Smart Buying
At Home Abroad
Vacation home prices are soaring, but you can still enjoy the comforts of a getaway retreat -- if you're up for some adventure. Discover three enticing locales where the price is right.
By Pat Mertz Esswein, Associate Editor
From Kiplinger's Personal Finance magazine, August 2005
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More than one-third of home purchases last year were second homes, and -- no surprise -- prices are soaring. The median price of a vacation home is now $190,000, and if you want to be on the water, watch out. Even in the north woods of Minnesota, popular with vacation-home buyers from the Twin Cities, you can pay $250,000 for an acre of wooded land with 170 feet of lakefront.
One alternative for buyers who don't mind mixing a little adventure with their pleasure trips is buying abroad. With smart shopping, the price can be very right, but the real payoff will be in savoring a slice of the good life in another culture. We scoured three continents for desirable locales that are both affordable and accessible and settled on three: Nova Scotia, Honduras and the Etruscan region of Italy. Then we found part-time expats who are living their dream.
Nova Scotia: New England revisited
John and Jenice Benton of Tempe, Ariz., intended to buy a second home in New England to escape desert summers. In 1997, they spent part of a vacation fruitlessly scouting out places in Vermont, where they found properties too scarce and high-priced. On a whim, they headed to the historic Nova Scotian fishing village of Lunenburg, near Halifax. While strolling one evening, they passed a real estate office with its door open. The next day, the couple went back and asked to visit some of the homes for sale. They bought the second one they saw -- an exquisitely restored two-story Cape Cod built in 1840 -- for $92,000 (all prices in this story are in U.S. dollars). It's in the village, within walking distance of its harbors.
Nova Scotia has since become a family affair for the Bentons. Eldest daughter Katie and her husband, Hal Cohen, from Baton Rouge, La., purchased a second home for themselves and five-month-old son Julius. The couple split the $81,000 purchase price, and the $81,000 it cost to renovate the house, with her parents, and they share ownership.
Parts of Nova Scotia have seen appreciation similar to that in the U.S. Properties in Lunenburg, for example, have appreciated more than 70% since the Bentons bought their home nearly eight years ago. But the province continues to attract Americans looking for a location that's more affordable and less congested than New England and elsewhere on the East Coast. "Nova Scotia feels like New England 50 years ago -- unbelievably wholesome, with a slower pace," says John, 57, a real estate developer with family roots in New England. The province has 4,600 miles of coastline, hundreds of lakes and rivers, 60 golf courses, and a rich Celtic and Acadian heritage.
But Nova Scotia's greatest asset may be its people, uniformly described as friendly and kind. John Benton says his neighbor, a purser for the scallop fleet, often leaves a bag of the day's catch in the Bentons' refrigerator with a note to "cook them tonight."
Where to look. Buyers have already discovered Nova Scotia's capital, Halifax, and the nearby South Shore villages of Chester, Lunenburg and Mahone Bay. But deals are available elsewhere, and landlocked property is generally cheaper than waterfront land. If you're intent on buying oceanfront property, one caveat, says the Bentons' real estate agent, Al Keith, is that some older homes on the ocean face the road, not the water, because their original seafaring inhabitants didn't want a water view when they were at home.
If you'd prefer to build yourself, a recent listing advertised 3.5 acres of oceanfront property on the island of Cape Breton, Nova Scotia's northernmost point, for $80,200. You can build a comfortable home for about $100 per square foot.
Buying basics. Purchasing a house in Canada is similar to buying in the U.S., and you can generally get to closing within 30 to 60 days of an accepted offer. You can finance your deal through a Canadian lender for up to 75% of the home's value. Closing costs will include about 0.5% to 1% of the home's price for a deed-transfer tax, plus a maximum of about $2,000 in legal fees. You'll be assured clear title under the Canadian government's Land Registration Act, so title insurance won't be necessary. The Bentons are paying $1,430 annually in property taxes. Because U.S. insurers won't assume the risk of insuring foreign property, you'll have to purchase homeowners insurance through a Canadian company. The Bentons pay about $730 per year.
When you're ready to furnish your new home, Canada offers a one-time exemption from customs duties on household goods you bring to that country. Security in your absence won't be a big issue, but it wouldn't hurt to hire a property manager or caretaker to drop in occasionally. During the winter, the Bentons rent their home to a local couple.
Getting there. Driving from Boston through Maine and New Brunswick takes about 12 hours. You can cut off several hours by taking a car ferry from Bar Harbor, Maine, to Yarmouth, on the southern tip of the province. Or you can fly to Halifax and rent a car.
