Turning my childhood home on the lake into a rental property - need advice

[castlebreakfast]

I grew up on the lake (waterfront property, we lived there year round). My parents still live in the house. My father, who is 81 and who bought the house in '89, would like to sell the house within the next few years and use the proceeds to help fund his grandkids' college educations (the oldest is 13) and to give assistance to family members who are not well off, as well as to help fund the next chapter of his and my mom's life (perhaps a rental apartment near Boston).

However, I have long had a dream of fixing up the house (it needs a lot of work) and turning it into a rental property in order to keep it in the family so that we can enjoy it for years and hopefully decades to come. With the funds from the rentals, I plan to satisfy what my father wishes to do with the money he would earn from selling: that is, put it into funds for the grandkids' education as well as to the less fortunate relatives he had in mind, as well as helping to fund the next chapter of his and my mom's life. Obviously this funding would be a years-long process, not immediate (as it would be if he sold). And then, after we've made enough to satisfy my father's initial financial wishes, we can use the rental funds for ourselves (my 3 brothers and our families).

I have not raised this issue with my father yet. I believe he would be reluctant and irritated at first since he has his own plan for the house which I'd be suggesting an alternative to. I have told one of my 2 brothers and have not told the other (the one with 3 grandkids in early teenage years), though I would plan on doing so before telling my father.

My plan is to use some of my own savings to fix up the house and to be the point man for organizing rentals, etc. I don't think my brothers would have the time or willingness to do this, and at this point I think I'd be comfortable taking on the responsibility since it would inconvenience them to go with my plan (b/c if they went with my dad's, they'd get the money from the sale for their kids' education more immediately, whereas with my plan they'd get it gradually). One brother doesn't use the house a lot (he lives in southern NH), and the other loves the house but lives down South.

The house was purchased in '89 for about $330,000 (it's all paid off now), and is probably worth $1.4m or $1.5m now. North end of the lake, right on the water. It's a 2-floor, 3 Bed, 3 bath house with a loft space upstairs (I'm thinking it could fit a good amount of people - family or perhaps extended family - for rentals).

I live in NYC and would have to be managing it mostly from there, so I was thinking of using a property manager (perhaps going up there more often in the early years of the rental to keep tabs on things, as well as being close when renovations are happening).

If it isn't already clear, I'm very much a novice in all of this. But this is my dream and I wanted to see how feasible it is or if I sound crazy. I have a lot of memories of this place and there is no place more meaningful to me than the Lakes Region and White Mountains, and I'd love to be able to have a home there when my parents leave NH. I want the area to be a part of the rest of my life and my family members' lives. That is the primary motivation (rather than making money). What steps would you recommend, financial or otherwise? Thank you!

EDIT: Just to be clear, I don't have the financial resources to buy the house outright, otherwise I'd do so. So I would have to ask my father to pass the house over to me, or to me and my 2 brothers, or think of some other financial solution (friends have suggested that there are various loans that can be arranged in a situation like this - a loan either to me, or to my father... it's not my area of expertise so I'm not sure of the details).

[thinkxingu]

Other than the complexity of your plan vs. selling outright, there are two other concerns I'd have:

1. Putting YOUR money into a family endeavor. That complicates the finances in terms of ROI distribution, ownership, etc. (beyond the initial complications you already address).

2. The reality of making the level of money your father is looking to make via renting. I'm not sure what a three-bedroom home on the lake would rent for, but it would only fetch "premium" rates for a couple months a year, and the rest of the year—the coldest/most energy demanding—would be empty or much less lucrative. After subtracting taxes, maintenance, repairs, cleaning, and management fees, the money just might not be there. I mean, a single replacement roof could possibly wipe out a year's rental profits, right?

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[castlebreakfast]

Thank you - do lake homes ever attract winter renters? Skiiers, snowmobilers, ice fishermen?

Originally Posted by thinkxingu

Other than the complexity of your plan vs. selling outright, there are two other concerns I'd have:

1. Putting YOUR money into a family endeavor. That complicates the finances in terms of ROI distribution, ownership, etc. (beyond the initial complications you already address).

2. The reality of making the level of money your father is looking to make via renting. I'm not sure what a three-bedroom home on the lake would rent for, but it would only fetch "premium" rates for a couple months a year, and the rest of the year—the coldest/most energy demanding—would be empty or much less lucrative. After subtracting taxes, maintenance, repairs, cleaning, and management fees, the money just might not be there. I mean, a single replacement roof could possibly wipe out a year's rental profits, right?

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[TiltonBB]

At best, this would be difficult to do and may strain family relationships.

If it sold for $1.5 million and if after real estate commissions and any capital gains taxes he ended up with $1.2 million that would be $400,000 each to the three of you. If your brothers got the money and put it somewhere safe at 5% that would give them each $20,000 per year.

Do you think you can pay the taxes, insurance, and maintenance, put money aside for reserves, and net enough in rental income after that to pay $40,000 per year to your brothers? Probably not likely. And that amount is only interest with no paydown of the principal. If I was one of your brothers I would say sorry, but no, I would rather have the cash now. There is no gain to them unless they are using the house too, and that would cut into your rental income. If you intend that anyone else in your family use it you would need a plan for who can use it, and when.

When you go to check on the property, where will you stay if it is rented? Do you already have a list of maintenance and cleaning people you can call when you are out of state and a renter calls with an emergency? If it rents by the week, most rentals on the lake have checkout at 10 AM Saturday and the new renter arrives at 3 PM Saturday. That is a short window for cleaning and any minor maintenance.

If it is priced right you can probably count on 8 - 10 weeks of rent in the summer and a much reduced rate in the winter. It will rent better if you have wifi, cable TV, air conditioning, and a gas grill. Someone needs to clean that and keep the propane full. If you have a decent dock, a sandy walk into the water, and good swimming area that will help you to rent it. People do rent in the winter and you can either do short term or one off season tenant. If the house is vacant and not winterized you will need someone to check on it.

I have a summer weekly rental in Gilford and during the off season I get one tenant from September until Memorial Day. The winter rate for one month is about 40% of the summer weekly rate for just one week.

[John Mercier]

"as well as to help fund the next chapter of his and my mom's life (perhaps a rental apartment near Boston)"

That was the cost I noticed.
I can't imagine that is going to be inexpensive.

[8gv]

Setting aside the financial, logistic and sentimental issues I will offer this:

Whatever your relationship is with your siblings I suspect it will be not as good if you do this.

As I get older something that is very important to me is my three kids getting along with each other.

Your dad may feel the same way and if so, he may see the plan you have presented to be well intended but a relationship mine field.

[thinkxingu]

Originally Posted by castlebreakfast

Thank you - do lake homes ever attract winter renters? Skiiers, snowmobilers, ice fishermen?

Yes/maybe, but as noted in the response above, at a reduced rate and frequency.

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[BillTex]

Have you proposed a joint purchase with your siblings?

How about turning the property into a duplex-then you could use 1/2 for your family and rent 1/2.

Good luck with your plans, I understand your desire to keep the home in your family…and that $ isn’t everything.

[Asloren1]

All of the above are great points.

I really think you need to lay out all of financials and the timing around money coming in.

There’s really no way a $1.4 million sale where you clear maybe $1.2 is going to be a worse situation than putting money into it to rent, and only for likely 3+ months a year at high rates. As the poster above mentions having $1.2 million now or in the near term give you quite a bit of financial flexibility to fund upcoming college expenses, as well as living expenses for your parents. You will never earn enough in rental to overcome that amount of money in the near term.

[Biggd]

Bad Idea, esp since you are so far away. Your sibling relationship will suffer, better to just sell and each get their share JMHO.

[No Wake Zone]

Your father is a smart man.

[TiltonBB]

Originally Posted by BillTex

How about turning the property into a duplex-then you could use 1/2 for your family and rent 1/2.

Just my opinion but I wouldn't want to share a house with a family that shows up to rent the other side for a week. They are ready to party and you are looking for a peaceful time. They may stay up late and be noisy. The additional issues like who uses the waterfront for swimming and who docks their boat will just complicate things. If you get an obnoxious group renting it will be a long week!

[winterharbor59]

There’s a book about a way to do this, assuming everyone is on board. “Saving the Family Cottage “. It’s been revised several times. Paperback via Amazon. With your evaluation assumed at .m, & a primary home, capital gains would be about $[emoji[emoji6][emoji6]],[emoji[emoji6][emoji6]][emoji[emoji6][emoji6]][emoji[emoji6][emoji6]] if sold before your parents’ deaths. If sold after their death you get a stepped up basis. Living expenses in Boston area will not be cheap, especially assuming some period of long term care.


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[Garcia]

I get the idea and desire. I just don't see how the numbers add up.The only way it works, in my humble opinion, is either one sibling buys out the others or all three create an entity and own it together, spelling out rights, responsibilities, and the cash your parents pull out to fund their future expenses.

Your problem is not unique. Sadly, I have seen the siblings of two families near me stop talking to each other because of different trains of thought regarding the family property.

My advice, for what it's worth. Sit down as a family and have the uncomfortable conversation about what happens to the estate upon death. Take steps now to minimize tax consequences and maximize the wishes of future generations. My family is completing the process now - and the process has pulled us closer together.

[garysanfran]

If you are in a high income tax bracket, there are tax savings benefits in owning a rental.

If you know someone who has an HP 12-C calculator. Take some time and do a thorough analysis.

My siblings could not afford a partnership in our family home. I was in a position to buy it and I rented it for a few years with great success. The tenants were always great. The financial benefits were good. The appreciation was phenomenal, especially during COVID.

If the home is sold, would you get a portion of those proceeds from the sale? Could that portion be used by you as a credit toward the purchase price?

All your expenses... travel, supplies, repairs, maintenance, hotel rental are all tax deductible.

The mortgage on $1,4000,000 @ 5.75% for 30 yrs. = $8,170.02/month.

A 20% down payment reduces it to $6,536.02/month.

I know, all too well, the emotional attachment to your home.

I have four siblings I had to deal with. For me, it worked out well.

[TomC]

Are you considering long term, weekly, or short term (nightly) rentals? For 15 years I rented a lakeside cabin that I owned on the north part of the lake. Here are some of the things that ultimately led me to sell it: At first it was great fun and I developed many friendships with repeat renters. I used VRBO to find guests and for the first several years I never had a vacancy and my plan was working. The overwhelming number of guests I had during this decade and a half were respectful of the property, and in many cases left the place better than the housekeeper left it when they checked in. But every once in a while, someone would disrespect the property and cause damage that I had to repair. Occasionally unauthorized over-occupancy was also a problem at a place with a marginal-at-best septic system. As time went on VRBO began to conceal the name and emails of the guests and forced me to correspond through them. Eventually they demanded to collect the money from renters and paid me on their timetable. Towards the end, short term guests would expect one or two night stays (airBNB model) which made it very difficult for me as I used the weekend for yard maintenance, repairs, and clean up. Finally, it became evident that the town and the association really didn't want short-term rentals (for a night or two) and as you are aware from other threads on the forum, ordinances began to be discussed to restrict use of properties in that manner. I decided to sell and take the proceeds and put them into my primary residence. The cabin was always intended to be a retirement home on the lake, and I finally made a different choice for that since it ultimately did not work out. Just some points to consider and good luck whichever way you want to go!

[garysanfran]

Tom C makes some very valid points.

I never went through a VRBO agency. I used a local management company. If there were any reported problems with unauthorized occupants, the agency would go out and have them removed...I never had a need for them to do this.

Towns doing away with shot-term rentals is a new consideration I did not have then.

The rental agency I used in Meredith for years, went out-of-business because of new short-term restrictions.

The restrictions on short-term rentals is going to affect the historic economic paradigm of all businesses that depend on vacation renters. Hotels will benefit. All other businesses will suffer.

[LIforrelaxin]

As many have stated, this can cause a strain on family relations. My parents have passed, my sister and I own the camp, they bought and we are at a juncture we we are trying to decide how to proceed. The problem is we have different views, and different financial situations.....I have proffered the idea of investing money into the property to make it more rental friendly... Updated dock, some landscaping .... it has met some level of resistance....

In the end I know what it will take to get the place rentable, to fetch good money and give us a positive return.... if it was just me it is a no brainer... but it is not....so I have made myself really think things through....

- When My parents bought the taxes where affordable, since they bought the taxes have about tripled
- The Value of the property has gone up astronomically since the place was bought
- The area continues to evolve, and grow and it is simply not the same as when I first stared coming to the lake or even from when my parents bought.
- While I want to be able to pass something like a lake house onto my kids, does it have to be this particular one? Does it even need to be a lake house?
- Do my kids enjoy the lake they way I did or do their interests lie elsewhere?

As I have analyzed the situation now for a few years, I have been able to come to some conclusions:
- While it breaks my heart to think about selling the camp, I realize there is a financial gain to doing so that will allow me to invest in something that is not my parents dream for their family... but rather in a dream that will be for Me and my family.
- Selling the camp and ending the joint ownership will end the stress it causes between my sibling and I

At the end of the day, its about compromise and not rushing into anything that leads us to the right decisions......

I recommend an open dialog with your siblings and parents about what you a considering, and discussing it as a family.... going to far down the road, will only lead to stress, as you fill everyone else in on "your" plan, that they may or may not be inline with.

[MeredithMan]

A difficult situation for sure. While you can certainly lay out different options for your parents to consider, ultimately, it is THEIR house and THEIR decision. And while using the proceeds of the sale to fund the grandkids' education and helping the less-well-off in the family is noble and kind, I can see where that course of action in-and-of-itself may cause heartburn within the family.

Not to add complexity to your situation, but have your parents thought of how they will fund long-term care, (e.g., Assisted Living)? As I've witnessed with my own parents and in laws, they were all healthy, active, and vibrant at 80, but by the time the mid 80's came along, things went down hill fast, ("Nothing good happens after 80", was my father's go-to-line). My in-laws went into an assisted living apartment at 86, with around $1.3M invested to fund assisted living. They are now both 92+ and just about out of money, and will be soon going to different Medicaid nursing homes. Assisted Living started out at $14K/mo for the two of them and is now over $20K/mo. The point of mentioning this is that prior to giving their money to the grandkids' education and less well off family members, they need to put their own interests first, as it is their money, after all.

This is a tough one to navigate for sure.

[Major]

I have an 81 year old father. I have two brothers. I cannot imagine any universe in which me or my brothers would tell our dad what to do with HIS property/money. Instead of worrying about material things, value the limited time that you have with your dad. If he asks for your advice, that's one thing, but to approach him unsolicited with your dream in my opinion is inappropriate.

I do not mean to come off too harsh. I am sure you are a nice guy. I guess my value system is calibrated a little bit differently from yours.

[retired]

Talk to a NH lawyer about your Dad putting the property in trust for future generations.

[John Mercier]

If he places it in "trust". How are they going to get the money out of it to finance the other items?

[FlyingScot]

Separate from the big decision of whether to sell or hold--your family is better off if Dad leaves you the house. If he sells, he has to pay 24% of the value in capital gains, If you sell soon after death, cap gains is zero

[John Mercier]

Depending on the sale price, with a basis of $330,000 and a $500,000 exclusion... minus whatever upgrades were done and can be accounted for... probably a lot less the focus.

Funding housing after the sale may be the biggest question.
A million looks like a lot, but conservatively focusing on income, it isn't going to go that far.

[Descant]

Lots of unknowns here and some good answers/suggestions. For me, the initial question is, do your parents need the funds for themselves first? A "Continuing Care Retirement Community" (CCRC) can cost $750K as a buy in and $9-10K/month for utilities, food, care plan etc. More if you're close to Boston, less if you go to Taylor Community in Wolfeboro. There are different plans, but many give you back 90% of you buy in when you leave. Use that for bequests.

More and more, young people are learning that they don't need a four year college degree, or that there are alternative payment plans. Instead of "helping pay for education" I suggest your parents consider letting the young ones borrow college funds and when they graduate, give them a lump sum. They can pay off the loans or have a down payment for a house or start a business.

Other missing info: What's the long term plan for the camp? Are you going to be an absentee landlord forever? I don't see anyplace where you will retire in 5-10 years and move to NH. We do hear of lots of people moving out of NYC and moving to TN, FL, NH, etc. Same with MA.)

From the other side of this, if you can hang onto the camp and afford it later, your parents can give no greater gift to the next generation than a place on Lake Winnipesaukee. For us, it is a stable point that we all (three generations, five families) come back to as family focal point no matter where we have lived as our lives progressed.

[retired]

Originally Posted by John Mercier

If he places it in "trust". How are they going to get the money out of it to finance the other items?

That's what lawyers are for.

[DesertDweller]

Just my opinion and I am making a lot of assumptions based on what you have said, but likely the only way to keep everyone happy in this situation is for you to buy the house. You would then be dependent upon rentals to cover the mortgage, property taxes, insurance, utilities, repairs, maintenance, etc. which they likely won't do. Yes, from a tax perspective you can deduct all of the expenses including depreciating the property but the cash flow is what it is and you would need to fund any shortfalls. The economic benefit of owning it is the potential increase in the value of the property but that's likely going to take some out of pocket cash to experience. Not trying to be Johnny Raincloud but that's the reality of the situation (as I see it).

My parents had a house on the New Jersey coast and we dealt with the same issue. My sister wanted to keep it in the family but there was no way the rents would cover costs so it ended up being sold. Unfortunately it's the reality of owning a home in a seasonal/tourist location. If you have owned it for a while their is likely no problem in covering the costs but if you bought it recently it likely will not.

At the end of the day, my advice is to talk to a property manager and figure out what you could rent it for and then compare it to the costs to maintain the house now plus the cost of adding on a big mortgage. If you can afford any shortfall go for it. If not, then let it be. Not worth bankrupting yourself.

[Winilyme]

Originally Posted by Major

I have an 81 year old father. I have two brothers. I cannot imagine any universe in which me or my brothers would tell our dad what to do with HIS property/money. Instead of worrying about material things, value the limited time that you have with your dad. If he asks for your advice, that's one thing, but to approach him unsolicited with your dream in my opinion is inappropriate.

I do not mean to come off too harsh. I am sure you are a nice guy. I guess my value system is calibrated a little bit differently from yours.

Agree...but there is at least one other universe.

If one's father is showing signs of mental decline (and mother is also ill-equipped) then it's likely he'll be unable to process the complex logic needed to make important financial decisions, much less pay simple bills. If you don't get involved early by recruiting trusted and professional resources to assist, then you risk opening the door to criminals that prey on the elderly - and the end result won't be pretty.

I speak from experience. Our Dad (who has since died) was diagnosed with dementia and, over time, became more and more unable to attend to his financial matters. Us 'kids' interjected, working together to come up with solutions via consultation with legal/medical resources. Thing is, we didn't act soon enough and, as we learned after digging into ('unraveling may be a better word') his finances, our Dad was victimized and lost hundreds of thousands of dollars. We so regret not inserting ourselves at the earliest signs of his decline.

[Descant]

Originally Posted by John Mercier

If he places it in "trust". How are they going to get the money out of it to finance the other items?

You need some funding to pay taxes and other bills. A camp worth $1.4MM is great collateral to borrow cash Or family members can contribute to set up an endowment. You can borrow at 6-8%, and an S & P 500 Index fund will earn 8-12%. Taxes, and perhaps some expenses, are deductible against the investment income. Write checks.

[BillTex]

Originally Posted by TiltonBB

Just my opinion but I wouldn't want to share a house with a family that shows up to rent the other side for a week. They are ready to party and you are looking for a peaceful time. They may stay up late and be noisy. The additional issues like who uses the waterfront for swimming and who docks their boat will just complicate things. If you get an obnoxious group renting it will be a long week!

I agree, it’s not something I would do.
But it is typical.
Many VRBO’s state “owner on site”.
The client is renting a bunk house, garage apartment, duplex…

Just a suggestion that gives the OP another option.

[John Mercier]

Originally Posted by Descant

You need some funding to pay taxes and other bills. A camp worth $1.4MM is great collateral to borrow cash Or family members can contribute to set up an endowment. You can borrow at 6-8%, and an S & P 500 Index fund will earn 8-12%. Taxes, and perhaps some expenses, are deductible against the investment income. Write checks.

And to pay for the apartment in Boston along with funding the college funds?

The spread between the mortgage and S&P at best on your thesis is 6% before taxes, and doesn't really seem to take into account the inconsistency of the S&P returns on real world experience. A more conservative portfolio designed to produce a more consistent return is going to be less.

[Descant]

Originally Posted by John Mercier

And to pay for the apartment in Boston along with funding the college funds?

The spread between the mortgage and S&P at best on your thesis is 6% before taxes, and doesn't really seem to take into account the inconsistency of the S&P returns on real world experience. A more conservative portfolio designed to produce a more consistent return is going to be less.

Sure, a portfolio needs diversification beyond this forum. But if you're portfolio return is less, your taxes are less. And, if you move to Boston, your taxes will be significantly higher. You're missing the timeline. The oldest grandchild won't graduate for at least nine years (grandparents then will be age 90) There is no intent to pay anything for college expenses until after both parents die and get back the investment in a condo or CCRC. Then the trust gives a lump sum for student loans or whatever is best at that time. Even more time for investment growth for the younger grandchildren. Google S&P 500 performance: up 68% over the last five years, including significant drops in the last week or so. Nasdaq is up 66%. There are cheap ETF's that come close to this, and not diminished by paying somebody 1%-2% to tell you to buy and hold.

[BrownstoneNorth]

Originally Posted by Major

I have an 81 year old father. I have two brothers. I cannot imagine any universe in which me or my brothers would tell our dad what to do with HIS property/money. Instead of worrying about material things, value the limited time that you have with your dad. If he asks for your advice, that's one thing, but to approach him unsolicited with your dream in my opinion is inappropriate.

I do not mean to come off too harsh. I am sure you are a nice guy. I guess my value system is calibrated a little bit differently from yours.

Because of THIS. I too appreciate the OP’s desire to keep the family home in the family, but after ruminating about the situation for SIX years without doing any research on the complexities or mentioning it to the parties of the first part — his parents….

Advice Wanted - Sell the Lakefront House or Keep it in the Family?

https://www.winnipesaukee.com/forums...ad.php?t=26162

[Major]

I guess I assumed the OP's parents were of sound mind and capable of making their own decisions. What got me sidewise is that the OP's parents already expressed what they wanted to do with the house. Sell it and create a fund to send grandchildren to college. If I were in the OP's position, that would be the end of the story. The dream would have ended.

We did it ourselves without having to rely on gifts from family members or worrying about inheritances. Much more satisfying IMHO. I understand if you are gifted a second home the difficulty to making it work, given the expenses. However, as originally stated, I would never approach my dad (my mom passed away a few years ago) expressing my views about his finances or what he should do with his money and property. I am owed nothing. If anything, I should be paying him for being such a great parent.

[John Mercier]

Google S&P total return between 2000 and 2009.

The 6-8% mortgage would still equate to a pre-tax guaranteed investment return of 6-8%. Not that easy to find.

[Descant]

Originally Posted by Major

I guess I assumed the OP's parents were of sound mind and capable of making their own decisions. What got me sidewise is that the OP's parents already expressed what they wanted to do with the house. Sell it and create a fund to send grandchildren to college. If I were in the OP's position, that would be the end of the story. The dream would have ended.

We did it ourselves without having to rely on gifts from family members or worrying about inheritances. Much more satisfying IMHO. I understand if you are gifted a second home the difficulty to making it work, given the expenses. However, as originally stated, I would never approach my dad (my mom passed away a few years ago) expressing my views about his finances or what he should do with his money and property. I am owed nothing. If anything, I should be paying him for being such a great parent.

Understood, but I've also heard stories where somebody gave/sold something because "We never knew you wanted it". As noted above, discussion is important.

[tummyman]

Pay attention to post #13....the book....Saving the family Cottage is a MUST READ for all....we ran into many of the issues first hand. Winterharbor59 was spot on in their advice. BTW, let your parent do what they want and forget the rental idea. It will ruin your family in my humble opinion. Family matters can get messed up very fast and there will be losers. Not worth it. Move on...... or find the money to buy it yourself if you want it that bad. Don't put that on your parents.

[BillTex]

Your Parents purchased the cabin for a reason…likely the same reasons you would like to keep it in the family.
If all your siblings are on board, you should have a conversation with your Dad.

“Dad, we have so many memories of the lake house, is there a way we can keep it in the family…”

He may be very pleased that you all have the same affinity for the camp. Money “ain’t everything. Have the conversation.

[Biggd]

A wise old Uncle gave me sound financial advice many years ago, "partners are for dancing".

[Major]

Originally Posted by Biggd

A wise old Uncle gave me sound financial advice many years ago, "partners are for dancing".

That's a good one. Dave Ramsey is fond of saying "The only ship that won't sail is a partnership!"

[SAMIAM]

Your dad is a kind and generous man but I just don’t think the money is there for all he wants to do. College tuition, even at a public college would be 80K for 4 years…..3 times that in a private school. A new apartment, living, medical and possible long term care expenses would be significant. I don’t see how there is any money to help less fortunate family members.
I don’t know if he has another source of retirement income but 1.2 million is really not a lot in this day and age. Anyone who has grown up on the lake understands your desire to keep the home in the family but I just don’t think it’s doable

[joec]

I have been in your position a couple of times with my parents regarding real estate they owned and had plans for. Regardless of how many times I tried to convince them to take certain actions that would benefit them and my siblings, those discussions only led to hard feelings. Parents don't like it when there children try to advise them and the older they get, the more they dig their heels in.

I know how sad and hard it can be to see a place where you grew up or spent a lot of time not be in the family anymore but many times that's the way it goes.

Dealing with assets that are shared with siblings can be a nightmare as it was with me and as much as I did not want to let things go, when I eventually had to, it was a relief.

Those are the emotional things to deal with.

On the financial side, the plans your father has will result in large expenses spent in a relatively short time. It is unlikely your rental income, minus taxes, insurance, maintenance, and management fees will provide the money you need to fulfill your obligations to the rest of your family.

I am repeating much of what has already been said, but this subject is something I am still dealing with many years after the fact and I felt I had to chime in.

I wish you the best in your decision either way you go.

[Descant]

A slightly different approach: If you grew up on the lake and REALLY want to be there again:
Sell whatever you have in NYC and follow the THOUSANDS of folks who are leaving New York (and Massachusetts) and moving to low cost states. At the extreme, you could live in the same house as a caretaker and utilize a new program that will pay family members to be caretakers. You said you don't have the financial resources to buy the house, so we know you're not making big big money in NYC. Why do you want to stay in NYC and do all the long distance management that is expected to fail? If the house needs upgrading and you're living there, Dad could pay you to do the work and complete actual payment when the house is sold (to you and others if interested). You can put a mechanic's lien on the property for work and management services.

"Near Boston" is not cheap. Have your father go on Realtor.com and find a few apartments and let him work out a budget.
When we transferred our camp into a realty trust, we had five shareholders. part of the reasoning for that was so the camp could be "gifted" to the trust over a relatively short time period and there was no tax impact on anybody. In essence, the camp went to me and my sister since the other three shareholders were little kids.

I apologize if this sounds harsh, but we just don't know a lot about important considerations.

At age 80 many financial advisors would suggest a majority of Dad's portfolio should be in fixed income assets, mostly paying 3-4%. He could give you an interest only loan to generate income while he lives near Boston.

Boston and NYC seem to be big unknowns in all these plans. Most people when they retire look for cheaper places to live.

[Juiced06GTO]

I was about to type up the same reply I did 6 years ago on the last thread haha!

Still living the same dream now that we were back then, but taxes have gone up, property value has gone up, deferred maintenance costs have gone up, the investment account has gone down.

My aunt was recently notified that the insurance co is dropping our coverage unless we take on a long list of repairs and tree removal. She is asking me to do the work because the money in the investment account is getting eaten up for taxes. I already do the dock in and out every year, and spend most of the one week I spend there with my family working on the place to keep it from going too far backwards.

My sister's family and her friends use the place as if they own it, but don't do any of the work to keep up with it. My aunt and uncle are 75 and 80 now and none of their kids (my cousins) are local to use it.

As much as the memories I have of the place are important to me and the new memories I have made with my kids there, the added stress and resentment built up between the family is a lot to deal with.

I floated the idea of buying it from the trust, but my aunt is expecting close to a million dollars for it (tax assessed at about $800K, most of the value is in the 200' of waterfront, the building is valued at 90k for taxes anyhow) and, with all the work that needs to be done, I don't believe it is worth that kind of money.

As unfortunate as it is, selling it and investing the proceeds may be the better path to getting your own place on a lake. Especially if your parents already wish to sell the place. You could buy some time to utilize the place, but inevitably there will be issues down the road, granted all our issues are coming to a head now, roughly 25 years after my grandparents passed.

[Descant]

Juiuced06GTO
If there is no mortgage or small, you could take our a HELOC, use some of the funds to do repairs and some for cash flow, at least until your Aunt and Uncle are done. Maybe at that point your sister will be able to participate more fully? It seems like market values continue to increase, so the repairs will likely add more to value than the actual cost.

I know of one case where the camp was sold, but with delayed possession. The buyer used it for two weeks every year and the seller stayed in place the rest of the season. After a set time, the buyer moved in and the seller was allowed some limited use.
Anybody out there use a reverse mortgage in a case like this?

[winterharbor59]

Originally Posted by Juiced06GTO

I was about to type up the same reply I did 6 years ago on the last thread haha!

My aunt was recently notified that the insurance co is dropping our coverage unless we take on a long list of repairs and tree removal.

I’ve never heard of an insurance company demanding repairs, or taking that close of a look. Unless you’ve had claims & they came out to the house? Is this typical? We’ve never had a claim but insurance hasn’t come out to look at it. I read the fine print & there is nothing like that in the documents.


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[DesertDweller]

Roof repairs are the big one right now. Essentially anything over 20 years old makes them really nervous. Doesn't surprise me about trees that are close to to the house. My father-in-law's house policy specifically excludes any damage to the house originated from his roof as he refused to replace it.

[John Mercier]

Originally Posted by winterharbor59

I’ve never heard of an insurance company demanding repairs, or taking that close of a look. Unless you’ve had claims & they came out to the house? Is this typical? We’ve never had a claim but insurance hasn’t come out to look at it. I read the fine print & there is nothing like that in the documents.


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I have a 50 year metal roof, professionally done, have cut down any tree that I can that could possibly even come close to structures, and I get contacted every so many years to verify that it is still in good shape.

[LIforrelaxin]

Originally Posted by Juiced06GTO

My aunt was recently notified that the insurance co is dropping our coverage unless we take on a long list of repairs and tree removal.

Unfortunately this is becoming more common. I am dealing with the same thing right now.... And depending on who is involved, it can be a pain in the well never mind....

In my case they decided the sticking point currently is going to be some soffit work that needs to be done (painting)..... I was able to make their other concerns non issues after a few emails back and forth... but some dirt, not even pealing paint is giving them fits.

The problem as I see it is there are to many frivolous claims being put in, and so insurance companies look for excuses to limit or deny coverage. One of the discussions I had to go back and forth with them one, was plumbing... which they thought should be in an insulated space... I told them that I could do that, but it wouldn't do any good as there is no permanent heating in a seasonal camp... Then they asked if I used a professional to winterize the plumbing system... That conversation stopped when I told them, no that I had been winterizing the camp for 30 years, and designed the system to be blown out with compressed air. There concern over freezing pipes was valid, but they didn't consider that the structure was seasonal....

I am sure sooner or later, we aren't going to be able to get insurance with out paying a premium because it is only a seasonal structure....

[Mr. V]

No way to accomplish your goal.

Sell it.

[FlyingScot]

Originally Posted by winterharbor59

I’ve never heard of an insurance company demanding repairs, or taking that close of a look. Unless you’ve had claims & they came out to the house? Is this typical? We’ve never had a claim but insurance hasn’t come out to look at it. I read the fine print & there is nothing like that in the documents.


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I'm not casting aspersions here, but there was an article in the NY Times recently on how people with low credit scores pay much more for home insurance than high credit score people in otherwise identical situations. Apparently insurance companies are using lifestyle or other personal metrics outside of home value, zip code, and other obvious data.

[Juiced06GTO]

They actually came out to the property in late March/early april of last year and took photos of everything. I am not sure if they notified anyone that they were coming, my aunt is the executor for the trust and is the contact for all of this, although at 75 it may be time to pass that on...

They sent her a 29 page report on the property with everything they want addressed or they said they would not underwrite the property. The kicker is they made accusations in the report of not maintaining the property and used a picture of the leaves piled up against the front door. We hadn't been up there to even open the place yet so, yes the leaves were still there from the fall/winter.

I am trying to get looped into all of this now so I can handle it, but again this a ton of time and effort for a place that I get to use for 1 week and maybe a weekend each summer....

[TheTimeTraveler]

Originally Posted by winterharbor59

I’ve never heard of an insurance company demanding repairs, or taking that close of a look. Unless you’ve had claims & they came out to the house? Is this typical? We’ve never had a claim but insurance hasn’t come out to look at it. I read the fine print & there is nothing like that in the documents.


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They don't need to make an in person visit. I have heard it is now very common for Insurance Companies to use drones to take detailed photos of roofs as well as to determine how close that potentially troublesome trees may be located to the home.

We live in a whole new world these days!

[tis]

The insurance companies have gotten pretty picky in past years. Limited companies want to insure expensive house yet they want houses in perfect shape. The tree thing is interesting too, given that the state doesn't want you to cut any trees near the lake.

[sky's]

Originally Posted by thinkxingu

Other than the complexity of your plan vs. selling outright, there are two other concerns I'd have:

1. Putting YOUR money into a family endeavor. That complicates the finances in terms of ROI distribution, ownership, etc. (beyond the initial complications you already address).

2. The reality of making the level of money your father is looking to make via renting. I'm not sure what a three-bedroom home on the lake would rent for, but it would only fetch "premium" rates for a couple months a year, and the rest of the year—the coldest/most energy demanding—would be empty or much less lucrative. After subtracting taxes, maintenance, repairs, cleaning, and management fees, the money just might not be there. I mean, a single replacement roof could possibly wipe out a year's rental profits, right?

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I'll be very honest and above all transparent. as a contractor up here for 25 years I wouldn't touch your project. and I'll tell you why. when the family gets involved there's so many different opinions, attitudes and the way things need to be done or better known as EGO. I'm sorry I realize how this sounds but its spot on. you'll find a younger person that is still learning but an experienced individual won't get involved. I wish you all the luck in the world. it's a shame what's has happened up here enjoy your family camp for what it was intended for Family. sorry to be harsh but I have seen these scenarios and have walked away from every one of them. best

[FlyingScot]

Originally Posted by sky's

it's a shame what's has happened up here enjoy your family camp for what it was intended for Family.

It is. This whole thing is a great example of how rising real estate values do not benefit anyone except professional investors and realtors.

True that civilians (pretty much all of us on the forum) end up with more money at sale--but are we really any better off? If you're not too damn old to enjoy it, you just have to spend it on your next house.

In this case--if the property was worth $100K instead of $1MM, the OP could cajole his siblings into keeping it for family. But when real money has been made, most people want or need the cash. So while the family is better off financially, they have lost something priceless

[Biggd]

Originally Posted by TheTimeTraveler

They don't need to make an in person visit. I have heard it is now very common for Insurance Companies to use drones to take detailed photos of roofs as well as to determine how close that potentially troublesome trees may be located to the home.

We live in a whole new world these days!

They also use google earth. I had roof estimates given to me with views from google earth.

[Garcia]

Originally Posted by FlyingScot

It is. This whole thing is a great example of how rising real estate values do not benefit anyone except professional investors and realtors.

True that civilians (pretty much all of us on the forum) end up with more money at sale--but are we really any better off? If you're not too damn old to enjoy it, you just have to spend it on your next house.

In this case--if the property was worth $100K instead of $1MM, the OP could cajole his siblings into keeping it for family. But when real money has been made, most people want or need the cash. So while the family is better off financially, they have lost something priceless

For tax purposes, houses are worth very little - my experience it is common for people to complain about the assessed value. When it's time to sell, it's worth a fortune.

50 years ago lots near me were bought by middle class people who built camps. 30 years ago camps were on the market for under $120,000, a few below $100,000. Today houses on Bear for under $700,000 are not too common. The temptation to cash out is a big one.

[Denny Crane]

Last year my insurance company walked my property without telling me and had concerns of trees around the property that could fall on the house, threatened to cancel my insurance if not removed. Do you think they could meet me or tell me which trees or mark them? No! I had to guess which ones, cost me close to 6K and emailed them pictures of the stumps. Zero follow up from them so I guess I picked the right ones.

[John Mercier]

Originally Posted by Garcia

For tax purposes, houses are worth very little - my experience it is common for people to complain about the assessed value. When it's time to sell, it's worth a fortune.

50 years ago lots near me were bought by middle class people who built camps. 30 years ago camps were on the market for under $120,000, a few below $100,000. Today houses on Bear for under $700,000 are not too common. The temptation to cash out is a big one.

Still mostly the Middle Class.

[tis]

Originally Posted by John Mercier

Still mostly the Middle Class.

50 years ago middle class could not afford the lake. Maybe they could 100 years ago when it was the "pond" and not much more than a place for the cows to get a drink of water.

[Biggd]

Originally Posted by tis

50 years ago middle class could not afford the lake. Maybe they could 100 years ago when it was the "pond" and not much more than a place for the cows to get a drink of water.

I bought a place on Winni in Alton Bay 50 years ago for 60K and I didn't even consider myself middle class back then.

[John Mercier]

We afforded it in the 90s.
And I wasn't making any killer money, nor did I have a significant portfolio.

[Descant]

I've been absent for a bit so some responses without quoting the posts.
Credit rating. Insurance companies know, whether car or home, that people with low credit scores have more claims and smaller deductibles which are expensive to administer. Same applies in a recession.

Pictures: In the latter part of my career in insurance sales, I had to take a picture . Same with certain breeds of dogs. If it was out of state, a contractor took pictures. Not a company employee, so s/he couldn't speak for the company, and wanted to spend as little time as possible on each site, not chat with the homeowner.

Reading the policy: There are 3-4 parts to a policy. What's covered, what's excluded, conditions and endorsements. Inter-related, but not in a way that's easy to read. That's why insurance employees are licensed and pass routine, repeated, tests.

Is real estate an investment? To me, only a little bit. It's very difficult to make money if you only have one single family property. Even harder if it is seasonal. However, taxes, interest, management fees, etc. are all deductible. Along with depreciation, you can shelter a good part of other income. You can deduct travel expenses to inspect and work with your manger, etc. This could be in nearby Laconia, St. Thomas or St Augustine, within IRS limits.
At this point you have to be operating a business, not just keeping the family camp, in the operating methodology.

Family Camp Investment Fund: If an older generation established this and it has a lot of CD's or other fixed income "to be safe" you're losing money from the start as you just barely keep up with inflation. Instead of a 10 year horizon for retirement, think of a 50 year horizon for two generations beyond yourself. If you have no knowledge/experience, you can do index ETF's at very low cost with Vanguard, Fidelity or Schwab. A fee based CFP can help but be cautious with an advisor who charges a percent based on the size of the portfolio.

[Mr. V]

Originally Posted by FlyingScot

It is. This whole thing is a great example of how rising real estate values do not benefit anyone except professional investors and realtors.

True that civilians (pretty much all of us on the forum) end up with more money at sale--but are we really any better off? If you're not too damn old to enjoy it, you just have to spend it on your next house.

Yes, this is true IF you plan to stay in the same area after the sale.

BUT...you do have a viable option to maximize your return: do what hordes of Californians have done.

Due to inflated real estate prices in LA, SF etc. many Californians sold for a lot of money and then moved north to Oregon and Washington where land and homes were much cheaper: lots of McMansions on five acres fueled by these jokers.

The point: take the money and run to an area with more bang for the buck.

Ah, but then you'd be away from the lakes region, and for many that is a non-starter.

[Garcia]

We can split hairs about what constitutes middle class. How about this - over the past 30 years, the average value of lakefront property has increased much faster than average income over the same time period.

This made property more affordable for a larger segment of the population 30 years ago.

[John Mercier]

Originally Posted by Garcia

We can split hairs about what constitutes middle class. How about this - over the past 30 years, the average value of lakefront property has increased much faster than average income over the same time period.

This made property more affordable for a larger segment of the population 30 years ago.

All properties have.
They keep long term charts of home prices relative to median incomes.
That is done nationally as well as State and in some cases metro.

Nationally, 50 years ago... the ratio was 3.8; just before the crash they peaked at 6.78. After covid, they peaked again at 7.12 and last data point that I saw was the end of last year at 7.12

But even all that fails to recognize the significant upgrades from years gone by; or the changing face of tourism.

[Biggd]

Originally Posted by Garcia

We can split hairs about what constitutes middle class. How about this - over the past 30 years, the average value of lakefront property has increased much faster than average income over the same time period.

This made property more affordable for a larger segment of the population 30 years ago.

I think Covid really supercharged the housing market. Before Covid I think middle-class could still afford a first home, maybe not a second home. 2 of my 3 children bought before Covid and traded up to bigger and better homes. Now they both have million-dollar homes with sub 3% mortgages. My oldest who never bought, continues to pay rent even though she could have afforded a home before Covid. She just was never confident enough to pull the trigger!

[garysanfran]

The good news is...You're a millionaire.

The bad news is...So's everyone else!

An acquaintance of mine wanted to know why the wealthy USA Government doesn't gift every citizen a million dollars so no one would have to work anymore.

Support increased education!!! It remains severally lacking.

[BillTex]

Originally Posted by garysanfran

Support increased education!!! It remains severally lacking.

Case in point.

[John Mercier]

Originally Posted by Biggd

I think Covid really supercharged the housing market. Before Covid I think middle-class could still afford a first home, maybe not a second home. 2 of my 3 children bought before Covid and traded up to bigger and better homes. Now they both have million-dollar homes with sub 3% mortgages. My oldest who never bought, continues to pay rent even though she could have afforded a home before Covid. She just was never confident enough to pull the trigger!

It works out in the end.
If the workers needed in the area have to make more to afford housing, prices will just have to rise to offset the cost of that labor.

https://www.longtermtrends.com/home-...-income-ratio/

Covid coincided with Boomers retiring, so adding remote work in spurred demand.
We created an imbalance, and economics will correct it - sometimes slowly, sometimes quickly.

[Biggd]

Originally Posted by John Mercier

It works out in the end.
If the workers needed in the area have to make more to afford housing, prices will just have to rise to offset the cost of that labor.

https://www.longtermtrends.com/home-...-income-ratio/

Covid coincided with Boomers retiring, so adding remote work in spurred demand.
We created an imbalance, and economics will correct it - sometimes slowly, sometimes quickly.

In the end, we all die!

[FlyingScot]

Originally Posted by John Mercier

All properties have.
They keep long term charts of home prices relative to median incomes.
That is done nationally as well as State and in some cases metro.

Nationally, 50 years ago... the ratio was 3.8; just before the crash they peaked at 6.78. After covid, they peaked again at 7.12 and last data point that I saw was the end of last year at 7.12

But even all that fails to recognize the significant upgrades from years gone by; or the changing face of tourism.

And this is why a rising tide has not lifted all boats. As people become wealthier they bid up the cost of scarce real estate, which increases costs for all. (Springsteen tix too! Have you seen the latest prices? 4X or so what they were 10 years ago )

[John Mercier]

Home prices relative to median household income were pretty high right after WWII also.
It took a while for developers/builders to catch up to demand.

And the generations before the Greatest were less controlling.

[castlebreakfast]

Thank you. If I may ask, how often does you and/or your family members use your weekly rental in Gilford? What led you to want to set your rental up – financial, emotional/family memories, etc.? Do you find it's been a good investment, and worth it for all the work involved?

Originally Posted by TiltonBB

At best, this would be difficult to do and may strain family relationships.

If it sold for $1.5 million and if after real estate commissions and any capital gains taxes he ended up with $1.2 million that would be $400,000 each to the three of you. If your brothers got the money and put it somewhere safe at 5% that would give them each $20,000 per year.

Do you think you can pay the taxes, insurance, and maintenance, put money aside for reserves, and net enough in rental income after that to pay $40,000 per year to your brothers? Probably not likely. And that amount is only interest with no paydown of the principal. If I was one of your brothers I would say sorry, but no, I would rather have the cash now. There is no gain to them unless they are using the house too, and that would cut into your rental income. If you intend that anyone else in your family use it you would need a plan for who can use it, and when.

When you go to check on the property, where will you stay if it is rented? Do you already have a list of maintenance and cleaning people you can call when you are out of state and a renter calls with an emergency? If it rents by the week, most rentals on the lake have checkout at 10 AM Saturday and the new renter arrives at 3 PM Saturday. That is a short window for cleaning and any minor maintenance.

If it is priced right you can probably count on 8 - 10 weeks of rent in the summer and a much reduced rate in the winter. It will rent better if you have wifi, cable TV, air conditioning, and a gas grill. Someone needs to clean that and keep the propane full. If you have a decent dock, a sandy walk into the water, and good swimming area that will help you to rent it. People do rent in the winter and you can either do short term or one off season tenant. If the house is vacant and not winterized you will need someone to check on it.

I have a summer weekly rental in Gilford and during the off season I get one tenant from September until Memorial Day. The winter rate for one month is about 40% of the summer weekly rate for just one week.

[castlebreakfast]

I haven't. I don't think that, collectively, we'd have enough money to make that purchase. My brothers both have kids now and are funneling a lot of their money into raising them. They're both homeowners themselves. However, let's say we did want to do this (buy the place jointly). How would that work? What particular loan, etc., would we want to take out? What would be the key financial steps?

Originally Posted by BillTex

Have you proposed a joint purchase with your siblings?

How about turning the property into a duplex-then you could use 1/2 for your family and rent 1/2.

Good luck with your plans, I understand your desire to keep the home in your family…and that $ isn’t everything.

[castlebreakfast]

Can you tell me more about this 'stepped up basis'? I'm not familiar with the term.

Originally Posted by winterharbor59

There’s a book about a way to do this, assuming everyone is on board. “Saving the Family Cottage “. It’s been revised several times. Paperback via Amazon. With your evaluation assumed at .m, & a primary home, capital gains would be about $[emoji[emoji6][emoji6]],[emoji[emoji6][emoji6]][emoji[emoji6][emoji6]][emoji[emoji6][emoji6]] if sold before your parents’ deaths. If sold after their death you get a stepped up basis. Living expenses in Boston area will not be cheap, especially assuming some period of long term care.


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[castlebreakfast]

Thank you. What is some advice you'd give to minimize tax consequences? Do you think you'll be keeping the estate in the family?

Originally Posted by Garcia

I get the idea and desire. I just don't see how the numbers add up.The only way it works, in my humble opinion, is either one sibling buys out the others or all three create an entity and own it together, spelling out rights, responsibilities, and the cash your parents pull out to fund their future expenses.

Your problem is not unique. Sadly, I have seen the siblings of two families near me stop talking to each other because of different trains of thought regarding the family property.

My advice, for what it's worth. Sit down as a family and have the uncomfortable conversation about what happens to the estate upon death. Take steps now to minimize tax consequences and maximize the wishes of future generations. My family is completing the process now - and the process has pulled us closer together.

[Descant]

I watched an interesting Podcast by Warren Buffett a few days ago: Five mistakes that prevent wealth" or something like that. Buying a new car on credit instead of buying used for cash. I.e. don't borrow to buy something that depreciates. Buying a newer, larger, house every time you get a raise/promotion. Big ones: Credit card debt and "Buy Now, Pay Later", vacations on credit. Oh, and skip the $7.00 Latte on the way to work every day.
For younger homebuyers, save your money and search Realtor.com daily for fixer uppers. Us Boomers will start dying off soon and all those houses will come on the market.

Finally, (my favorite) Join the Navy or National Guard. A paycheck and summer job while you're in college, homebuyer/mortgage benefits and money every month while you do occasional weekend drills. Sign up for something that gives you more adventure and hazardous duty pay. You'll be elite and proud for the rest of your life.

[winterharbor59]

Originally Posted by castlebreakfast

Can you tell me more about this 'stepped up basis'? I'm not familiar with the term.

Re: Stepped up basis.
Any appreciated asset that you own (usually real estate or stocks) & sell is subject to capital gains tax. For most, the tax is 20% of the appreciation. When you die, the inherited asset’s basis is the appraised value at death. ( that’s the stepped up basis)If your heirs sell their basis is the value of the asset at the time of your death. In other words , they get to keep much more of the money. For a long held lake house, the capital gains would be significant, so if financially feasible,it’s advantageous for an elderly couple to hold the property & leave it in their will to their heirs. Best to do a little reading on tax laws before making a decision.


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[winterharbor59]

Question re: minimize tax consequences.

It doesn’t sound as though your parents’ estate would be taxed federally. If your parents die as NH residents there’s no estate tax. If they are Massachusetts residents, the estate tax is significant.


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[John Mercier]

So the parents have to hold the home and be NH residents to acquire both considerations... but it is not what they want.

Should be an interesting conversation.

[Garcia]

Originally Posted by castlebreakfast

Thank you. What is some advice you'd give to minimize tax consequences? Do you think you'll be keeping the estate in the family?

We consulted with a lawyer well versed in estate planning so that we would be able to hold on to the property. It was a long process and required lots of honest conversations with siblings and parents about what we value and want both today and in the future.

[TiltonBB]

Originally Posted by castlebreakfast

Thank you. If I may ask, how often does you and/or your family members use your weekly rental in Gilford? What led you to want to set your rental up – financial, emotional/family memories, etc.? Do you find it's been a good investment, and worth it for all the work involved?

I have owned it since 2004 and almost always used it as a year round rental.
The only exceptions have been a 3 or 4 times when my daughter was in college and brought a large group of friends for a few days. The property also has a boathouse with an apartment over it so during the summer we use that. The rental house has always been used as a rental. I did it for investment purposes and now, because of appreciation and the rental income, it has proven to be a good investment. The problem with appreciation is, you know it is there, but you have to sell the property to get it.

It started out, 22 years ago, renting for a lot less but now with the increased interest since covid, the rent is quite a bit higher and it is mostly full all summer. Because it sleeps 10 the renters are usually families with children, sometimes two families who rent together. The only weeks that are difficult to fill are at the end of August when the kids are going back to school.

[Outdoorsman]

Is this ALL insurance companies?

No one is naming their carrier, but plenty seem to agree

[John Mercier]

I have State Farm.
I understand them charging me for being a higher or lower risk profile; so I don't mind the questions that much.

I realize with the macro economy conditions weakening that they are going to be a bit more subjective.