Home Away From Home: Is a Vacation Home Worth It?

Vacation time is almost upon us in the Northern Hemisphere, and many individuals and families are getting ready to travel to their favorite locations for rest and relaxation. Some of them will search for an inexpensive motel or resort where they can take it easy while others will look into bigger accommodations like a rental home for a long-term stay. Next year, the search will start all over again. Or perhaps it doesn’t.

Some people decide to stop the rentals and purchase a condo or home for them to stay in any time they want. This means they can travel to their vacation destination for long weekends, days off or even the entire summer. It seems idyllic, and yet there are some strings attached to owning such a place, including the cost. Should you have the cash available for such a residence, here are the pluses and minuses to consider.


First, you have a permanent place to go when you’re interested in getting away from it all. There’s no need to worry about sold out hotels or lack of decent rental homes if you own your own property. Second, the vacation home can be an investment. Not using it for a certain period of time? You can rent it out to other individuals or families, allowing you to collect fees to pay for maintenance, utilities and home owner’s association fees. Then there’s the option of turning your vacation home into a permanent residence when you decide to retire or relocate. By then, you’re practically a resident of the area and can enjoy all of its benefits.


Let’s start with cost. Depending on where you decide to vacation, a condo or home can cost several hundred thousand dollars. Should you be debt free, including your first home, this shouldn’t be much of a problem. However, if you’re already paying a large sum for a mortgage on your permanent residence, this may not be a feasible option. Remember, you don’t want to go broke and feel depressed when in the vacation home.

This brings up the next point. A vacation residence requires upkeep. This includes maintaining the interior and exterior, paying utilities and, if a condo, paying the association to mow your lawn or plow your driveway. In addition, you need to pay property taxes at the vacation home just as you do your permanent residence. This may be taken off your taxes if you don’t rent it out other when not using it.

Actually, let’s clarify this somewhat. Should you request some money from a family friend who rents it for a few weeks, you may not have to record it on your taxes. On the other hand, should you decide to have a property management company rent it out for the rest of the year, it’s going to be considered an investment and you’ll need to pay each year. Best to consult with your accountant before making a purchase.

Finally, consider circumstances that may cause damage to the home. This includes rowdy renters or acts of nature. You want a house that overlooks the beach, then get ready to pay a hefty fee for flood insurance. Either way, repairs to the home may eventually cost more than the original price.

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