Maintaining a second home

Aged 55, spouse aged 61. Currently living in the midlands but hoping to retire to West Cork sooner rather than later. Two children in University. Considering buying in Cork in the coming months while remaining in current home, probably spending a few months a year in Cork until moving there permanently in approx three years. Work from home so location not really important. Have sufficient money on deposit to pay for second home and not considering renting it out. Apart from Property Tax and the cost of maintaining basics such as insurance, ESB, broadband, etc, are there any other costs I should be considering? Reasoning is that the return I am currently getting on deposit could be exceeded by capital appreciation of the second home over a three to five year period. Also, hopefully our principal home will also appreciate in value over that period if current trends continue. I believe buying in three years time could prove more costly, and believe I have found our ideal home in the location we desire. All thoughts welcome.. thanks.

Go for it!! West Cork is beautiful.

The cost of maintaining a second home is minimal in the grand scheme of things. It cost me circa €1500 a year to cover everything. Kidd Insurance do a good deal on holiday home insurance as long as you have no previous claims. Water charges on holiday home cost just €125 per year. Bord Gais do not charge a premium for low usage in electricity bills. Your biggest concern will be in securing the place and having a trustworthy person call there regularly to check the place over.

I agree with you, you are getting nothing for your money in the bank and if you have found your dream place well then go for it. West Cork is probably the most beautiful and scenic part of the country, the scenary down there is spectacular and idyllic and yes there will always be a demand for holdiay properties in that area. Best of luck to you with your plans.

Montbretia said:

I ...believe I have found our ideal home in the location we desire.

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This is really the key. You have found your ideal home. Even if someone could show that it would be financially more efficient to buy in three years' time, it might be no good, as your ideal home might not become available.

House prices could fall over the next three years so your ideal home could become even cheaper. However, the risk of it becoming unaffordable outweighs the benefit of you having more money from buying it more cheaply.

And you will have the use of your new holiday home for the next three years.

I assume that you have no mortgage on your home and that you have an adequate pension? If you don't have both of these, it may be better using your deposit this way instead.

Brendan

Brendan Burgess said:

This is really the key. You have found your ideal home. Even if someone could show that it would be financially more efficient to buy in three years' time, it might be no good, as your ideal home might not become available.

House prices could fall over the next three years so your ideal home could become even cheaper. However, the risk of it becoming unaffordable outweighs the benefit of you having more money from buying it more cheaply.

And you will have the use of your new holiday home for the next three years.

I assume that you have no mortgage on your home and that you have an adequate pension? If you don't have both of these, it may be better using your deposit this way instead.

Brendan

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Brendan, we don't have a mortgage and our pension's are just adequate (what private ones aren't nowadays?) but have no desire to put the money in this direction. Thanks for the comments, security of the property will be my major concern but, in our situation, buying now seems the way to go.

If you are top rate tax-payers close to retirement, contributing to a pension fund is by far the best use of your finances.

Owning a holiday and retirement home is nice, but having a comfortable pension is a higher priority.

Brendan

Brendan Burgess said:

If you are top rate tax-payers close to retirement, contributing to a pension fund is by far the best use of your finances.

Owning a holiday and retirement home is nice, but having a comfortable pension is a higher priority.

Brendan

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No, unfortunately not top rate tax-payers - pension funds we have are worth @250k each.

As you are close to retirement, it may be worth contributing to the funds, but it's not as clear.

Brendan

Montbretia, the following is part of a post I contributed here some weeks ago.

The Holiday Home in Ireland:- We bought in an area that makes the Wild Atlantic Way look like the M50 on a Friday afternoon. The next parish across the water is Manhattan and our grandchildren swear they can smell the hotdogs being cooked in 57th Street, New York. The nearest shop is 3 miles distant, but the drive there and back is like an obstacle course. Think you've seen potholes? You haven't! Our nearest neighbour is a well known sportsman. He spent one weekend in his holiday home there in seven years. Ours is a cottage, his is a new bungalow. His has more growth now than the Amazon Jungle. Grass has to be cut, paint has to be renewed, driveway must be nuked for weeds. Sheep come in and welcome they are. Shout at them and the nearby sheep farmer will have a contract on you.

The local GAA club expect you to pay into their weekly local Lotto. You become a member of their club too. You must go to Mass in the church six miles distant every Sunday. Considering staying away is a no-no. The Parish Priest will welcome you to their parish and before you've got back into your car he hands you a little envelop already with a number on it.

If you turn up with Aldi purchased groceries in Dublin you will be informed that you should have bought the groceries in that aforementioned shop. If you don't you will be informed of the hardship suffered by the locals if that shop closes for the winter. For a quiet life you boycott Aldi.

You travel down to the local pub where you have no chance of ever being breathalysed when you leave. The locals know when the force "car" even leaves the town thirty miles away. Then after a few pints some local self styled gobshite informs you that because of the likes of you property has increased in price locally and his daughter cannot even get a mortgage.

When you've sucked in the guilt, you look at the locals in a different light. Oul' Stock who waves to you from that 1960's safety cageless tractor is really sizing you up. Oh! I forgot to mention rights of way. All of the locals have rights of way through your property. Lock your gate and pay the price.

But, you were once welcomed there as a tourist. Now, you're one of them. If you fall short they will help. If you are sick, they will check up on you. If your car strays into a ditch, they will pull you out. If somebody thinks you are about to be robbed, they will be the first on the scene to prevent the crime. Your grandchildren will be treated like royalty by other kids. Ensure your wife and daughters can talk openly about their stay in whatever maternity hospital.

The above is relevant and ignore at your peril.

I don't have any qualifications to advise if a holiday home is for you or not. However, having gone down the road of once owning (a) Mobile Home (b) Holiday Home in Ireland and (c) still owning a holiday home in Spain I feel I can add to your concerns.

Brendan is right in his advice above. I don't know if you will be taking out a mortgage or financing the venture with savings. Either of course will put a dent in your everyday financial wellbeing. I don't often agree with Brendan Burgess, but his advice on the subject is not bad. Take it from a leper who dipped his legs as against a toe in the water.

The dream is terrific. Holiday home in beautiful West Cork. A place to spend holidays and as many weekends as I can squeeze in. Ultimately, we'll retire there. And when we are not using it we can rent it out; perhaps even make a few bob from it.

The reality might not be the same as the dream. You have to maintain the holiday home and its grounds. Cutting grass appears to be a minimal chore but if you have to travel from the midlands every few weeks, it becomes a chore. But, you can cut the grass on your weekends away! Yes, but you are cutting into your recreation time. Then there is the maintenance of the building. Your concern when winter comes re broken pipes takes on another level. Break-ins can occur. You're running your holiday home by remote control. It's worth a quarter of a million - not to be sniffed at. You have got to give it much care. Have you the time?

You have property tax, utilities etc on your new purchase. It costs in petrol to drive there and back. You will need lawnmower, washing machine, cooker and in fact everything you have in your main property. Suddenly, the cost of the holiday home is added to everything else you need.

I don't know if you have lived in the area. Holidaying and living there are two different things. Are the neighbours conducive to receiving strangers? Will you fit in? Will your family and their friends be acceptable there?

Is your holiday home an old house? If so, maintenance can be dearer than you think. Does the house need heating to be installed? Does it need to be modernised? Does it need to be insulated?

I think I have given you food for thought. Far away fields are green.

Leper said:

I don't have any qualifications to advise if a holiday home is for you or not. However, having gone down the road of once owning (a) Mobile Home (b) Holiday Home in Ireland and (c) still owning a holiday home in Spain I feel I can add to your concerns.

Brendan is right in his advice above. I don't know if you will be taking out a mortgage or financing the venture with savings. Either of course will put a dent in your everyday financial wellbeing. I don't often agree with Brendan Burgess, but his advice on the subject is not bad. Take it from a leper who dipped his legs as against a toe in the water.

The dream is terrific. Holiday home in beautiful West Cork. A place to spend holidays and as many weekends as I can squeeze in. Ultimately, we'll retire there. And when we are not using it we can rent it out; perhaps even make a few bob from it.

The reality might not be the same as the dream. You have to maintain the holiday home and its grounds. Cutting grass appears to be a minimal chore but if you have to travel from the midlands every few weeks, it becomes a chore. But, you can cut the grass on your weekends away! Yes, but you are cutting into your recreation time. Then there is the maintenance of the building. Your concern when winter comes re broken pipes takes on another level. Break-ins can occur. You're running your holiday home by remote control. It's worth a quarter of a million - not to be sniffed at. You have got to give it much care. Have you the time?

You have property tax, utilities etc on your new purchase. It costs in petrol to drive there and back. You will need lawnmower, washing machine, cooker and in fact everything you have in your main property. Suddenly, the cost of the holiday home is added to everything else you need.

I don't know if you have lived in the area. Holidaying and living there are two different things. Are the neighbours conducive to receiving strangers? Will you fit in? Will your family and their friends be acceptable there?

Is your holiday home an old house? If so, maintenance can be dearer than you think. Does the house need heating to be installed? Does it need to be modernised? Does it need to be insulated?

I think I have given you food for thought. Far away fields are green.

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Thanks for your thoughts Leper.

The plan (and dream) has been to move to West Cork for a long time. Have holidayed in the area for over twenty years, including in winter, and have a good knowledge of the area, although I agree with you this is not the same as living there full-time. We are approaching that time of our lives that we would make this move, probably full-time in four years. However, I now work remotely and so location is not an issue, provided the broadband is reliable, and that appears to be improving in this part of Ireland. The idea is to buy and live in West Cork for several months of the year, including winter. The house we have found, I have no concerns with or with the neighbours, though the possibility of break-ins is always there, wherever you live.

The gist of my original post was whether this made financial sense. It is to be paid for through savings, which are presently earning a meagre amount of interest. Balancing up the annual maintenance cost of the new property over four years against the likely increased price of the house in four years time is the quandry. Also, the house is quite unique in it's location and such a property may not be available in four years time.

We fully intend to move to West Cork, the question is when is the best time time to buy. On balance, we feel it could be now.

Leper said:

Montbretia, the following is part of a post I contributed here some weeks ago.

The Holiday Home in Ireland:- We bought in an area that makes the Wild Atlantic Way look like the M50 on a Friday afternoon. The next parish across the water is Manhattan and our grandchildren swear they can smell the hotdogs being cooked in 57th Street, New York. The nearest shop is 3 miles distant, but the drive there and back is like an obstacle course. Think you've seen potholes? You haven't! Our nearest neighbour is a well known sportsman. He spent one weekend in his holiday home there in seven years. Ours is a cottage, his is a new bungalow. His has more growth now than the Amazon Jungle. Grass has to be cut, paint has to be renewed, driveway must be nuked for weeds. Sheep come in and welcome they are. Shout at them and the nearby sheep farmer will have a contract on you.

The local GAA club expect you to pay into their weekly local Lotto. You become a member of their club too. You must go to Mass in the church six miles distant every Sunday. Considering staying away is a no-no. The Parish Priest will welcome you to their parish and before you've got back into your car he hands you a little envelop already with a number on it.

If you turn up with Aldi purchased groceries in Dublin you will be informed that you should have bought the groceries in that aforementioned shop. If you don't you will be informed of the hardship suffered by the locals if that shop closes for the winter. For a quiet life you boycott Aldi.

You travel down to the local pub where you have no chance of ever being breathalysed when you leave. The locals know when the force "car" even leaves the town thirty miles away. Then after a few pints some local self styled gobshite informs you that because of the likes of you property has increased in price locally and his daughter cannot even get a mortgage.

When you've sucked in the guilt, you look at the locals in a different light. Oul' Stock who waves to you from that 1960's safety cageless tractor is really sizing you up. Oh! I forgot to mention rights of way. All of the locals have rights of way through your property. Lock your gate and pay the price.

But, you were once welcomed there as a tourist. Now, you're one of them. If you fall short they will help. If you are sick, they will check up on you. If your car strays into a ditch, they will pull you out. If somebody thinks you are about to be robbed, they will be the first on the scene to prevent the crime. Your grandchildren will be treated like royalty by other kids. Ensure your wife and daughters can talk openly about their stay in whatever maternity hospital.

The above is relevant and ignore at your peril.

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So that's why you chose the moniker "Leper" then!

Montbretia said:

Thanks for your thoughts Leper.

The plan (and dream) has been to move to West Cork for a long time. Have holidayed in the area for over twenty years, including in winter, and have a good knowledge of the area, although I agree with you this is not the same as living there full-time. We are approaching that time of our lives that we would make this move, probably full-time in four years. However, I now work remotely and so location is not an issue, provided the broadband is reliable, and that appears to be improving in this part of Ireland. The idea is to buy and live in West Cork for several months of the year, including winter. The house we have found, I have no concerns with or with the neighbours, though the possibility of break-ins is always there, wherever you live.

The gist of my original post was whether this made financial sense. It is to be paid for through savings, which are presently earning a meagre amount of interest. Balancing up the annual maintenance cost of the new property over four years against the likely increased price of the house in four years time is the quandry. Also, the house is quite unique in it's location and such a property may not be available in four years time.

We fully intend to move to West Cork, the question is when is the best time time to buy. On balance, we feel it could be now.

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You have the readies which probably will make you some money rather than being cooped up in some disearning bank account. You appear to have a wise head on sound shoulders, so go ahead and buy as prices probably will not drop lower. Best of Luck.

so-crates said:

So that's why you chose the moniker "Leper" then!

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Nooooooooo. I use the word "Leper" for a special reason. I was treated like a very sick leper once upon a time in a former life and although I am a practicing Catholic, there is one guy I'm waiting to get the better of . . . and he doesn't contribute here.

Well they do say patience is a virtue!

There are several little "irksomes" when you buy a holiday home. Let's face it, the foremost reason is investment. Some investors call such investments as "for their kids" - "a retreat" - etc. But, the bottom line is investment. Don't believe anybody who tells you anything different. It is not all plain sailing either.

We bought a former County Council cottage that had extensions on extensions and none of them with planning permission. A father-of-at-least-eleven owned the property and reared his family there. He is a small builder and still a gobshite. He himself was reared there too in a previous generation. He built a mansion up the road and used to let out the cottage to anybody who would give him a few bob. He was a great guy to inform German escapers-from-the-ratrace that they were in the Real Ireland. Strangely, some of them believed him.

We had a mobile home on a site nearby for years and knew the terrain and the neighbours. So nothing could go wrong? - Wrong!

Three years after we bought the cottage a conversation was heard in the local pub amongst an audience of fairly nosey listeners.

Mr Builder:- (From a bar stool and smoking eventhough indoors) Jazus, Leper, I sold that cottage to you for a song; you'd get a quare few bob for it now
Leper:- Well, the underpinning was completed and it is a sound structure now.

Mr B:- I let it go too cheap, you're an awful man Lep.
Lep:- We put in heating, replaced the what-you-called a septic tank with something that worked.

Mr B:- The old septic tank did us and we never needed heating (this is the guy in a now hugely insulated and heated with several kinds of heating mansion). You didn't need to do the renovations you did and you didn't employ me and my local workmen.
Lep:- The flat roof over the (extension) kitchen, which you said might need a roll of felt needed to be replaced fully and a decent roof installed in line with the rest of the roof. It had rotted and every bit of wood was not only continuously wet but ridden with every form of bug. And yes, after all you told me about the soundness of the place, I wouldn't trust your opinions. In fact, we had to replace the whole roof on the rest of the cottage too.

Mr B:- You know it well, Lep (a few guffaws and eyes towards Heaven). (the listeners cowering in silence ).

Lep:- I employed local labour, some of whom used to work for you until they were short-changed.
Mr B:- (louder) You're an awful man Lep. But, you'd make money now from it?

Lep:- We put in new dry lining and all things considered we would still lose a few bob. Oh yeah! The new neighbour who bought the site next door informed me you told him that his sitearea extended half way up our lawn.
Mr B:- [You're an awful man, Lep!, shor there's nawthin' wrong with tryin' to make a few bob . . .].

Mrs Lep arrives not having heard any of the foregoing. "How's the family B, you wife's a great lady." [She's an awful woman! - she misses the cottage].

Mr Builder retreats further down the counter "You're an awful man Lep"

If you are buying a holiday home, employ an engineer (not from the local area) to check everything out before you spend a shilling.

Leper - you should write that up in a play/short story. It reads like something out of 'The Field'!

Yes Slim, some thoughts of a disillusioned Leper. But, all of what is written above about buying a holiday home is in the ha'penny place when we bought the mobile home a few years earlier. If only that mobile home could speak . . .

Right enough, having re-read all of the above it does look like something out of "The Field." I'm just thinking of some of my neighbours there "Tis your cottage, Lep!"

Leper said:

Yes Slim, some thoughts of a disillusioned Leper. But, all of what is written above about buying a holiday home is in the ha'penny place when we bought the mobile home a few years earlier. If only that mobile home could speak . . .

Right enough, having re-read all of the above it does look like something out of "The Field." I'm just thinking of some of my neighbours there "Tis your cottage, Lep!"

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Yeah, but I think you'd be in the 'outsider' role!

Tell us about the mobile home, Lep, tell us about the mobile!

We've bought a holiday home which we shipped and didn't lose on the deal. We bought a place in Spain and now the price of property there although recovering will never reach what we paid for it (for us it was not a good investment). You would think buying a mobile home and using it would be the easiest of the lot, but no, there are pitfalls that even a cute leper couldn't predict.

Back in the 1990's we had four young children. Mrs Lep got a brainwave and thought it would be a good idea to try an buy a mobile home for weekend and holiday use. We went to the mobile home sales people in different locations and found the prices far exceeded our expectations and we forgot about the hunt for a while. We knew site fees etc would add to the price. The whole dream was beyond us and neither of us could see that a mobile home would ever be affordable.

On one of our trips to the seaside we noticed a guy with several low concrete platforms in a protected field near a beach. We called on the spur of the moment and were informed that he was opening a mobile home park and as yet had no customers. I informed him that the cost of mobile homes was beyond us and he informed me that his son was nearing completion of a bungalow nearby and was using a mobile home on the building site. The mobile home was old, but not in too bad a state and it was offered to us fairly cheap. I negotiated a 3 year deal with the mobile home park owner, again at a knock-down price. He wanted customers and we wanted to be there. A marriage of thoughts made in heaven.

Mrs Lep was given choice of concrete platform and with her female eagle eye for all things sunny, bright and cheerful, picked what was definitely the best location in the mobile home park. A few weeks later yer man's son had his house completed and the mobile home was placed in the park for us. It was connected to plumbing, electricity and waste pipe. Brilliant.

We couldn't wait to use the mobile and being the only tenants there life at weekends was fairly quiet except for conversations with (not their real names) Tom the owner and his son Gerry. Gerry had married Mary and had settled into the bungalow. Mrs Lep loved the place; the kids thought they were in heaven with the nearby playground and the beach and the sand-dunes., To be honest I felt some pride in attaining what appeared to be the un-attainable. Playing outdoors with the kids, swimming in the sea, fresh air, slower pace of life, things were looking up after years of fairly tough slog.

Throughout our first summer there we got new mobile home neighbours mainly from Limerick, a sprinkling from Cork and others from different parts of Ireland. They had kids and Mrs Lep and I were like the Pied Piper of Hamelin on our visits. There were no computer games back then. But, we made do with simple games like Skipping, O'Grady-Says, Donkey, Football, kick-the-can, kids tennis etc. Mrs Lep taught all the kids on the park nursery rhymes from her childhood which were used in the many games we played. Each day flew we were having so much good clean fun. It appeared that so many families were having the time of their lives together.
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[I'm rushing to a carol service, so I will continue tomorrow or the day after] - Next Episode:- Everything not quite as it seems . . .