Vacation home buying

Buying a vacation home

Vacation Home
Vacation Homes (infographic from

A trip to the beach or mountains may have you wondering about owning your own vacation home.  And as it happened you’re not alone!  An April 1st 2015 National Association of Realtors® press release estimated that vacation home sales bounced back to peak levels in 2014.  There was a massive 57.4% increase over 2013 sales!  In contrast, during the same period there was an estimated 7.4% decrease in investment home sales. And an estimated 12.8% decrease in owner occupied home sales (

Although your motivations may be personal, the NAR’s 2015 Investment and Vacation Home Buyers Survey revealed that there are various reasons to buy a vacation home.  Not a surprise, a majority of those surveyed (33% of respondents) indicated the primary reason they bought was to use for vacations or family retreats.  However, 19% of respondents indicated their purchase was for a future retirement home, while 11% or respondents bought for the home to be used as a rental property.

Do the research

You’ll find vacation homes in different styles, sizes and prices.  However, your favorite destination may dictate the price range and style.  You may realize that although you are able to afford the week’s rental at your favorite retreat, you can’t afford to buy a vacation home there.  However, if you broaden the search area, you may find suitable and lower priced vacation home nearby.


You may have heard others talk about the benefits of their vacation home, such as being able to visit any time they desire without having to worry about reservations, or restrictive check-in and check-out times.  They usually don’t have to worry about having too many guests either, as they can invite whomever they wish to keep them company.  And they don’t have to worry about special accommodations – it’s their home after all!


There are benefits of owning your own vacation to be sure.  However, it’s probable that you may not hear vacation home owners talk about the downside.  Jeff Brown, writing for US News and World Report, stated: “A second home can produce a wonderful family tradition or turn into a stress-inducing money pit.” (The Pros and Cons of Investing in a Vacation Home;; February 10, 2016).  Brown quoted Alison Bernstein, founder of Suburban Jungle, saying: “It is less expensive to stay in hotels in various destinations than it is to upkeep a home, including the hidden expenses of caretaking, overall operations of a home and property taxes…However, for those that are able to enjoy it, it is definitely worth it.”

Brown points out the increasing costs of ownership.  Property taxes, insurance, and possibly a condo or HOA fee can increase.  Additionally, the vacation home requires regular maintenance just like your primary residence.  Repairs may compel you to make extra trips to work on the home rather than being a relaxing holiday.

Brown cautions that a vacation home may not be the best vehicle for investment because of the volatility of resort property.  Additionally, if you need the money, it’s more difficult to tap the equity in a second home.  Applying the tax advantages can be tricky too, so consulting with a tax professional before buying a vacation home would be wise.  Self-managing the property can become aggravating, as it can be difficult to find tenants during the off season; however, hiring a management company can be pricey.

By Dan Krell
Copyright © 2016

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.