Sunday, January 28, 2007
Dream Home...or Nightmare?
In just over two weeks, HGTV is giving away their 11th Dream Home. Located in Winter Park, Colorado, just a hop skip and jump away from the Mary Jane ski area, this three-level, 4,400 sq. ft. escape definitely lives up to its title. All the big players got in on the design of this place: Ethan Allen, Moen, Sub-Zero, Jeld-Wen, California Closets, and even Bissell. But the winner doesn't just get the keys & title to this mountain beauty. Also included in the 2.5 million dollar prize package is a 2007 GMC Acadia, hardwood flooring from Lumber Liquidators (on top of the flooring already in the house?!), $250,000 from LendingTree, and, so Sparky doesn't feel left out, a Doggy Dream House in the backyard.
Since I hail from Colorado (and will always consider this "big dumb square" of a state home), I got super excited and decided to throw my chips onto the table. The rules are simple; visit HGTV's website and enter the sweepstakes once a day until February 16th. I entered the contest twice before the facts of the situation were brought to my attention. When one considers the realities of taxes, insurance, and travel costs, this prize isn't all that dreamy.
A columnist in Denver's Rocky Mountain News recently published an article which plainly lays out the brutal truth to maintaining a property like this one. Even though the house and all the other prizes are gifted to the winner, most of us couldn't afford to even spend one night in our new second home. Hypothetically, if the winner applies the $250,000 cash prize from LendingTree to the initial taxes (about a million bucks), and then takes out a $750,000 loan to cover the rest, the new owner will still need to come up with nearly $10,000 a month to keep this place afloat. Here's the estimated breakdown (presuming the house is labeled a second home):
$6,800 - payment on the $750,000 loan (interest is tax deductible)
$625 - property taxes (deductible)
$350 - household insurance
$200 - auto insurance for SUV
$400 - heating, electricity and water
$200 - gas and travel expenses to the home (only from Denver)
$686 - homeowner's association and clubhouse fees
TOTAL = $9,261
This may explain why only one of the 10 previous HGTV Dream Homes is still owned by the original winner (and even that one is now for sale). Of course, there are ways to downsize rather quickly: sell the SUV, rent out the space as a vacation spot, etc. But now knowing the nasty truth behind such a seemingly fantastic prize, are you still going to try for it?
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