Hamilton Reef
05-26-2007, 09:59 AM
Don't go crazy for that cabin up north
http://detnews.com/apps/pbcs.dll/article?AID=/20070526/OPINION03/705260325/1001/BIZ
05/26/07 Brian O'Connor (313) 222-2145 boconnor@detnews.com.
Gas prices are soaring and traffic's backed up which means it must be summer in Michigan, where nothing says "fun" like a four-hour crawl to the cottage.
A lot of us want to own a slice of paradise (that's Paradise, Mich., 10 miles south of Whitefish Point on Lake Superior). The National Association of Realtors says vacation-home sales rose 4.7 percent to a record 1.07 million last year, even as sales of primary homes fell by 4.1 percent.
Sales aren't quite as brisk here in Michigan, where our troubled economy means plenty of places "up north" are on the block at reduced prices.
But before you snap up a lakeside retreat, make sure the cost of your summer getaway doesn't get out of hand.
Try before you buy: The huge number of properties on the market means rents are dropping, too. Lease for a few weeks or even a season to make sure the community and lifestyle fit your family's needs.
That all-sports lake sounds great until you realize that all your neighbors are out buzzing away on Jet Skis at 8 in the morning. Likewise, if dining out is a priority, you want to be near something other than the last Dog n Suds in Michigan (it's in Montague, by the way).
Look at your timeline: How long will you want the property? Just until the kids go to college, or will it turn into an eventual retirement home?
The point is that you don't want to buy a three-season beach house away from doctors, banks, liquor stores and other essentials if you plan make your summer place a year-round retirement home.
Likewise, once your kids hit the teenage years, will they be heading off to camp, traveling for soccer and other activities that make a place up north impractical for the family? Remember: Nothing drives a teenager crazier than being out of text-messaging range of her posse.
Think other costs: Many communities don't give homestead or other tax breaks to nonresident property owners. You'll also have the cost of winterizing a summer home and may need to have a property manager check the place, too.
Another consideration: A second home means a second round of utility, insurance and maintenance bills. That's on top of other ancillary costs, like the boat you'll want to buy, furniture for the cottage and a half-dozen bear traps.
Do the math: A little research and number-crunching will help you see just where a second home fits in your budget. Some mortgages for second homes will charge higher interest rates than a primary residence. If you have a goodly amount of home equity in your first home, you might want to leverage that to buy your second home. Remember that home equity interest is tax-deductible.
Add it all to make sure that buying your own place up north doesn't send your family finances heading south.
http://detnews.com/apps/pbcs.dll/article?AID=/20070526/OPINION03/705260325/1001/BIZ
05/26/07 Brian O'Connor (313) 222-2145 boconnor@detnews.com.
Gas prices are soaring and traffic's backed up which means it must be summer in Michigan, where nothing says "fun" like a four-hour crawl to the cottage.
A lot of us want to own a slice of paradise (that's Paradise, Mich., 10 miles south of Whitefish Point on Lake Superior). The National Association of Realtors says vacation-home sales rose 4.7 percent to a record 1.07 million last year, even as sales of primary homes fell by 4.1 percent.
Sales aren't quite as brisk here in Michigan, where our troubled economy means plenty of places "up north" are on the block at reduced prices.
But before you snap up a lakeside retreat, make sure the cost of your summer getaway doesn't get out of hand.
Try before you buy: The huge number of properties on the market means rents are dropping, too. Lease for a few weeks or even a season to make sure the community and lifestyle fit your family's needs.
That all-sports lake sounds great until you realize that all your neighbors are out buzzing away on Jet Skis at 8 in the morning. Likewise, if dining out is a priority, you want to be near something other than the last Dog n Suds in Michigan (it's in Montague, by the way).
Look at your timeline: How long will you want the property? Just until the kids go to college, or will it turn into an eventual retirement home?
The point is that you don't want to buy a three-season beach house away from doctors, banks, liquor stores and other essentials if you plan make your summer place a year-round retirement home.
Likewise, once your kids hit the teenage years, will they be heading off to camp, traveling for soccer and other activities that make a place up north impractical for the family? Remember: Nothing drives a teenager crazier than being out of text-messaging range of her posse.
Think other costs: Many communities don't give homestead or other tax breaks to nonresident property owners. You'll also have the cost of winterizing a summer home and may need to have a property manager check the place, too.
Another consideration: A second home means a second round of utility, insurance and maintenance bills. That's on top of other ancillary costs, like the boat you'll want to buy, furniture for the cottage and a half-dozen bear traps.
Do the math: A little research and number-crunching will help you see just where a second home fits in your budget. Some mortgages for second homes will charge higher interest rates than a primary residence. If you have a goodly amount of home equity in your first home, you might want to leverage that to buy your second home. Remember that home equity interest is tax-deductible.
Add it all to make sure that buying your own place up north doesn't send your family finances heading south.