If you could own a second home/property...

justincredible Honorable Admin

37,969 posts 250 reps Joined Nov 2009

Tue, Jun 30, 2020 3:19 PM

I get the desire to own another piece of real estate every now and then. In the past it's been a rental property, but I could never pull the trigger. Given covid and the way society seems to be going, I'm now looking hard into a second property for us to get away to whenever we want. It looks like my job is going to be remote 100% of the time in the near future, and I'm considering negotiating 100% remote forever as we're considering a permanent move to another state or city in the relatively near future.

I'm currently looking at larger properties (5+ acres) with a small house or cabin on it near water. My current search is in Northern Minnesota (Ely, specifically) as I'm familiar with the area and go there every year for my wilderness trip anyway. I'm also considering Michigan since it's closer. But I'm definitely looking for something wooded and private, and not really close to any big or even midsize city if I can help it.

If you could buy a property to "get away" where would it be?

I know S&L said they have a cottage in Indiana a while back. How often do you guys go there?

iclfan2 Reppin' the 330/216/843

9,465 posts 100 reps Joined Nov 2009

Tue, Jun 30, 2020 3:50 PM

There are some big lakes an hourish away from here, or the Mountains of Asheville are 3 hours. I go back and forth on if I'd rather be on a lake with a boat or just away from everything. There is also a private beach an hour away with condos below $200k that always intrigue me.

Laley23 GOAT

33,369 posts 133 reps Joined Nov 2009

Tue, Jun 30, 2020 3:57 PM

I know you like canoeing, and northern Michigan has one of the best rivers for it along with fly fishing East of the Mississippi. We had a place in Grayling that we sold last year (after 33 years in the family) on the Au Sable. About a 6-7 hour drive for you, but that’s still closer than Minnesota. Super cheap real estate up there as well. Tons of great camping and woods everywhere around you.

justincredible Honorable Admin

37,969 posts 250 reps Joined Nov 2009

Tue, Jun 30, 2020 4:00 PM

Thanks for the heads up, I'll check that area out. I like the idea of MN because I go every year anyway, but it's not a place you can go for a long weekend. Instead of going up once a year for a week like I do now, I'd probably spend weeks at a time. So long as I have an internet connection, I'm good.

Fab4Runner Tits McGee

6,997 posts 64 reps Joined Nov 2009

Tue, Jun 30, 2020 4:47 PM

If we ever get a lake house or some other kind of getaway house, I'd want it to be within 2.5-3 hours of where we live. If we can't get there easily and relatively cheaply in order to use it frequently, I just don't see the point.

Spock Senior Member

5,271 posts 9 reps Joined Jul 2013

Tue, Jun 30, 2020 5:27 PM

It would need water and woods for sure

bigorangebuck22 Senior Member

322 posts 6 reps Joined Nov 2009

Tue, Jun 30, 2020 7:27 PM

Either northwest of Seattle so I can go to University of Washington softball games in the spring.

in Tennessee or North Carolina somewhere between I-75 and I-77.

The go big or go home choice: New Zealand.

SportsAndLady Senior Member

39,070 posts 24 reps Joined Nov 2009

Tue, Jun 30, 2020 8:25 PM

I can quote any post on this page, except for Justin’s first one. So pretending this is quoting his post!

It’s my wife’s parents cottage, in between Michigan city IN and New Buffalo MI. Right on the border, across the street from lake shore drive along Lake Michigan. It’s pretty much ours at this point, but not on paper. We go up about once every 3 weekends in the summer. Once every 4-5 weeks in the winter. If it was ours and ours only, we’d go up every weekend. That’s what her parents used to do, but they don’t go as much these days.

It’s so nice. Probably not exactly what you’re looking for, justin, but it’s incredible. And maybe you could find something up your alley more inland.

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 8:34 PM

posted by Fab4Runner
If we ever get a lake house or some other kind of getaway house, I'd want it to be within 2.5-3 hours of where we live. If we can't get there easily and relatively cheaply in order to use it frequently, I just don't see the point.

I suppose it depends on your tolerance for driving, but over 1.5-2 hours will nix a lot of opportunities when you have events that keep you from leaving until the afternoon, or having to be back in the afternoon/early evening for a ball game, party, etc...

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 8:38 PM

The ability to work remotely, or if you travel for work a lot, would probably push me to one of the tax-free states for a primary residence.

It's the traveling for work that could make tax determination of your main residence tricky.

SportsAndLady Senior Member

39,070 posts 24 reps Joined Nov 2009

Tue, Jun 30, 2020 8:47 PM

posted by gut
The ability to work remotely, or if you travel for work a lot, would probably push me to one of the tax-free states for a primary residence.
It's the traveling for work that could make tax determination of your main residence tricky.

Not exactly what you’re saying, but I just learned of a few colleagues of mine that work every week in Chicago, but their primary home is in Florida (no residence in Chicago). They fly every week to and from Chicago for work. The money they save in state taxes is greater than the cost of their weekly flights. Crazy

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 8:59 PM

posted by SportsAndLady
Not exactly what you’re saying, but I just learned of a few colleagues of mine that work every week in Chicago, but their primary home is in Florida (no residence in Chicago). They fly every week to and from Chicago for work. The money they save in state taxes is greater than the cost of their weekly flights. Crazy

I've heard a lot of people do that in NY, too (HUGE tax savings). If you have the money, you get yourself a great place in Chicago or NY, and then a place on the beach in FL. Although I'd probably take a long look at a lakefront property around Nashville.

Those are people averaging about 3 days per week in the office. Going forward that might be more like 2 days every other week. That would definitely be a pretty sweet gig.

Fab4Runner Tits McGee

6,997 posts 64 reps Joined Nov 2009

Tue, Jun 30, 2020 9:05 PM

posted by gut
I suppose it depends on your tolerance for driving, but over 1.5-2 hours will nix a lot of opportunities when you have events that keep you from leaving until the afternoon, or having to be back in the afternoon/early evening for a ball game, party, etc...

Oh, I agree. Ideally I'd want a place closer to 60-90 minutes away, but would go further for the right setup. We don't have kids yet, so it's hard telling what their extracurriculars or other activities will entail.

My husband's grandparents have a lake house about 25 minutes from us and I have a feeling it will eventually be left to his dad, and then to him. It's a nice place, but it's not right on the water and will need some major improvements if we were ever going to really spend time there. They've had it for almost 40 years and it holds a lot of wonderful memories, so it's something to think about.

justincredible Honorable Admin

37,969 posts 250 reps Joined Nov 2009

Tue, Jun 30, 2020 9:27 PM

posted by gut
The ability to work remotely, or if you travel for work a lot, would probably push me to one of the tax-free states for a primary residence.
It's the traveling for work that could make tax determination of your main residence tricky.

How does that work? Say we move to an income tax free state but continue to work remotely with a business based in Ohio. I no longer pay state income tax? I would assume you'd pay tax in the state you work. When I worked in a city that had a lower tax rate than the city of Cincinnati (residence) I still had to pay the difference to the city of Cincinnati. I always assumed it would be the same on the state level.

justincredible Honorable Admin

37,969 posts 250 reps Joined Nov 2009

Tue, Jun 30, 2020 9:31 PM

posted by SportsAndLady
I can quote any post on this page, except for Justin’s first one. So pretending this is quoting his post!

Thanks for the reminder, I forgot to add that functionality to the OP.

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 9:39 PM

posted by justincredible
How does that work? Say we move to an income tax free state but continue to work remotely with a business based in Ohio. I no longer pay state income tax? I would assume you'd pay tax in the state you work. When I worked in a city that had a lower tax rate than the city of Cincinnati (residence) I still had to pay the difference to the city of Cincinnati. I always assumed it would be the same on the state level.

You pay taxes based on where your ass is physically sitting when you do the work. But you'd need to talk to an accountant, because a lot of time how it works is you get a credit in your state. You probably would be fine as long as they don't withhold Ohio taxes, which might then be difficult for you to get a refund.

Tax laws could be changing, too, if states start losing workers. Or even just looking to make-up for all the revenues they lost this year. A few states have questionable "base of operations" determinations that could still ding you for the situation you describe. Technically the people going to NY/IL 3 days a week should be paying tax on 60% of their income to those states.

TL;DR version - normally your primary residence is where you spend the majority of your time (180-185 days). That's where you pay income tax. I said that can get complicated if you're a road warrior and don't have anywhere more than 180 days. I don't know if that's where something like dual residency comes in or not.

SportsAndLady Senior Member

39,070 posts 24 reps Joined Nov 2009

Tue, Jun 30, 2020 9:50 PM

Yeah, your SALT (state and local taxes) is based on where you’re physically working. It’s why people live in a different state than where they work. However be aware that cities are starting to leverage a “commuter” tax to prevent it. Chicago is considering it with people who live in NW Indiana or Wisconsin and travel to Chicago to work.

There is also a non-resident tax that could possibly fuck you. Basically, your resident state will tax you on your income, no matter where it’s “earned”. But you’ll most likely be required to file a state return for the non resident state where you worked. And the non resident tax will depend on that states tax laws.

Verbal Kint Senior Member

1,062 posts 16 reps Joined Jul 2017

Tue, Jun 30, 2020 10:16 PM

Either NW lower Michigan or in between Ashville and the Smoky Mts.

Somewhere temperate for the summer months.

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 10:17 PM

posted by SportsAndLady
There is also a non-resident tax that could possibly fuck you. Basically, your resident state will tax you on your income, no matter where it’s “earned”.

That's sort of what I was referring to with IL. I heard they were taxing consultants on their full income, even if they paid taxes in PA because they had an engagement there. There are a few states that do it, but it's pretty rare (and likely illegal, a.k.a double taxation). Pretty evil, but IL rates are nothing like NY or CA.

SALT is definitely going to get more interesting post Covid-19. Several states, including IL, have also been talking about going after carried interest even if the Feds continue to classify it as capital gains.

Plus, I'm guessing you could deduct your flights to commute. Worse case scenario you could just have the company expense it and then subtract it from your income after-tax.

Justin as a remote employee would probably be fine, so long as they don't withhold OH taxes (which I don't believe they should). They also don't/can't really police it, so he could travel with his wife 3 days to be on campus at UC and then they just declare 60% of HER income in OH (maybe only 2/3 of that if the summer is off). If you want to be super conservative, he could throw 20% of his income into that pile. Definitely something you'd need to model to compare filing jointly and separately.

gut Senior Member

18,369 posts 117 reps Joined Nov 2009

Tue, Jun 30, 2020 10:31 PM

I'll add the caveat I don't know much about OH tax code, and basically nothing about TN.

But if you made $250k a year, after some typical deductions you're probably saving $12k per year. That sounds pretty great, but a lot of states exact their pound of flesh elsewhere.

TN sales & use tax is 7% (vs. 5.75% in OH).

Then you have to look at vehicle/license/registration fees. That can sometimes be hundreds of dollars.

They'll get you on higher real estate taxes, which can be easily another $1-$2k.

And comparable homes might cost more, which means higher interest payments.

The lazy math might make you think you're saving $15k in this example. But reality is it might be more like $6k. It really requires some hardcore analysis.

SportsAndLady Senior Member

39,070 posts 24 reps Joined Nov 2009

Tue, Jun 30, 2020 10:35 PM

^or, just move to IL where ALL of it they fuck you on!

High property taxes, check

High SALT, check

High vehicle/registration/licensing fees, check

High sales tax, check

Tax on sugary drinks, check

Tax on grocery bags at stores, check

Anything to give those teachers pensions a 4% annual inflation increase! 🙄

If you could own a second home/property...

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