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Can You Afford a Country House?

Flickr/TaxBrackets.org

It’s a question I’ve been asking myself, and here’s something that helps me answer it: a Vacation Rental Analysis Sheet (sexy, right?). It’s a downloadable Excel spreadsheet that allows you to plug in all the relevant numbers, from sale amount to estimated rental income, so that you can figure out how much income you might gain, if any, by renting out your vacation home. It has lines for property caretakers, advertising, house cleaners and other regular expenses, but I would add a few lines if I were you:

  • Cost of furnishing a new home (beds, couch, second set of cookware and such)
  • Renovations (even if you’re lucky enough to need little more than a new coat of paint)
  • Monthly fund of moneys put aside in case of major structural breakdowns, like broken boiler or leaky roof
  • Car expenses, for those city dwellers who have not yet invested

Can you guys think of anything else you should add to your monthly expenses to figure out if it makes sense for your wallet? According to my analysis, for a $250,000 house with $50,000 down and renting it out for half the year, my expenses are about 20 percent higher than my income, and comes to about $4,000 a year. That’s pretty good for 36 weeks in the country.

Category: Finances, Second Homes

By: lisa | 2 August 2011 12:51 PM | 9 Comments

9 Responses

  1. Anonymous says:

    Thanks Lisa… but can’t seem to download the spreadsheet

  2. mk says:

    The link is broken. It takes you to a website that is under construction.

  3. priscilla says:

    You also have to figure in the citiot tax. That is the money tacked on to any job you hire out in the country.
    If the locals figure you’re from the city (or in our case Long Island) your estimate goes up.

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  5. Hallie says:

    Hi guys! Priscilla is so right. But I think it’s also worth noting that coming from an apartment, there’s no way to mentally prepare for the energy costs of owning an old home upstate. For example, a typical winter month was $750 for me in Hudson (I have radiator heat with a natural gas boiler). Now, I’m on the budget plan which makes it run about $300 every month. That’s not a cost you can necessarily pass on to a renter. If you are super serious about a given house, call the energy company (or ask the sellers) what a typical winter month looks like financially.

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