently.

Would you rather spend that cash on fabulous trips, or sink it into a property that gives you a relaxed beach lifestyle and an opportunity to let friends and family have lovely long weekends at the beach when we are not there?

I cannot decide!

What’s your pension situation?

If you invest the money well it will work for you and you will earn interest whilst it's not being used. How much are you talking here 200k? That could earn you £500 a month gross. The net will depend on your tax rate.

Yes @Nannydoodles i can exactly see why you’d feel you have to forego other trips to get value from the HH. Good to hear this is actually what happens.

So far very few positive voices for buying the HH!

We've thought many times about buying a holiday home, but just can't see us constantly going to the same place as we'd find it incredibly boring. We don't even go to the same town or even the same country more than a couple of times as we enjoy the excitement of somewhere new.

I know the idea is that investing in a holiday home means you save money on hotels/rentals etc and hope the value increases in the long term, but we'd just rather have exciting different holidays.

If there was money available to buy a property, we'd probably just buy some kind of niche holiday let and rent it out to bring in an investment return, i.e. a barn conversion on a farm, a railway carriage converted to a holiday let, shepherds' huts or a canal boat, not for us to use at all, but just for an investment.

Here is the next curveball /drip feed which is unintentional as it has just struck me.

Perhaps dh wants to distract me from my Five Year Plan of big holidays because he doesn’t want to go to Scandinavia orJapan or Costa Rica or anywhere mildly exciting.

We have tended to holiday on South Coast or obvious tourist spots in Europe, a few times the USA (but I’m not going back til the Trump era is well and truly over) but he has never suggested anywhere exciting. Most of his holiday suggestions are “let’s go to Tenerife with PIL” or “let’s go to Portugal and see Uncle Paddy” or “Disney Paris could be fun for a week.”

We have done four big road trips to unexpected parts of Europe…All Planned and executed by me, with dh agreeing to the plan.

Hmmm. I need to have a chat with him. New thread may be looming: what do you do when DH doesn’t want to travel, and you do???

Go on a group holiday for solo travellers.

@taxguru I’d have been 100% in agreement 20 years ago. My parents room is somewhere new every year. But dh has sold me on familiar and easy - there is something gorgeous about going to your favourite family beach or restaurant , you’re instantly in holiday mode and relaxed

Back soon ladies - Christmas party beckons!

Oh yes they are.

we rented it at mates rates when our kids were not yet in school so we could use it during term time.

our friend who was one of the three owners told us we absolutely had to stick to the letter of his closing up and cleaning checklist otherwise they’d get so much hassle from other siblings.

personally I am very much a neat and tidy person and so it wasn’t any trouble but the checklist contained stuff like coiling the kettle lead up (apparently one of the sibs really felt this was very important).

honestly, this sort of thing is great for kids. Less great for adults who need to negotiate all the arguments between families (who gets it in peak summer holiday season? What if a niece basically moves in and stays there for a month plus?) and even less great for the owners for whom it costs a lot of money.

I would use part of the money to hire a really fab large house on the south coast for shared family holiday with PILs for a few summers in a row to give the feeling of the second home with none of the hassle and then book your more exciting holidays too. If you go back to the same house each year the familiarity and local area knowledge will accrue like a holiday home but no sheets to clean, gutters to fix or taxes to pay. Sounds like this could tick both of your boxes.

I would second this. Unless you want to spend ALL your holidays in the same place, it's surely not cost effective.

The idea of letting people use it for free is all very lovely but you will end up with all the cost and admin only to provide cheap holidays for everyone else. The more they like it, the more they’ll want to come and you’ll never get to use it yourself. Bizarrely, regular visitors start to get territorial and before you know it you won’t be able to use it during “their” times.

When you do you’ll be catching up on all the maintenance jobs arising from other people’s use of it.

Hang on, this is YOUR inheritance from YOUR parents, right? Your DH sounds quite controlling trying to exert his wishes onto how it will be spent, especially talking about all the advantages for his parents.

I was in the same position as you and dithered about buying a holiday home. DH just said he'd go along with whatever I wanted to do with it, it was my decision.

I decided against a holiday home because:

It's extremely tying in so many ways. You're stuck feeling you have to "get your money's worth" frrom it and spend ALL your holidays there, and I like to go to lots of different places. Some people like the idea of spending all their holidays in the same place each time but that's not for us, we like to do lots of different types of holiday.

The seaside type places that I would have wanted are too far away to go for the weekend and as I work in a school I'm tied to school holidays, which are the busiest times in those sort of areas.

We can hardly get tradesmen who want to work on our own house never mind from 200 miles away. The responsibility of maintenance was too much.

Don't always know very far in advance when we'd all be available to use it, and didn't want the potential aggro of family having a sulk if we said they'd have to wait to "book" a week because we needed to wait to hear when DH could have his annual leave, or when the kids' prom or other commitment was or something.

Too much extra expense generally. Extra bills (which you can bet no family freeloaders would offer to pay towards), insurance hassles, council tax etc. The only way to cover the extra cost would be to rent it out as a holiday rental and then that defeats the object as the busiest times for those would be the only times we were able to be there.

As the kids got older they grew out of English bucket and spade type of holiday and were more interested in travelling abroad so in the school holidays they wanted to hang out with their mates, they wouldn't have wanted to spend weeks at a time in a seaside holiday town with less to do for teenagers than there is here in our city, and crapper public transport. Plus things like driving lessons kicked in. Hard to to that when you're living in 2 different places.

Now they are at uni, they are off getting cheap flights to Europe with their mates for a few days, or doing internships all summer. One has a foreign girlfriend so has travelled to her home country. It would be a mistake to assume that as uni students they could spend their summers staying there and working, even if that's what they say they'd want to do now. Things happen, circumstances and feelings change.

If you both work full time, when are you going to find the time to sort your OWN house, do your OWN garden, see your own friends and family, run errands locally, if you're away at the other place so much?

And of course, the most important till last, the ethics of it all. It would just stick in my throat to be the cause of local people being priced out of their own area. It's noticeable setimes when you go to a popular tourist spot in this country, and the service in pubs or restaurants is bad because they can't find any staff (because they've flogged the cheap staff accommodation, and the locals have had to buy somewhere much further away). Also, a holiday town dies when half the homes are empty some of the year, and proper high street shops struggle. Have you ever been to a seaside high street? They're full of tourist tat shops and Fat Face.

If I were you, I would teach myself about investing, that's what I've done. You can do it very simply and make better returns than with ordinary savings accounts. Some of my money I keep in higher interest bonds and then use the interest that I get each year to put in a holiday fund. We have had some lovely holidays that the then teenagers will remember forever. 2 California road trips, weekends away in nice hotels, with no washing up, no maintenance or gardening to do like you would have to do in a holiday home.

Just having the choice and freedom is way more advantageous to me than the bind of a holiday home.

The other hassle is the things people leave behind. We had people leave clothes in the wardrobe, beach stuff in the utility cupboards, things that they want to use on holiday so just leave it there for the next time they visit. It can get clogged up with other people's belongings.

I own a UK timeshare in a historic building and we love it. The place is always spotless, well maintained and fully equipped including bedding. It isn’t liable for tax as we pay an annual maintenance fee, way lower than a week’s rental. It sleeps six so we sometimes have family meetups or the kids bring their friends.
This year we’re renting it out through the site management (£75 fee) and using the money to have a different holiday of our choice.
It definitely suits us and, while not being an investment, it hasn’t cost us a lot. Resales are v.cheap as original 1980s owners or their heirs are trying to sell them on.
Could you identify a place and a week in your desired area that would suit you?

On the other hand, we inherited my PILs’ property in a lovely part of the country and kept it for several years before renting and finally selling it. The distance and amount of cleaning, plus the worry of things breaking down and the feeling of being obliged to spend all our holidays there, made it a resource draining luxury.

If I were to buy a second home today, I’d buy somewhere close but in a completely different environment. So from city life to coast or countryside where we could escape to any weekend plus longer in the Summer

I see DH has an important weekend hobby and teenage DC will soon want to spend the weekend with friends, so a second home needs to be something YOU really love if you spend YOUR inheritance on it.

You won't have a relaxed beach lifestyle ... you'll be cleaning and doing jobs mostly ... unless you are retired.

My solution would be the same as @Thesoundofmusic23- rent a wonderful holiday home for 4-6 weeks over the summer so it feels like yours but without the admin and associated hassle. See whether you enjoy relocating for the summer.

DH and I have contemplated a holiday home several times but the ‘cons’ always outweigh the ‘pros’ unless you have an unlimited budget and wouldn’t notice the additional ongoing costs for cleaning, repairs, replacing things, decorating etc. I’m not convinced that, even with good intentions, family/guests look after a holiday home in the same way that you’d expect and it would drive me mad arriving at the house on a Friday night to find that the last guests forgot to take the bins out.

As the DC became teenagers their lives increasingly centred around being at home - sports, friends, exam revision, social events - and we felt that it would get harder not easier to persuade them to come away for long weekends or extended breaks.

As for the ‘I’d like to travel but DH doesn’t’ - we are in a similar position and DH goes off on his own or with the DC to see the places he wants to see while I am very happy being less adventurous. I don’t want to go and visit goat herders in the Caucasus mountains but if that’s what DH wants to do he’s very welcome to crack on!

I’m surprised no one has mentioned that you could treat it like a proper holiday home so it is rented out with an agent. That way it would be cleaned by their cleaners and no one would be able to leave stuff there. It would be possible to have some locked cupboards or a garage for your own things.
Wouldnt this make it more financially viable?

Holidays

The thought of going to the same place every year gives me palpitations.

Most people I know who have a second home think of it as just that. You live in it like any other home, just in a different place. The pleasure is in being “at home”.

You can still have holidays wlsewhere!

I only know two families with a second home and they do mainly go there for their holidays.

If you're an employee, annual leave of 25 days of the year tends to focus your mind to where you spend your holidays, Unless it's close enough to get to easily at the weekends, you won't be visiting often. DC have weekend activities, sports, parties, revision for exams which also restricts when you can visit. Yup, we've thought about this over the years and come to the conclusion that we have to be basically retired and not restricted to annual leave to make this worth our while. Plus we have rarely gone to the same holiday spot twice when we have the entire world to explore. I definitely wouldn't use my inheritance to buy a second home only for my inlaws to utilise mainly.

What to do with i guess £200K? (if stamp duty if £12K) is pump the maximum you can into your pension (for the last 3 tax years and utilise your ISA allowance for the current tax year. Invest any remainder and utilise that income for more exotic family holidays/upgrade your current home.

I grew up in the Lake District and from the 1980s I watched it get decimated by second home buyers. My school friends had to move out of area as they couldn’t afford to live there, my elderly mum and uncle lost their functional shops, the spirit of the place disappeared as houses sat there empty. It’s unethical don’t do it.

The thing I don't like about your post is that your DH is asking you to spend your inheritance on HIS dream holiday home so HIS parents can use it. There's something really icky and selfish about this. Add to that your comment about him spending more on cars than you. He seems quite entitled, and you're minimizing your wants and spending to facilitate his.

I have promised myself that when I win the lottery I will NOT buy holiday properties. They are an absolutely major hassle.

in my time I’ve had quite a few holiday rentals and I spend a fair amount of time wishing I didn’t.