HomePersonal FinanceBefore You Buy Your Dream Vacation Home…

Before You Buy Your Dream Vacation Home…

Property ownership has been a tried and true investment strategy for many years now – open any investment guru’s book and the advice to buy an investment property will certainly appear there. Combining your investment property and a vacation home seems to be a match made in heaven – after all, you get to save money on accommodation while on vacation and get to derive an income from the property the rest of the time. You also stand to make a packet of money when you sell the home later.

But before you rush off to get started on building your dream vacation home, there are some things that you need to consider.

How Much Time Will You Spend There?

Are you going to spend every annual vacation there for a long time to come? How many times are you going to actually be able to get away to stay there? Who looks after the house for the rest of the year? Then, we have the next dilemma, what if it makes more sense to you to rent the place out rather than staying there on holiday? You might end up needing to take your vacation in the off-season and this may not be a pleasant situation for you.

The Cost of Running Two Homes

This is something that one usually forgets about, especially when it comes to an investment property but when there are two properties, there are two lots of expenses in terms of property taxes, maintenance, mortgages, etc.

Now ideally speaking, the rental income that you derive from the property should cover the costs for that property but what if it doesn’t? What if you end up with a dead beat tenant, or you cannot rent the house out?

Getting Tenants

If this is a vacation home that you plan to use yourself, even if it is only for two weeks out of the year, you are committing to short-term leases rather than long-term ones. After all, what long-term tenant will obligingly let you crash on the couch when it is time for your vacation? And if you get a series of short-term tenants, you could be looking at additional charges in terms of cleaning and fixing the place up between tenants.


Maintenance is something that most of us tend to forget about and it is something that we might allow to slide a little in our own homes. After all, we can put up with that window that sticks in our own homes. Again, you will need to consider the tenants – they won’t put up with you neglecting to maintain the home for long.

And whereas at your home it is easy to oversee the repairs or possibly do them yourself, if your vacation home is in a different town, you are going to need to hire someone to do the necessary repairs. This could end up proving costly for you.

What About the Off-Season?

Think of the area that you are considering buying your home in. There will be a busy season and an off-season. Whilst you can reduce rental costs during the off-season to encourage tenants, is anyone going to want to come off-season?

Let’s say that you buy a beach house – will people want to go there in the middle of winter?

Managing the Property

Because you will not be onsite, you will need to hire an agent to oversee the property and collect rentals, etc. This all adds to the cost.

At the end of the day, owning your own vacation property could really round out your investment portfolio nicely but you really do need to do your homework before jumping in.


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