Getaways on the Cheap

SO YOU'RE STROLLING ALONG THE cobblestone Main Street of some charming New England village, lapping away at your Ben & Jerry's cone, when you come upon one of those real estate offices plastered with photos of vacation properties. You pause to look, then, seduced, begin to read the descriptions. "Beachfront." "Trailside." "Secluded." It's all so tantalizing - acres of land, sandy waterfronts - that before you know it, melted Chunky Monkey is running down your arm. But the daydream is brief because, in truth, you don't consider yourself second-home material. You don't have even a single extra million dollars lying around, never mind two. You figure you're destined to only sample the second-home lifestyle, to live and dream vicariously through seasonal rentals.

Snap out of it. Secondome sales reached record highs over the past two years, according to the National Association of Realtors, and accounted for nearly 40 percent of all real estate transactions in 2005. But instead of drooling over that perfect property you can't afford, you may want to think in new ways about buying a vacation home. Instead of that castle in the clouds, are you willing to consider a cottage by a brook? Affordable second-home opportunities are out there for buyers who approach the market with an open mind and a sense of realism. "Everybody's looking for the beautiful home on the lake, and they want it for $100,000," says Suzie Laskin, an agent with Prudential Joy Tarbell Realty in North Conway, New Hampshire. Rather than chasing the elusive steal, direct your energy toward more creative options. Many second-home buyers stumble upon their places unexpectedly, in some cases while looking for something else entirely.

That's not to say you shouldn't set some basic parameters. "Start with knowing what you're seeking," advises David Hehman, head of EscapeHomes.com, an online marketplace for second-home buyers. "Are you seeking a lifestyle or a particular recreational amenity? Do you want to be near water, in the mountains, or in an urban setting? Write some criteria and test them against the destination." The real estate agents interviewed for this story estimated that at least half of the buyers whom they work with are paying for second homes with cash - many of them recent retirees with new access to investment money. If you're part of the other half, and you don't have a house-sized bank account waiting to be tapped, here are some strategies to consider.

THINK THOREAU

Michael and Tracy Anderson bought 2 acres of land in Stow, Maine, last year after camping on a property in the area owned by Tracy's sister and brother-in-law. Lured by the swimming in nearby Kezar Lake, canoeing in the Saco River, and miles of snowmobile trails, the Andersons found trips to Stow well worth the four-hour drive from their home in Ashaway, Rhode Island. "It's a peaceful kind of getaway from our crazy lives," says Michael, 32, who owns a wood-flooring business. So after paying $29,500 for the land, they set about building an affordable place to live.

The red-cedar-shingled house they erected set local tongues wagging. "It's tiny," Michael says. "And when I say tiny, I mean tiny." The Andersons' house has roughly 170 square feet of living space, about the size of the average living room. It is just big enough right now for the couple and their 3-year-old daughter, Michaela, but the space is designed as the core of a larger home in which they hope to retire. Against today's backdrop of McMansions and starter estates, such a tiny house is something of an oddity. Yet, vacationing in reduced surroundings makes perfect sense - loosed amid the mountains or in view of the sea, who needs more than a simple cabin or cottage? And the savings are substantial.

Michael, a carpenter by trade, built the home for about $20,000. "Everybody thought I was crazy," he says of the neighbors and passersby who saw the house taking shape on a flatbed trailer parked in his driveway in Ashaway. Michael finished the house in about five months, then towed it to Maine in the dark of night to avoid traffic. After positioning the house on his property, he sawed the wheels and axles off the flatbed and left the rest in place as a foundation. The wee house's interior uses big-house features, like knotty-pine walls, durable bamboo floors, and a 10-foot cathedral ceiling. The 5-foot-by-8-foot bathroom has a shower, not a tub, and the kitchenette is equipped with a 20-inch-wide electric stove and a small refrigerator. The family sleeps in a 10-by-10-foot loft space for now, but the septic system is big enough for a three-bedroom house. Their five-year expansion plan calls for a screened porch, a separate bedroom, and what Michael calls "a real living room."

Would-be tiny-house dwellers less handy with a hammer can order premade units online in styles that range from gingerbread to modernist. Scaled-down living is increasingly trendy among the environmentally conscious, particularly on the West Coast, says Jay Shafer, an architect who designs and builds houses anywhere from 60 to 750 square feet through his California-based Tumbleweed Tiny House Co. Shafer - he lives alone - recently expanded his own year-round dwelling to 100 square feet from 70. He sells both building plans and finished houses; the largest costs $80,000.

The savings extend to lower property taxes and utility bills. Shafer estimates the cost of heating a 100-square-foot house with propane, even in New England, at a mere $160 for the year. The downside, of course, is the limitation on entertaining. "In my 70-square-foot house," Shafer says, "I could have four people over for dinner. But it's kind of like when you go out to a restaurant and eat in a booth: If somebody has to go to the bathroom, everybody has to move."

COMMUNE WITH NEIGHBORS

Even a tiny condo was too expensive for Ed and Shilo Abell of Gloucester when they began casually considering a second home in North Conway. "Just for a ha-ha, we looked at property in western Maine," Ed says. Laskin, their agent, steered them toward the next best thing to lakefront property: a lakeside community with shared water frontage. By buying into one of these communities, you gain unlimited access to the water without having to foot the entire tax bill for such prime real estate. "The trade-off is you don't have your own private water frontage or boat dock," Laskin says. "But people come up on different weekends, and it could be fairly quiet and private most of the time."

Last Fourth of July, for example, the Abells counted exactly one boat on Lovewell Pond, the deceptively named lake-size body of water in Fryeburg, Maine, where they purchased a home. Ed, a controller for a public relations firm, and Shilo, a substitute teacher, paid just $127,000 for a three-bedroom house on a half-acre in a community of about 15 houses. A $25 annual association fee covers taxes and maintenance on the shared beach. They make the three-hour drive from Gloucester with their two kids, ages 8 and 6, about every other weekend during the warmer months to enjoy swimming and canoeing. "There's hardly anybody on the pond," says Ed, 33. "My boss has a house in Sandown, New Hampshire, and his lake is inundated." The other surprise: Almost all of their Lovewell neighbors are from Massachusetts.

DON'T OBSESS ABOUT ADDRESS

Massachusetts buyers looking for affordable property near the Berkshires are more likely to bump into New Yorkers than folks from home. Property is so pricey in the Lenox and Stockbridge areas that the spillover into adjoining Columbia County, New York, has made that market less accessible as well. Now, second-home hunters are beginning to venture into that state's southern Rensselaer County, just across the state line from Pittsfield and Williamstown, says Bertram Freed, president of The Kinderhook Group in Chatham, New York. About a 2 1/2-hour drive from Boston, the town of Sand Lake, New York, for example, contains 11 lakes within 10 square miles, yet it has stayed off the radar. "Most people don't realize it's there," Freed says. Properties on or near the water are typically priced between $150,000 and $300,000 but can go up to $600,000.

Still, some buyers just can't cross over. For them, "the New York-Massachusetts border is like the Berlin Wall of real estate," says Bob Romeo, president of Century 21 Franklin Street Real Estate Associates in Lenox. "It's much cheaper once you cross it, but it's just not the same to say you own 2 acres of land in Canaan [New York] versus Lenox." The status-conscious buyer will have to head east into what Romeo calls the "third ring" around the Lenox area to find country property at significantly lower prices. In Massachusetts, he recommends Becket, a sparsely populated town that stretches across nearly 47 square miles, and Otis, a slightly smaller town encompassing numerous lakes and ponds.

In Vermont, buyers have to butt up against the Canadian border to find a ready supply of waterfront real estate priced below $500,000. Properties on the state's larger lakes of Champlain, Willoughby, and Seymour tend to be more dear. In the Northeast Kingdom, however, available houses on Lake Salem in Derby, Brownington Pond in Brownington, and Crystal Lake in Barton start as low as $199,000 and reach a high of $500,000, according to David Campbell, a realtor with Century 21 Farm & Forest Realty in Derby, Vermont.

LEARN TO BE A LANDLORD

For those who can stand the parking lot that Route 6 becomes in the summer, silky beaches and spectacular dunes await on Cape Cod. Buying rental property on the Cape has long been an affordable way into that market, and it still can be. But the path is more treacherous nowadays. Prices have risen so high that today's buyers can no longer rely on summer rental income to carry their mortgages, warns Priscilla Geraghty, a broker with Real Estate Associates in North Falmouth. Do the math: Say you take out a $380,000 mortgage on a $400,000 property. The bank loans you the money at 7.5 percent because, Geraghty points out, interest rates are higher on investment properties. That puts your monthly payment in the vicinity of $2,700. "The best-case scenario for that house is that it rents for all 10 weeks of the season at $1,500 a week," Geraghty says. "There's no way you can get that mortgage money back." Her two-minute lecture to would-be landlords is not to buy unless they can keep six months' worth of payments in the bank.

Some buyers squeeze more money out of their vacation homes by renting nearly year-round. "Some use it a few weeks, but some aren't able to use it at all," says Wendy Beaulieu, the office manager at Prudential Premier Properties in Osterville. She has recently seen a few owners add in-law apartments and take in their parents as paying tenants.

The current stockpile of inventory on the Cape - compared with last year, there are a lot of houses for sale, say brokers - makes it easier to negotiate prices downward than it was even 12 months ago. Armando Cassano, a 34-year-old Dedham hair-salon owner who closed on a three-bedroom ranch house in Yarmouth last month, paid less than $300,000 and plans to recoup some money by renting at least part of the year. "I see it as a great investment," he says. "The Cape is starting to turn itself into a four-season community."

PUT YOUR SECOND HOME FIRST

One reason for the transformation is that prices on the Cape are relatively low compared with the Boston market. Though Karen and David Holt are a good five years away from retirement, they decided that, with both kids grown and out of the house, it was worth swapping their large Colonial in North Andover for a rented apartment and buying a 3,500-square-foot Cape Cod-style house in Falmouth. "We did a flip-flop," Karen says. The commute to work is longer for both of them, but at least one day a week Karen is able to telecommute to her job as global client services manager for a market research company in Framingham. The apartment provides an option in bad weather and during the shortest days of winter.

Brookline's Nate Nickerson and Heather Hayes took a similar approach to second-home buying, only they skipped the first house altogether. The couple's rental setup is ideal: Their landlord is Nickerson's mother, who, as the other resident of the two-family house they occupy near Coolidge Corner, also serves as an emergency baby sitter for their 2-year-old daughter, Abigail. Their real desire was for a country house in the Berkshires, so last summer they began scouting the Great Barrington area with Mary Jane White of Cohen & White Associates.

"We wanted to build something prefab and modern, something really cool right out of Dwell magazine," says Nickerson, 36, deputy editor at Technology Review. "The house we ended up buying we saw when I was out looking for land with Mary Jane. It's an old farmhouse, totally the opposite of what I thought I was looking for."

Located on 2 acres across the street from a farm in Alford, the renovated house has three bedrooms and 2 1/2 baths. Nickerson doesn't want to disclose the purchase price, except to say the same amount of money would have bought a very small apartment in Brookline. (Any two-bedroom there that's in decent shape and bigger than a shoebox goes for $500,000 these days.) By forgoing the house in the city, the couple figure they've already got retirement covered. "We have no idea what the adventure of the next 30 years is going to be," Nickerson says, "but the constant is going to be the place in the Berkshires, and that's really nice."

Lisa Prevost is a freelance writer in Connecticut. Send comments to magazine@globe.com.