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Pros and Cons of Buying a Vacation, Destination or Second Home

Whether you prefer the exhilaration of the ski slopes or the relaxation of a sandy beach, a small condo or a large single-family residence, you can find a vacation home to meet your heart's desire, but is it a good idea?

Pros and Cons of buying a vacation home


It’s less stressful than renting. You have more freedom to go whenever you want to get away instead of planning and finding rentals each time you want to go.

It’s good for your health. Going on vacation is good for you! It allows you to rest and relax, both mentally and physically.

You’ll create lasting memories. If you have a space that you can go with your entire family to relax and vacate, you will be more inclined to make the time to get away with those you love and create memories that will last. A vacation home is a perfect place to gather to enjoy time with friends and family. You may even make new traditions of it, creating a sense of closeness even if your friends and family live far away!

New friends — Going to the same place time and time again allows you to make long-term friendships with other local residents, giving you the sense of having a second community to count on.

It’s convenient to be able to decorate your second home as you want and store everything there so you don’t have to tote it back and forth each time you visit.

Retirement — When you own a second home, you have a space that can serve as your retirement home when you get older. You love the location, so why not spend your older years there? If you know where you want to retire and have the means to afford a vacation home there now, buying a home sooner to use as a retirement home later will set you up for a nice transition into retirement.

Pros and Cons of buying a second home

If using as an investment property, there are many financial benefits:

  • You can rent it out and make money when you are not using it (which is a perk in itself).
  • Having a vacation home will diversify your portfolio.
  • Depending on where your vacation home is located, you may be in a destination area that has luxurious amenities for you and your family to use, allowing you to really embrace the local lifestyle!
Pros and Cons of buying a vacation home


Costs — You most likely already have a mortgage on your primary home, and now you will have another mortgage to pay. You will have a larger down payment, higher interest rate, and you will have to furnish an entire home. Not to mention utilities, maintenance, flood insurance, hurricane insurance and other expenses you may not have considered.

Maintenance — you will have to decide how you will maintain the home from afar. You will be responsible for making sure the home is in good condition and all maintenance is taken care of, whether you handle it or you pay someone else to manage it. The last thing you want to do is plan a vacation there only to spend the entire time handling home maintenance or property repairs.

Time Off Work — If you work a lot, you may have a hard time getting away from work to take time to yourself. Think about the amount of time you have before committing to purchasing a vacation home.

Future Sale — If you own it, realize it does take time to sell if you ever get into a financial pinch. It’s not as easy to walk away if you decide to purchase instead of renting a vacation home.

Optionality — Also if you own it, you're committed to taking most of your vacations here. If you are one that likes to vacation in different places and try new destination spots each year, this may not be a good decision for you.

Pros and Cons of buying a destination home


Visit more than once — Get to know the area and how it operates economically. Is it seasonal? If so, what is the area like during off-season? Is it a growing area? Think about these things before taking the plunge.

2-hour rule — It’s best if your destination home is within a 2-hour travel window. This will enable you to make a weekend of it, especially if you work during the week and have a family.

Weather — Think about weather-prone areas such as hurricanes or tornadoes. How will you keep an eye on the house if you do not reside near it?

Location — Consider where the house is located and determine areas in which you are familiar with and enjoy visiting. The point is to improve your quality of life, so first look for a property that makes your life better! Would you enjoy a condo with high-end, luxury amenities? A resort area? A beach-home? If you need rental income, you may be better off choosing a popular destination where short-term renting is common.

Affordability — This goes without saying: only buy what you can afford.

Think of your future use needs — Do you think you will want to golf later in life? Will your hobbies and interests change? Prepare for the future, and whether you are only using it for yourself, renting it out or retiring in this home, always think of it as a long-term investment.

Consider sites like VRBO or Airbnb to list your property if you do decide to rent it out. This will maximize your exposure.

Choose a local Realtor — This is so important. You need someone knowledgeable to help you explore the area, to guide you through the process, and to even manage it while you are not there.

Whether you are considering a vacation home as an investment or for personal enjoyment — or maybe both — look for something you like that you can also rent out if needed in case you can’t use it as much as you hope. For this to be a sound decision, you must either love the lifestyle of the location, or capitalize on the investment with rental return, selling for profit at any given time, or retiring there. You are in control, and here at Nestiny we wish you much success in deciding whether a destination or vacation home is right for you. Cue relaxation!

Want more advice about all things home — including homebuying or selling advice? Nestiny is a great place for homebuyer education and to help you gauge how ready you are to buy a home. Journey Homeward allows you to enter all your wants and needs while the True Affordability Tool will break down your budget, showing what you can comfortably afford. You will also receive a Ready Report that will give you a vital head start in the home buying journey, saving you valuable time and money.

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