Vacations are one of life’s greatest pleasures. Many of us plan and dream all year about taking a holiday. If you’ve always rented or leased vacation homes when you wanted time away, maybe it’s time to think about the benefits of owning one.
Buying a second home for vacations isn’t the simplest thing to do. It’s as involved as buying a primary residence, and you’ll likely need a real estate agent to help. But the benefits are very real, and you could enjoy them if the time is right.
If you’re just starting to think about owning a home away from home, here are a few important points to consider:
Why it’s a Good Idea to Buy a Vacation Home
- One obvious plus is always knowing where you’ll stay. You’ll be home, even on vacation, and you won’t have to worry about whether there will be a vacancy at your favorite place.
- You won’t have to wonder, “Who’s been sleeping in my bed?” When you take a break from your regular world, your home away from home will be just as you left it.
- There’s less packing to do. When you vacation in your own home, you dwn’t have to pack bedding or laundry detergent. Even your “vacation toothbrush” will be waiting in the medicine cabinet.
- Real estate can grow in value. When you purchase a vacation home, you’re investing in a tangible asset. The longer you own it, the more value will accrue. Kiplinger says second homes that are kept solely for the use of the owner, or are only rented for two weeks a year, provide a tax break.
Pros and Cons of Owning Vacation Homes
- Vacation is a time to get away from everything that’s familiar. If you want to go someplace new, it's more challenging when you own a vacation home.
- If it’s your own property, you’re responsible for all of the maintenance. When the heat and air unit needs servicing, there’s no staff to handle it (read: Vacation Homes, Vacant Homes, and Winter).
- Keeping a vacation home stocked means buying two of almost everything. You’ll be responsible for furnishing the rental home, from the beds and living room furniture, down to the shower curtain and rugs.
- There’s no guarantee your investment will grow. As an example, some properties in Florida plummeted in value after the market swelled and then bottomed out.
- A lot of people who own vacation homes like to rent them out. This can cover your mortgage, and even bring in a profit. But if you rent for more than two weeks a year, you’ll lose the tax credit.
- Renters aren’t always inclined to take care of someone else’s property. If you rent your home when you’re not on vacation, chances are you’ll have at least one renter who leaves a burn mark on a countertop or stops up the drain.
When to Buy Vacation Homes
If there’s a vacation spot you visit year after year, buying property in that area can make good sense. You might not find exactly what you’re looking for location-wise, though. All of the prime real estate in popular areas is probably taken by investors. Anything that comes onto the market won't come cheap.
Americans love taking holidays as much as people in any other part of the world. Unfortunately, we tend to have a lot more guilt about breaking away than anyone else. We work longer hours, take fewer breaks and worry about work piling up while we're away. A vacation home helps ease some of the stress of traveling, and if you really can’t stop checking email, you can have a small home office in your vacation home.
Buying a second property isn’t a small investment, even if you find a great deal. If you’re financially stable and have the savings to support a good down payment and all the upkeep, buying instead of renting every year can make good financial sense.
Vacations aren’t just a luxury. Huffington Post says Europeans enjoy 20 – 30 days of guaranteed paid vacation every year. In the US, that’s definitely not the norm, but maybe it should be. Never breaking away from work can lead to chronic stress, which can affect your health. Vacations are critical for your health and relationships, and can even make you more productive when you aren’t on holiday.
If you dream about a place to call your own near a sandy beach or ski slopes, maybe it’s time to start thinking about it now. Whether you’ve got the means to invest in property now or need a few years to save up, owning a second home can make vacations more pleasant, and help make your time at work better, too.
My wife and I have always wanted to buy a vacation home near the beach, so thanks for sharing this. I like your point about how Americans hardly get breaks and holidays. I agree that we should take advantage of this time off and look into getting a small property to vacation in.
My parents have been thinking about getting a vacation home. So I liked that you talked about how it would be good for them to look for a property that could grow in value. That would be a good way to ensure that they don’t waste their money on a house.
Ivy, Second homes can be a good investment but they may be more difficult to sell when the housing market dips, because they’re a luxury … not a necessity.
It’s always been mine and my wife’s dream to own a vacation house. And we’ve decided that it’s now time to realize that dream. I understand that there could be caveats about owning a vacation home like added expenses and additional maintenance costs. However, like you said, this could be a source of income as well like renting it out but just make sure that you “rent-proof” your home just to be on the safe side.
Good luck Dan and it’s much easier to rent now with AirBnB. We had to use a local real estate company when we started renting, then switched to HomeAway but I recently had a bad experience with them so I’d suggest starting with AirBnB.