You just returned from the most magical vacation by the sea. The kids are tanned and happily exhausted, and your marriage seems stronger than ever being away from the parent-teacher meetings and piles of laundry. The plane ride home has got you thinking…should we buy a vacation home?
Many of us have experienced these exact thoughts returning from a memorable vacation. For some, the choice is easy. But If you are trying to travel on a budget, is buying a vacation home the right decision for your family? Let’s explore some factors to consider when deciding if your family should take the leap and buy a vacation home.
How Do I Get Started?
Buying a vacation property is a big investment, there’s no way around it. First, you need to decide what location you’re interested in and what you’re willing to pay. Then, it’s time to get your finances in order. Very few are able to pay for their vacation home in cash, so you’ll need to obtain a property investment loan to create a clear plan to finance your new investment. Talking to an investment property loan professional can offer you peace of mind as well as a helping hand financially.
Still unsure whether a vacation property is right for your family? Let’s discuss some of the pros and cons of purchasing a vacation home.
Pros of Buying A Vacation Home
1. Great For a Big Family
Do you have a large family that never seems to fit comfortably in a tiny hotel room or suite? A vacation home is amazing for a big family, and you can guarantee there will be room for all your loved ones on that annual beach trip. Bonus money-saving points if you go in with a relative and split a vacation property!
2. Save Money
Do you wish you could cook on vacation but you never have space or amenities? Eating out every day with a family can really add up. Sure, you can rent a vacation suite and cook food in a tiny kitchenette, but if you’re a chef at heart, you probably long for a full kitchen.
Plus, you will save money on your trip by stocking up on your favorite cooking oil, spices, utensils, and other essentials that are often lacking in a rental and you’d end up throwing away when your vacation ends. You can also save on equipment rental on your trip by keeping towels, beach toys, umbrellas, and more at your vacation property year-round.
3. Extra Income
One week at a nice hotel is going to cost you around $2500 for lodging alone. When you own, you’re paying a small mortgage year-round rather than thousands upfront for an expensive hotel room. If your family spends a month or more at the beach each summer, the yearly mortgage would likely be comparable to the rental fees that you’re paying someone else. Plus, you’re building equity!
How about you let others pay the mortgage for you? When you aren’t enjoying it, you can rent out your vacation home to other families! It takes a bit of work to rent out your vacation home, but those rental prices can really add up and make a difference in your mortgage and your financial bottom line.
Cons Of Buying A Vacation Home
1. It Can Be Expensive Upfront
Homes In beautiful vacation destinations can be expensive. Depending on where you live, a small beach condo may be double the price of your modest family home. In addition to your mortgage, you’ll have to pay property tax, utilities, and insurance. Make sure you are making the right financial choice for your family, and don’t rush into buying a vacation home you can’t afford.
2. Extra Responsibility
If you buy a vacation home and choose to rent it out, you will be responsible for dealing with renters, advertising the place, and fielding complaints all year round. Even if you don’t plan on renting it out, you are now responsible for all maintenance and upkeep of a second home. This can be overwhelming, especially if you live far away, and outsourcing the tasks to someone else can really add up.
Even if you take care of your property, buying a beachside vacation home does come with a risk: hurricanes, water damage, flooding, and rising sea levels are natural enemies to a beachside home.
Whether you’re chasing the feeling of that vacation afterglow or just looking for new ways to save money, buying a vacation home is an exciting adventure. While the promise of a tropical getaway seems amazing, be sure you have considered the pros and cons of owning a second home before deciding if this purchase is the right choice for your family!