Buying a Second Home?

This post may contain affiliate links. Please read our disclosure for more information.

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 realtor.com 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.