I’m writing this deep into a Sunday night. I can’t sleep, and every time I start to nod off I see visions of a sulking Jay Cutler on the sidelines with those two silly dots of blood on his elbow, and I am not calmed. I’m wondering if every tendon in his precious little knee is torn to absolute shreds. If that is the discovery tomorrow, that will be the only way that I will excuse him for his dreadful, uninspired performance. A performance that will stick with me for years and haunt me much in the way that Derek Lee’s Cub career playoff stats dance in my head on particularly dark, lucid evenings. My heart beats with an increased haste at the mere writing of those words. I’ve been struggling with other things lately too, and while I tricked you and never admitted that I snuck off for a few days in Marco Island, I feel I must tell you what else is on my mind.
In the airport the other day, I ran into an old customer of mine at O’Hare. They were happy, which is a strange emotion to be feeling during any tenure inside the bowels of ORD. They were happy because they recently purchased a home in Naples, Florida. They told me that they’re going to be selling their primary home in Illinois and spend their winters in Naples and their summers in Lake Geneva. The wisdom of that living situation is unparalleled, and the execution of such a coup is like a dream that never really ends. When the first said they bought in Florida, I was ready to pounce on them with my CPN ratios and justifications as to why buying in Florida, or Arizona, or any other destination where air travel is a necessity is an egregious waste of money; my blood ran hot with the thought of refuting their purchase. But they calmed me when they said they planned to spend the entire winter there and the entire summer in Lake Geneva. Phew. And I thought they were buying with the idea of visiting throughout the year, which is usually a huge mistake. If you recognize much of the rest of this post, that’s because I am plagiarizing myself, which is perfectly legal.
While there is no other place I’d ever consider calling home, southwest Florida, and Marco Island in particular is a pretty solid option during the month of January. And February. I wouldn’t trade a summer in Lake Geneva for any other zip code, and I certainly wouldn’t want to spend a leaf crunching fall anywhere but along the shores of my beloved lake. I also wouldn’t pass on a Holiday season spent in front of a crackling fire, nor would I want to miss the first snow fall of a young winter. But once the new year arrives, my initial burst of ambition and optimism is usually followed quickly by a strong desire to stand waist deep in the gulf of Mexico with a freshly netted finger mullet swimming seductively beyond the first sand bar. Even Algore and his scientists have now relegated Marco to an island in the middle of a icy 60 degree ocean that makes such a wading expedition an adventure in hypothermia.
While I love Marco, and have owned real estate there, I find rather severe limitations on such ownership. On many different occasions, I have had Chicagoans who are contemplating a purchase in Lake Geneva, instead choose to purchase in Marco, or other destinations in Florida, Arizona, or California. Those purchases are fine and dandy, but for those looking to get a little more bang for their water loving buck, Illinoisans might be smart to consider a little known purchasing factor I like to call “cost per night”. CPN is a pretty easy figure to calculate, and it’s most simple to consider real estate as if it’s a hotel. Tom Bodet will leave the light on for you, and it might only cost you $40 a night- bed bug bights available at no extra charge. That’s about as cheap of a CPN as you can find, unless you’re the type who prefers hostels, and if you’re that type, I doubt you’ll be reading this blog.
A CPN rate is a great way to determine whether or not a purchase makes sense from a financial standpoint. Vacation home purchases in Lake Geneva make tremendous sense from a lifestyle standpoint, that much is famously obvious. It make solid fiscal sense to determine a CPN whenever you’re looking at a vacation destination, with transportation to the destination and ease of access being significant contributing factors. When attempting to calculate a CPN for any given vacation home purchase, it’s important to contrast two similar properties, serving a very similar purpose, affording a similar lifestyle, and of similar size. For instance, a lakefront estate on Geneva would compare to a waterfront estate on Marco. A lakefront condo on Geneva would compare to a ocean front condo on Marco. A lake access home at Lake Geneva would compare to an inland home on Marco. You get the idea, so let’s get down to the glistening brass tacks.
In this corner, hailing from the Fontana lakefront, measuring roughly 5 floors tall, the old man of the lakefront, the first residential condominium in the state of Wisconsin (unverified), having sold for $455k in October of 2009, the three bedroom brick behemoth … Fontana Shores! In the other corner, a challenger from the partial sunshine, previously warm state, a three bedroom residence near South Beach, having sold for $770k in December of 2009, Somerset!
A quick run down of stats, so you can see how wild these CPN numbers can really be. First, Somerset. Sales price: $770k. Real estate taxes: $9397. Monthly condo fees: $833. Now let’s look at the cost to get there. Let’s say you’re a family of four, you’re going to fly to your vacation home 6 times per year. By the way, saying you’ll go there six times a year is generous, unless you’re 100% retired. Four plane tickets, out of O’Hare to RSW would probably average $180 per person per flight. That’s a transportation cost annually of $4320. I’ll give you the benefit of the doubt and pretend that your transportation to O’hare is free, and that you’re leaving a car on the island to use when you’re here. Your taxi from RSW to Marco is $70 each way. That’s $840 annually. Oh, and the airport may or may not have to take naked pictures of you before each flight, to say nothing of the fact that even a direct flight from O’Hare probably chews up 7 hours of your day by the time you leave your home and arrive at your Marco doorstep.
Of those six times a year, let’s say that two of those trips are four day weekends, and four of those trips are a week long. That’s a total of 36 nights at your $770k condo- and that’s a really, really generous time allotment if you’re part of a family with kids in school. The costs, not including meals, entertainment, and cost of lost return on your $770k investment, amount to $24,553. That’s a CPN of $682.03. Each night at your vacation home in Marco costs you $682.03 per night. Before you go to the Snook Inn for a grouper sandwhich. Or check a bag or two. Or have flights canceled due to weather, or forget one of your kids at home like the McAllister’s did.
Back to Fontana Shores. Sales price $455k. Real Estate taxes $7976 (on their way down with that new sales price). Monthly condo fees $524. If you’re anything like most of my customers, you’ll end up going to your Lake Geneva vacation home nearly every weekend, but lets assume you miss 12 weekends per year due to previous commitments imposed upon you by your selfish and unthoughtful family and friends, and other vacations. That’s 80 nights per year. Cost to get there? Assuming you’re the same family of four, and you live, as most suburbanites do, within 65 miles of Lake Geneva. Your car averages 20 MPG, so at $3 gas, it’ll cost you around $9.75 each way, or an easy $20 per round trip, or $800 annually in transportation costs. No extra insurance or cost for a car to leave at the lake, since you’ll be able to drive your nice car while you’re here, and instead of wasting 7 hours of a day getting to your vacation home, you’re probably looking at a drive of 90 minutes or less.
The total costs, not including meals, entertainment, amount to $15,064 for the year. Cost per night for a year of enjoying Lake Geneva? $188.30. That’s a CPN that even the most frugal among us could stomach, to say nothing of the $325k the Lake Geneva purchase kept in your pocket. The moral of this study in vacation home economics? Buy in Lake Geneva, rent in Florida. With luxurious beach front condominiums available from $4500 per winter month, it just doesn’t make sense to buy given the ease and cost savings associated with a rental there. See you at the lake (the one without red tide).