Pros and Cons of Buying a Vacation Home

Vacation Home

❑ It's an investment. Like your primary home, a vacation home will hopefully and probably increase in value. Especially in popular areas near beaches or mountains, you may be able to sell your vacation home for substantially more than you bought it for. ❑ You can earn money by renting it out. If you aren't going to live in the vacation home throughout the year, you could create a passive income stream by renting it out to other vacationers. ❑ You'll save on vacations. Depending where the vacation home is, maybe you'll have to spend money on gas or airfare, but otherwise, you'll already have a place to stay. ❑ You can enjoy longer vacations. After a while, it's hard to justify spending $100, $200 or $300 a night at a hotel, and so you cut your vacation short after a certain number of days or maybe a week or two. But this is your vacation home. In fact, if you work remotely, you may be able to work from your vacation home. You can decide the length of your vacation instead of how long you can afford to stay at a hotel. ❑ It can boost your quality of life. It's not all about money. A vacation home will allow you to a place to recharge and relax, and family members and friends could potentially join you. ❑ It's expensive. The cost of buying and maintaining a vacation home is steep. You're going to be paying another mortgage, plus property taxes, insurance and utilities, just as you do with your primary residence. ❑ The costs could mean you save less for other things. Consider the bigger picture: Will you have less to save for your kids' college fund or your retirement? ❑ You'll have to maintain another home and keep it secure. How long will your vacation home be empty? With today's technology, you can probably set up cameras and monitoring equipment to allay your concern. But pipes can freeze in the winter. A raccoon could chew a hole in your roof and move in. ❑ You might want a change of scenery. In a few years when the novelty of your vacation home has worn off a bit, will you long to go on a vacation somewhere completely different? And will you feel that it's impossible to take a vacation anywhere else, since you've put so much time and money into your vacation home?