Author: Doctor in Denim

What Does it Cost to Take a Family to Switzerland?

What Does it Cost to Take a Family to Switzerland?

Joining Maui, Las Vegas, and Camano Island on our “2018 vacations we travel-hacked” list is Switzerland! This was my sixth time to Switzerland but my first time bringing kids along.

The Trip

Once again, we traveled at a peak time to a destination famous for being expensive. We were in Switzerland for 7 nights over the holidays, and also traveled overnight getting there and getting home – so we were away from home for 9 nights, 10 if you include the airport hotel the night before the trip.

We were mostly in the Berner Oberland, exploring Interlaken, Thun, Murren, and Grindelwald, with a brief visit to Zurich on our way home.

We had the obvious advantage of staying with friends for the majority of the trip, although this did not mean they footed the bill for all our food. In fact, we ate out almost every day and consumed as much local chocolate and cheese as we could get our hands on… which you’ll see reflected in our dining/grocery spending.

We also willingly took on the extra expense of premium economy and business class air travel, as well as three nice hotel stays to make our flight schedule more convenient. You could easily do Switzerland for less than this, particularly if you don’t mind flying in basic economy in the off season (and if you have the advantage of flying from closer than the west coast of the USA). You could also do this trip for a heck of a lot more.

Below is the cost breakdown for our trip, and as such the last of our spending for 2018. This is for a family of 4 during the ever-popular travel time of Christmas break.

(You can also check out our review of flying British Air with the munchkins and our tips for air travel with infants.) 

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Our 2019 Investing Experiment: Building a Vacation Rental

Our 2019 Investing Experiment: Building a Vacation Rental

It’s official: our list of funtivities for 2019 will include building an investment property from the ground up!!

Well, okay… let’s say it’s as official as it can be without actually being done. I suppose there’s always a chance of things getting derailed anywhere in the process.

We’ve never done anything like this before.

Giant gingerbread dough cut-outs on baking sheet
It’s kind of like that time we decided to make a gingerbread castle from scratch.

Why I’m Sharing This

First, so I actually keep track of the whole thing – including the little numbers like the ones you’ll see below. Keeping close track of it will help us decide if it was worth it and if we want to do something similar again.

Second, because I’m always wondering how my peers are investing their money and what that looks like. I get that it’s probably really intimidating for a lot of people to share this kind of stuff, but it doesn’t bug me. So I’m putting this information out there in case other people are wondering the same thing.

Why Now?

We are getting our student debt and business debt well under control, so we decided it was time to hunt around for another way to invest and grow our net worth. Traditional investment/retirement accounts bore us, and we have no interest in owning more offices (which seems to be a frequent next step of ortho docs in my position).

We like real estate, but aren’t super experienced with it. We own (or, more accurately, have mortgages on) our primary home and one long-term rental in another state which mostly takes care of itself. So we decided we wanted to try something new. We settled on building a vacation rental property.

The Location

We bought a little chunk of land in the gorgeous town of Sedona, AZ (where the banner photo was taken) in early 2017. The lot is a little over 10,000 square feet and is just a short walk from Uptown Sedona (the main tourist-trap part of this very touristy area). It’s a perfect location for a vacation rental and not a half-bad place to retire, should we want to do that there someday.

We paid $89k for the lot, had the seller finance it for a few months, and then paid it off (so we paid minimal interest and never involved a bank).

The Project

We recruited the help of a well-reputed contractor as well as a designer and architect. After changing our minds a dozen times about what we wanted, got an awesome plan back for a little under $5k.

Gingerbread castle held together with frosting with no decor
This thing took 6 adults and the better part of a day to assemble, and it only stayed together after being left overnight wrapped in that green tape that they use on flower bouquets.

The structure will have a 3-bed, 2-bath “main house”, and an attached “mother-in-law suite” with 2 bedrooms and 1 bathroom. The total square footage is a little under 3k. The build is estimated to cost $506k.

For the sake of comparison:
“The median home value in Sedona is $505,400. Sedona home values have gone up 11.4% over the past year and Zillow predicts they will rise 4.9% within the next year. The median list price per square foot in Sedona is $281…The median price of homes currently listed in Sedona is $599,450.” (Zillow, December 2018).

Our yet-to-be-built house just appraised for $706k.

We’ll let you know how much we hate or love the experience of trying to build something like this. We’ll also, of course, be sharing the cash flow of this property once it’s up and running as a vacation rental. Then we’ll know if this thing is a huge win or a huge failure investment-wise.

The Costs So Far

For now, here’s where we’re at (approximately):

Lot: $89k

Design: $5k

Property taxes paid to date: $2k

Other (weed clearing/”sewer standby” fees): <$1k

Builder’s risk insurance: <$500

The Upcoming Costs and (if We’re Lucky) Profits

As mentioned above, the build itself is going to cost $506k. We are planning to borrow $450k as a construction loan and pay for everything else in cash. The construction loan will convert to a traditional mortgage when the house is finished.

If we were building this as a spec home and could sell it for its appraised value when it was finished, we’d pocket about $158k before taxes. That’s over $52 per square foot or 22% profit, however you want to look at it. I feel pretty good about these numbers but they also don’t matter too much because we don’t plan to sell.

The best-case scenario is that we will be raking in scads of vacation rental income – beyond our mortgage and maintenance expenses – starting in summer of 2019. Similar properties in that area are currently renting for $300-500 per night.

The worst-case scenario is that this thing generates zero money and/or the economy tanks real hard (like the media seems to want us to believe it will at any minute). That would be a huge bummer, but even in that case we should still be able to stay above water with this thing for the long haul.

We’ll keep you posted.

Finished gingerbread castle!
Ta-da! No doubt Good King Wenceslas lived in a structure exactly like this. Merry Christmas to all!
Second-Hand Holidays: Why Our Kids Aren’t Getting New Stuff for Christmas

Second-Hand Holidays: Why Our Kids Aren’t Getting New Stuff for Christmas

There’s something about the prospect of getting new stuff that causes kids to go a little nuts around the holiday season. I’ve heard “You know what I want for Christmas…?!” approximately a thousand times since Halloween. And the answer to that question is not a single, simple item. Heavens, no. Long gone are the days when kids sent a hand-written letter to Santa asking for a jump rope. Kids are now making online “Christmas wish lists” on par with wedding registries, and plenty of parents are boldly crowdsourcing holiday shopping money “for the kids!”

We’re kind of over it.

Here are five reasons why my husband and I – despite loving the holiday season and having plenty of money available to spend on our little angles –  have all but nixed Christmas presents in our household:

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Announcement: We’re NOT Selling Everything to Travel the World!

Announcement: We’re NOT Selling Everything to Travel the World!

Whaaaaaat??!!

This might come as a huge shock to those who know us, what with the recent upsurge in nomadic impulses among Millennials – especially those who, like us, have always loved traveling and are drawn to minimalism.

If you were unaware of this trend, just search “nomadic lifestyle” or “millennial nomads” or “digital nomads” or “nomadic families” or anything similar and you’ll be up to speed in no time. People seem to be hitting the road in droves with one-way tickets in hand.

Could we if we wanted to?

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Baby’s First International Trip and Other November Spending

Baby’s First International Trip and Other November Spending

The most exciting (and most expensive) part of November was our week-long escape to the warm waters of the Bahamas and the beautiful Gulf Coast of Florida. The cost breakdown of that trip can be found here.

A quick reminder: these monthly spending reports are an effort to keep myself accountable to the idea that doctors do not have to spend a totally ridiculous amount of money to live well and love life. We’re planning to do these spending reports through the end of 2018.

As I have mentioned before, we do not do traditional budgeting. You absolutely should do traditional budgeting if that works for you as a way to control your spending.  More on this topic here.

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Cheating at Thanksgiving Vacation

Cheating at Thanksgiving Vacation

I’ll admit it right off the bat: we are really lucky to know lots of people who live in cool places and do cool things and frequently invite us along for the ride.

It’s now our firm policy that we say “yes!” to as many invites as possible from our loved ones.

I do realize this gives us a huge advantage over people who feel like they are blazing the travel trail on their own while most of their acquaintances prefer to be parked on the couch watching TV, or who feel unsupported in their desire for adventures by loved ones who don’t have the same hobbies. But if that’s you, please know this:

The more you pursue travel and adventure, the more you will meet other people who do these sorts of things, and the more you will get intriguing invitations sent your way.

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October Spending: a Great Reminder that Cars are Expensive

October Spending: a Great Reminder that Cars are Expensive

So October included a Car vs. Bike Rack showdown. The bike rack won, suffering minimal damage while somehow ripping up our car to the tune of over $2,2oo and over a week in the body shop. We do have decent car insurance, but we are still out the $1k deductible. And after the catastrophe last year with the same car, I’m assuming our insurance rates will go up any time now.

The silver lining of the situation is that we have been functioning just fine as a 1-car family. That was one of our goals in moving to this part of town – not to get rid of a car necessarily, but to be able to if we wanted to. And now we know we can! Huzzah!

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Our Adoption Announcement Letter

Our Adoption Announcement Letter

I wrote this almost four years ago, when we found out that we were likely to be adopting C from foster care. You can see all of my posts about foster care and adoption here

We completed a second adoption from foster care a few months ago  – and November is National Adoption month! – so it seemed like a good time to share this publicly. We didn’t include any photos in that original letter, but I have included some here just for fun.

If you are working on your own adoption announcement, feel free to use any of this that applies to you

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A Desert Wedding, an Epic Race, and Other September Spending

A Desert Wedding, an Epic Race, and Other September Spending

We’ve somehow made to the end of 3rd Quarter, tracking every dollar we’ve spent this year (scroll to the bottom of the post for the total numbers)!

A quick reminder: these spending reports are an effort to keep myself accountable to the idea that doctors do not have to spend a totally ridiculous amount of money to live well and love life. We’re planning to do these spending reports through the end of 2018.

As I have mentioned before, we do not do traditional budgeting. You absolutely should do traditional budgeting if that works for you as a way to control your spending.  More on this topic here.

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The Infamous Operating Agreement, Part 4

The Infamous Operating Agreement, Part 4

Make sure you have read Part 1, Part 2, and Part 3 before you read on.

This fourth and last (and longest!) post about our operating agreement probably contains one of the most critical sections – the details on how we agreed to run the show day to day. You’ll also find our agreements about indemnity (snoozefest, but still important), non-competes and other restrictive covenants, and some miscellaneous agreements that we felt were important. Schedule B and C toward the end were the agreements that each of our spouses signed.

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