I can't speak to Colorado, Utah, or SC. But I do have a winter home (actually, my permanent legal residence) in West Palm Beach, Florida. I'm been looking to sell that property and move to the Jupiter/Tequesta area for some time, so track those markets quite closely. And I can tell you this. The Prime locations in Florida are valued for perfection, or are significantly overvalued. Sellers have gone from having multiple bids in one day a couple years ago to languishing on the market now. Quite a few people I know have pulled homes off the market for lack of interest, and I can't see how the whole thing doesn't see a major correction over the next year or two.

And unlike the rest of the country, it isn't an interest rate thing. Prime locations along both coasts and the Panhandle area are have typically seen a lot of cash buying seniors.

But I gotta ask you this. I'd never live there if it weren't for my wife. Why in the hell would you even want to think about Florida when you've got a great state like Texas that is probably more affordable?

Turned 50 last year and recently went through this exact same analysis. Also very relevant to our decision making is we have 9 year old twins.

Our target was a specific area in Colorado where we have been vacationing for years (already own a fractional that we use a lot and has appreciated a lot since we bought). We're long since priced out of the a main resort town…but began considering nearby towns/properties.

You never know for sure of course, but I don't see prices dropping in this area. In fact, I have seen more and more people do what we're doing and look for property outside of the main resort town (which besides unaffordable prices for most people, also has limited room to grow) …so I believe those surrounding areas/towns will start to develop more. We've seen this happening over the last few years.

Anyway, long story short, we bought a lot last year because:

- we think prices will continue to increase
- relatively low taxes and holding costs
- found the right lot (really pretty unique property that may be hard to find later); and
- generally wanted to get the process going as we've only got so many years/summers with kids still at home to enjoy the property with

We also thought maybe we'd build right away, maybe not - but of course we've already started that process (design, plans, find builder, site work etc) and hope to break ground within a month or so.

The lot itself wasn't too difficult of a financial decision…but going ahead and building was much tougher. A more conservative decision would be to invest this money (but no guarantee better return there of course). But we hedged the decision with the idea that we could always rent (seasonally or long term) if we had to (we're not planning to do that as of now if we don't have to) or if **** really hit the fan, could probably sell and make a profit.

But we're taking the leap cause life is short and we want to enjoy it ourselves, but especially with our kids while they're still young. I also see it as our future retirement home and believe it would be much more expensive down the road. So long story short, we're biting the bullet and I can't wait to enjoy it for many years! I think it may be tough at times but years down the road we'll look back and be very happy we did it.

Keep in mind, especially in CO, there are a lot of communities that have short term rental bans. So if you plan to buy, make sure it is out of city limits to avoid this.

I reside in Meeker, CO and there are a ton of vacation homes here and its a decently strong market for the prime mountainside homes. However, around here, you are talking over a million for a decent home with mountain acreage. There are only 3 builders around here and they are all 2-3 years backed up.

I would say Option 3 is the best idea and then move to Option 2 once you are built/bought and find a groove and assess your needs/wants.

A cautionary tale, with the end result still unknown:

We bought a unique acreage lot in the hill country of Texas in 2021, as prices were rising. Our thought was build a small casita or guest house, and then build a main house during full retirement. We took money out of the stock market to make it happen. Our carrying costs (taxes, HOA fees) are higher than normal, with a lot of high-end amenities offset by a wildlife exemption on most of the land.

For a year or two, my best guess is we had paper gains of 15-30%. Based on my current analysis, we'd take a 20-30% loss, at the least, after it sits on the market for 6-12 months.

We just got a special assessment from the HOA for $7000 (I voted for it, as the alternative could negatively impact our development's value to a greater degree).

Costs to build have gone way up since our initial analysis, and for ground prep, utilities, and a small guest house, my initial cost estimate of $350-400k is now probably over $600k (the neighborhood has VERY HIGH construction standards and restrictions, which we generally like). We have repeatedly heard from real estate professionals (and we agree) that a custom ranch house should be thought of as your own personal taste and lifestyle choice, and you should expect less than what you paid in resale proceeds, especially if you sell quickly. Short term rentals are not allowed on our property (as in many others), so you may not have that option open to you to offset costs or raise income.

We still like the land and community and its amenities. We would like to have a second home again (used to have one in Santa Fe, NM). HOWEVER:

From a financial perspective, we would have been FAR better off leaving the money in an S&P index fund, and it's not remotely close. Do it for a quality of life reason, but don't count on it being financially attractive.

Something that very few people talk about is the amount of work that it takes to keep a remote property up.

When I go to a property on Lake LBJ I plan on spending one day fixing stuff. It is no big deal to me, but it is not like a vacation. It is just like normal life.

I have a friend with a place on the Texas coast and he does the same. Difference is that salt water kills everything but fish. Maintenance is on an accelerated schedule.

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I also don't like the fact that I am sort of forced to go there on vacation.

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This really deters us from buying a vacation home. The wife & I seldom travel to the same place twice (too much of the world we haven't seen).
I'd rather have the $$ earning interest & travel flexibility. Plus no worries about wildfires, hurricanes, pipes busting in freezes etc. I have enough of that with my local rental home!

I wanted to post to share my experiences and perspectives on the topic with the purpose of shortening what can be a very expensive learning curve. I will say there is really no right or wrong with anyone's perspective on here. But I think it's important to have some depth to your understanding about each pro and con.

For perspective on my experience, we bought a gulf front condo in Florida in Seagrove on 30A. We got it in the aftermath of the BP gulf oil spill when the gulf coast beaches were going to be "ruined forever". It was the buyer's market of buyer's markets. We sold a few years ago at the height of the post Covid housing fever. That was by far the best part of the experience. The buy sell was kind of luck but kind of not luck. When we bought the place, it was all the money for us. We absolutely had to rent it out. We wanted it to be our vacation house but we needed the rental income to subsidize our ability to afford the place.

So here we go …

No matter what anyone says, you are going to have problems with the management company. And to make that point more emphatically, you will have problems with your second and third management company.

Managing a vacation property is a full time job and it's hard work. So you can't do it effectively and the person who is managing will get tired of doing it and the housekeepers will always turn over and your place will never be as clean is it needs to be.

When we did the rental math of the beach place, we could make it work. But, before Covid, we were being told the rental demand was going down and we would have to switch from required weekly rentals to long weekend rentals to get the place rented to get revenue. Covid changed that dynamic and kind of saved us there.

Relative to rental income, we also ran the math on a Colorado place. Being really dialed in on the financial dynamics of the beach place made us extremely solid relative to running the numbers for a mountain place. The bottom line there - the numbers don't work in Colorado. The seasons are shorter, the cost of living for the management people is higher and I believe mountain life may be harder on a place than the ocean. We looked at countless places in Vail, Beaver Creek and Telluride and the beach was way better financially than the mountains. And we had a long series of good luck at the beach and broke even. And by "breaking even" I mean we only lost 5 to 10 thousand a year.

The beach was break even with us never going during prime rental market and we rented every week in the summers. Realize that unless you go during off season, or when it is not rented, you are technically renting it from yourself. And if it is not renting at 100% during peak times, you will be negative P&L wise. Keep in mind, we bought with as perfect timing as we could get and we rented during some pretty good times. And it broke even with us never going during prime time.

You will either be in a complex with an HOA or you will have a single family home and need a property manager. The single family home in a mountain town with a property manager will be a major expense. For a high end place you could easily have a few hundred thousand negative with maintenance - in good rental times. And virtually every single family home will be a "high end" place. Which leaves us with the HOA's. Ours was awful. We had a 16 unit place that was built in 2000 that was designed to have 10 to 16 families staying at their beach place part time. The creation of VRBO changed the dynamic (of everywhere) and our place soon had way, way too many people staying there. These units could sleep ten so during July we could have 160 people on property at a place that wasn't designed for that kind of use. But the VRBO rental market income potential had driven up prices (everywhere) so you kind of need the rental income to justify the price of the place. So all the places are priced with rental income considered and if you don't rent the place you are paying prices that reflect having rental income. So if you wanted no renters you were giving up $150,000 in rental income. Which for us was tough to give up even if we able to afford not having rentals. We had way too many people staying there and the place got excessive wear and tear. Then you have half the owners wanting to spend as little as possible on the common areas and the other half wanting their beach place all dialed in. So be prepared for an unavoidable HOA headache or a very expense property manager.

Two HOA, maintenance things to consider. First, when the hurricane came through Florida, we were about 50 miles west from the eye of the storm. We got "lucky" in that the counter clockwise rotation of the storm in our area drove the storm surge out to the ocean. But if we would have gotten flooding or got our roof ripped off we would have been out of income for a few years. When there is hurricane damage, everyone needs construction at the same time and it's takes years to get back online with renting. So that would have been $300,000 to $500,000 in lost revenue. That would have hurt us. Second, we were looking a condo in Kiawah and I was chatting it up with one of the owners. He mentioned they had a $250,000 assessment on his place for exterior refurbishment. That place had owners that wanted to have their beach place "dialed in". And that is apparently expensive. Be prepared there.

As mentioned on some of the posts, you will spend a day or two working every time you are at your place. The bathrooms will need to be really scrubbed down even though you have paid for regular "deep cleanings". We had nice light fixtures and there would be Coke or BBQ stains on them and you have to clean that up. Things always get stolen. Not the big stuff, but glasses, wine openers, remotes - crazy stuff. But stuff that nevertheless had to be accounted for and replaced. Then your tv will go out. You can get your management company to buy one or you can spend a day tracking down a deal at Best Buy to save $1,000. And you need a spare tv in the owner's closet in case one goes out and you need to get one up instantly so you don't get destroyed on the reviews. Same with the upgraded toilets you need. You can't have a clogged toilet at 10 pm on Saturday night. You absolutely have to have perfect reviews to be at the top of the searches. Then one bedroom lamp gets broke. The renters pays tor the broken lamp but you have to buy a new set because you can't find the same lamp to match the one that is still good. Essentially your place, even if not abused, is getting major wear and tear. It goes on and on. Remember, when you are there you have 4 or 6 people and you are taking care of the place. When the renters are there they are all about bang for the buck. You will have 12 or 14 people staying at the place that supposedly sleeps 10. Week after week of that is hard on a place.

We made the mistake of waiting too long to replace the furniture and didn't set up a reserve. Keep in mind we pretty much broke even annually not counting furniture and appliance reserves. Your refrigerator will get scratched, your stove will be in rough shape and your furniture will be disgusting in four years. And you need perfect reviews. So factor that into the financials.

When looking for a place, notice there are two kinds of homes. One will be a true second home and one will be a home built to be a VRBO. The former "feels right" but is not as geared for revenue. The latter will have four masters on different floors with tiny closets. They just have a different design than a regular house. So if you are looking in a place with high amounts of VRBO houses being built, see if you are good with these rental designed homes as your second home. I can say those VRBO houses do not feel good to us and the second home places do not max out the VRBO income. And I will say from my experience that the VRBO houses are built to a different standard in an environment where you have to have a solidly built house. The buyer of the VRBO houses are all running the rental numbers and the builders can't sell them as easily if they have houses with the expense of better build out.

Another factor - post Covid drove up pricing significantly. Work from home is not as feasible as it was two years ago when someone could get away with being out of town for a few months. And I really have the strong feeling that the rental market is going to weaken. When the people that bought at peak times realize that they are not spending as much time at their place as they anticipated and then they start taking $100,000 to $200,000 annual P&L hits, I believe this type of market will soften up significantly. For buyers now, I think the market has softened up some the past year. But from my experience it will come down pretty hard in the next few years. So if you buy a place, make sure you really like it as you may have a firm grip on it down the road.

I hope this helps.