Buying a Second Home?


Have you thought about buying a second home? Maybe you’ve dreamed of owning a vacation retreat? Like many of you, Mr. Groovy and I have had visions of escaping to our own little wonderland. I’d like to share with you what we have learned as we pursued buying land and building a second home.

Reasons for wanting a second home

Our reasons were pretty simple. We wanted to own a nice piece of land with beautiful views, a scenic destination for vacations and retirement. During our travels to Zion and Bryce National Parks in Utah and the Rocky Mountains in Colorado, we became enchanted with the Western part of the United States. We became determined to buy land out west and build a house.

After months of research on we zeroed in on Montana, where the cost of living is low, land is plentiful, and the price is right. We were looking in the ball bark of 20 acres for $40K. We concentrated on areas outside of Billings and Bozeman and began planning a one-week trip.

Highlights of the Montana Experience

Montana did not disappoint us in the least! Photos truly do not do it justice. With every new discovery, beauty surrounded us. Our fascination with Montana only deepened. Here are some of the highlights of our trip:

  • Mountain ranges and unobstructed views as far as the eye can see
  • Elk and antelope roaming freely.
  • Sitting with the local crowd at a cowboy auction held in a supermarket parking lot in a small fishing village.
  • Exploring old stage coach roads that cut though the gorges between two mountains.
  • Tossing pieces of granola bars out the car window at Prairie Dog State Park and watching the little creatures come scurrying out of the ground.

We also developed a deeper appreciation of our Montana’s history and local flavor:

  • Crossing parts of the Lewis and Clark Trail.
  • Paying our respects at the Custer National Cemetery and the site of the Battle of the Little Big Horn.
  • Standing at the scene of the Smith Mine Disaster, where equipment remnants stand still in time years after a fire burned down the mine.
  • Driving through Yellowstone National Park in Wyoming and stepping up to Old Faithful just in time to catch it erupting, as if on cue.
  • Munching on fry bread, bison burgers, and elk jerky.

Reality Sets In

There was so much to explore in Montana and we hadn’t even scratched the surface. But we were on a mission to buy land and the majority of our days were spent with realtors, viewing properties. Here’s a photo of one particular piece of land we were close to pulling the trigger on, where we envisioned lazy days watching the elk migrating through our stream.


With the passing days spent meeting up with realtors and seeing one property after another, we began to see an emerging pattern. It became clear that there’s a downside to building a home in a rural, mountainous region. Sites were more primitive than we had anticipated. For instance, we found out getting wired for electricity wasn’t going to be easy and we’re not big fans of propane tanks. Or, getting well water might be a problem and we may need to rely instead on trucking water in on a monthly basis.

Then there was the whole concept of building a home from 2,000 miles away and not being present to watch over the progress. Could we handle that without worrying all the time? Would builders take advantage of us or would the plans be followed to specification? Then there was the potential for animal or weather damage while building and upon completion. We would need to hire a caretaker to watch over the property during the long periods it would be unoccupied.

Cost Analysis

Budgeting conservatively we calculated it would cost $300K to buy land and build. Accounting for taxes, insurance, winterization, and hiring someone to keep an eye on things for us could easily add 4-5K to the yearly budget. At this point in time we were not yet FI (financially independent) and were already living in a home requiring work, time, and money to maintain.

Technically we could have swung it. We may have wiped out much of our savings and investments but we could have pulled it off. But just because we CAN do something, doesn’t mean we SHOULD. Who were we kidding? We’re not wealthy. What made us think we were entitled to two homes?

Lessons Learned

One thing we have learned through our journey to FI is that it’s OK to take a step back. We had to ask ourselves what we want from retirement. Is it smart to tie up money in real estate when it’s not a primary home or a rental property earning money for us? Are there better uses for our resources and time? We concluded the decision to move forward would not be wise. We would wind up with an expensive hard asset that remained vacant more often than not, and lots of worries.

The other consideration we hadn’t been accounting for is that we had additional travel interests. We would love spending more time in Montana but we would also enjoy extensive trips to other regions: Ecuador, Asia and Australia outside of the U.S., and other states on our bucket list such as Idaho, the Dakotas and New Mexico. Because we are FI, we have the freedom to pick up and spend time in numerous places. Our choices and our dreams are limitless.

We realized the viable alternative right under our noses (literally, the app is on our cell phones) is Air BnB. Thanks to the sharing economy travel has never been easier. Why buy the whole farm when you can rent the cow? Knowing when to flex the frugal muscle and when to be self-indulgent are important considerations when FI. Do we buy luxury cars just for the hell of it? No, we don’t. Did we learn anything from ditching the expensive cable bill and learning to entertain ourselves with hobbies and other pursuits?

When I think back on the situation now I can’t imagine what possessed us to feel we were in a position to buy a second home. In theory it sounded so right and we got a little swept away. It’s funny how you can get so stoked about an idea that the blinders automatically go on. The $300K we might have spent on that land in Montana could easily fund 30 years worth of trips to all the places we find appealing, and then some.

Being wealthy and maintaining it involves healthy habits. But it also involves clear thinking. I think Mr. Groovy and I were getting a little too big for our britches. But I’m sure glad we were able to put the brakes on.

Speaking of britches, being the frugal wife that I am, I think I’ll just save them to wear while sitting with Mr. Groovy in Montana, watching the sun set from the front porch of a home someone else paid for – thank you very much.

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  1. Just come visit us and you can use our sweet pop up camper! $300k is a lot for second home so far away, as much as I hate to admit that. The abundance of vacation rentals in the Flathead valley offer a lot of choice. I might go with a vacation home here if it were close to home (within an hour) and I could rent it out and break even. Maybe the best of both worlds. =)

    • Mrs. Groovy

      We saw 20 acres of land for sale in the $40K range. We figured with building it would come out close to $300. But we were still thinking of a larger home a few years ago. Another issue we hadn’t accounted for was dealing with certain problems from afar. Our realtor was from the Bozeman area but he had another property near Red Lodge that we stopped by with him. He wanted to check out some damage done by animals to his fence. A neighbor had alerted him. How do we deal with that from another state? Plus our closest neighbor may not be near enough to even know who we are. We’d probably need a caretaker, at least part time.

      Thanks for the offer! We might take you up on it.

  2. As a friend of ours approaches retirement he is strongly considering selling his vacation home. Instead he will look for a place to rent for 2-3 weeks at a time. 2 property taxes, maintenance and upkeep and utility payments for 2 places will take a dent out of his retirement budget.

    • Mrs. Groovy

      Your friend has the right idea, Savvy. That’s how we’ve come to feel – enjoy someone else’s property for an extended stay, but have none of the responsibilities. Thanks for commenting.

      • You could potentially go the timeshare route if you know that you want to go to the same place every single year. There are a lot of buyers remorse with timeshare owners, so you can snap them up second hand pretty cheaply on Ebay. You still get the tax deduction for your portion of property taxes etc since you “own” it, of course you can also rent those same properties that people own but are unable to use. 😀

        • Mrs. Groovy

          Right now we feel we want to check out different areas. But I could see as we get older wanting to return to the same place. Thanks for the tip, TJ. That’s good to know.

  3. I have a thought to buy raw land in a remote area, but only to hold it as part of my portfolio. After working for a landlord, I am not enamored of “improved property,” and all the headaches.

    • Mrs. Groovy

      I hear you on the headaches. Raw land can be a risk too if you don’t know the market well. But we’re definitely not cut out for the landlord/tenant relationship. If we were, I’d probably invest in mobile homes to rent out. They don’t cost much to purchase or maintain. But you need to screen tenants very well. At this point in my life I want my investment returns to be automatic. I don’t want to be chasing anyone down for rent money.

  4. We’ve talked about a home in Florida to get away from the cold winters. The savings in state taxes alone could pay for it if we established residency there. The challenge is that we probably wouldn’t want to be there 6 months + 1 day. With that in mind, we will definitely go the RENTAL route. We’re trying our first AirBNB this March.

    • Mrs. Groovy

      Let us know how your first AirBNB goes! Can’t wait to hear about it.

      My in-laws have FL residency and it’s saved them a bundle on taxes. He’s retired NYPD with a pension. Far be it from me to evade the law, but if you register your car in FL and continue to get bills year round, it’s not that difficult to prove you’re physically there half the year. I don’t like the idea of owning property I don’t live in full time, unless I hire someone to tend to it. My father-in-law frequently gets phone calls from neighbors who are not on the premises, asking for “help” in boarding up their windows when a hurricane is coming. Not fun!