# [2012] Pros and Cons of owning a vacation home: any advice or experiences



## ciscogizmo1 (Sep 15, 2012)

I'm looking to buy a permanent vacation home.   I have an opportunity to buy in one place that has good rental history but I'd have to fly to it.  The other possibility is within driving distance but rental history is not as strong.  What would you pick?  Do you go solely based on profit/loss?  Or do you assume you'll take a loss?  I'm not 100% sure we are doing this investment.  Would like a place to go to escape work and stuff?  We timeshare but we want something a little more flexible and something that is ours like our home.  I guess, we are more homebodies than anything.


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## Elan (Sep 15, 2012)

I haven't done it, but I've certainly considered buying a vacation home.  Where I live there are a couple of "resort" areas about 2.5 hours drive.  

  Personally, I would only consider a vacation home if:

1) I was so wealthy, the economics didn't matter, or
2) I thought I could rent it out to cover all expenses, and still use it when I wanted, or
3) I thought the property would appreciate enough that I could use it as wanted, possibly renting occasionally, and recoup most, if not all,  of my accrued expenses upon sale.

  For me, #1 is out.  #2 isn't really feasible either in the areas I've mentioned -- just too many rentals in the pool.  #3 has become a possibility due to the drop in real estate in the past 5 years.  

  In general, I think vacation home ownership fall into the category of "seems like a great idea, but doesn't turn out as great in reality".  Mostly because they don't get used as much as planned.  Kind of like buying a boat or motorhome.     Having said that, I haven't given up on the idea.


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## PStreet1 (Sep 15, 2012)

We've owned several, and we have friends who own them.  
1.  They can become a time burden; sometimes you feel you need to go when you'd really rather stay at your primary residence:  you need to check out the vacation home, need to do some bit of maintenance, need to make sure it looks occupied regularly, etc.
2.  When you rent (I've rented and not rented), you absolutely must have a safe, lockable place for personal stuff.  Most of your rentals will go well, but some of them won't--and you may be surprised at how "not well" they can go.  Managing rentals is time consuming.  Having a property manager may not be all it's cracked up to be.  We have friends who are currently renting their vacation home.  Their daughters decided to use it on the spur of the moment and found a large, moldy patch on the wall--really gross--from an, obviously, on-going leak that had not been tended to (and this is newish construction).
3.  If you are going to rent, I'd advise not getting too personally invested in it.

Given those factors, which were what I experienced, I think I'd choose the one with the best rental prospects and not get too invested in it.  Then, when the market improves (as we all hope it will), consider selling that one and buying one for your personal use--if you still want one.


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## BoaterMike (Sep 15, 2012)

ciscogizmo1 said:


> I'm looking to buy a permanent vacation home.   I have an opportunity to buy in one place that has good rental history but I'd have to fly to it.  The other possibility is within driving distance but rental history is not as strong.  What would you pick?  Do you go solely based on profit/loss?  Or do you assume you'll take a loss?  I'm not 100% sure we are doing this investment.  Would like a place to go to escape work and stuff?  We timeshare but we want something a little more flexible and something that is ours like our home.  I guess, we are more homebodies than anything.



There are very many variables.   You have to decide if you want strictly an investment or a place to vacation and possibly use rental fees to offset the the cost of maintenance, utilities, home owner fees and some of your debt service.  

If you are interested in positive cash flow, chances are you will need to look in an area with a long rental season and have enough of a down payment to keep your debt service on the low side.  And, if you are after positive cash, then you probably not able to use the vr in peak  season as you will be giving up revenue every time you use the property.  

All this being said, we have a vacation rental where we try to gain enough revenue to pay the home owner fees, utilities, and make improvements like carpeting, tile, furniture, new HVAC, etc.   Why not have someone else pay for improvements?

We also tend to use our condo during holidays so we forfeit a good amount of revenue.  But that's our choice.   Our goals might be different than others.   Of course, we had hoped to gain on appreciation, but we know how that's going.   

A property much closer than a plane ride helps you to do some or all of the managing yourself, saving on fees that range from 25 to 40%.   Our choice was to purchase in an area about 2.5 hours away.   We take care of everything, including cleaning, resulting in mgmt fee savings and ensuring that our guests have a clean condo when they arrive.  

Be sure to clearly identify your goals and your budget before making any decisions.  I would recommend some reading on the topic.   We relied heavily on the recommendations of Christine Karpinksi and her "How to Rent Vacation Properties by Owner" and "Profit From Your Vacation Home Dream..."  There are others books, but we used Christine's strategies and they worked for us.  

If you are interested in a vacation rental forum where you can do some research, you can PM me.

Mike


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## ricoba (Sep 15, 2012)

We bought a "vacation home" a year and a half ago here in Las Vegas.  

We had planned on only using it for get aways but it has become more permanent for us (I have lived here off and on since May).

For us a few factors weighed in for us to buy this house (townhouse actually).  

First, prices in Vegas were at all times lows when we bought, so we scored a very good deal. (look for good prices with capital growth potential)

Second, we like Las Vegas (so buy where you like)

Third, Vegas is close to LA, so we can drive here, which made sense because we could use it more frequently. (find a place you can get to easily without great expense).

Fourth, this house was move in ready.  (don't buy a fixer upper unless that's what you love to do)

Fifth, we may live here permanently in the future. (find a place that you could actually consider home and not just a retreat house)

Just my two cents.


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## Passepartout (Sep 15, 2012)

If you LOVE to do maintenance on 2 homes, instead of one, go for it. Lots of people around here have them and we've enjoyed visiting many times and pitching in with the 'chores.'

Now. You asked for the 'cons' as well. Just read through this ongoing TUG thread: http://www.tugbbs.com/forums/showthread.php?t=166351&highlight=vacation+home+trashed It's enough to convince me.

Best wishes!
Jim


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## ronparise (Sep 15, 2012)

I sell this  stuff, most of my customers are buying for their own use.3-6 months a year, and some of them hope to rent it to offset some of the expenses when they are not here


some are buying for their primary residence when they retire and for vacation use in the meantime and some of these folks want to rent to offset some of their expemses

and some are buying strictly as a rental property.

The ones that are the happiest are the ones that dont try to rent. 

Vacation rentals are a big job.  They can be profitable...but its a job. My next door neighbor is a snowbird, I see him 3 or 3 times a year. and he's working on the house most of the time he is here

Buy the book   How to Rent Vacation Properties by Owner  by Christine Hrib Karpinski for insight from someone that makes it work


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## AwayWeGo (Sep 15, 2012)

*Recycled TUG-BBS Entry.*

Click here for a brief account of our vacation home experience. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## rhonda (Sep 16, 2012)

ciscogizmo1 said:


> I'm looking to buy a permanent vacation home.   I have an opportunity to buy in one place that has good rental history but I'd have to fly to it.  The other possibility is within driving distance but rental history is not as strong.  What would you pick?  Do you go solely based on profit/loss?  Or do you assume you'll take a loss?  I'm not 100% sure we are doing this investment.  Would like a place to go to escape work and stuff?  *We timeshare but we want something a little more flexible and something that is ours like our home.*  I guess, we are more homebodies than anything.


Vacation home or Investment/Rental Property?

We've owned a vacation home for almost 7 years.  It is an easy drive-to destination (70 miles from our primary) and we use it nearly every weekend.  We do not rent it out.  I think it would be very difficult to consider it our "vacation home" if we were juggling the issues of maintaining a rental property.

Your bolded statement above is our goal.  The vacation home is decorated with family treasures that didn't fit the "theme" or space of our primary home.  It is always ready for our arrival and stocked with everything we need and enjoy.  I couldn't bear the thought of stripping out both personal effects and valuables to accommodate renters.

To us, "ours like our home" means:
We can bring our pets!  We tote both dog and parrot each weekend rather than placing them at boarding facilities as we do for timeshare travel.  
No defined check-in or check-out times.  Come and go as we please.
No waitlists, planning or black-out dates!  It is always "booked" for us, year-round.
No occupancy rules.  We occasionally host large gatherings at the vacation home.  If guests want to bring an RV and stay for a few days we have plenty of space for that.
Oh, wait ... the list above sounds familiar.  I've typed this out before ... LINK to related thread with my thoughts in post 14.  Have fun with your shopping, considerations, balancing and "what if" planning!


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## EZ-ED (Sep 16, 2012)

ciscogizmo1 said:


> I'm looking to buy a permanent vacation home.   I have an opportunity to buy in one place that has good rental history but I'd have to fly to it.  The other possibility is within driving distance but rental history is not as strong.  What would you pick?  Do you go solely based on profit/loss?  Or do you assume you'll take a loss?  I'm not 100% sure we are doing this investment.  Would like a place to go to escape work and stuff?  We timeshare but we want something a little more flexible and something that is ours like our home.  I guess, we are more homebodies than anything.



If you were to use your future vacation home for over 14 days a year you lose the tax benefit of depreciation and deducting maintenance/repairs and any other costs associated with your rental (or so I have been advised a couple of years ago). So for your purposes the unit with the better rental history that you would have to fly to would probably be the better choice.


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## VivianLynne (Sep 16, 2012)

Jim,
I had to laugh as to your referencing my thread on the "CON" side. 

I am sure your wife and her family have had many memories of "The Lake House" her father had owned. I hope this has not discourage you all from remodeling it and building even MORE HAPPY times for the family.

OP --- deciding between the two - is the old FLY or DRIVE argument? When I was looking at it years ago, I had a dog. I ONLY had weekends with a lousy 2 week vacation off from work. I was single and EVERYONE else I knew was about a penny shy of penny-less. I was pushed in this direction as I paid too much in income taxes, did NOT need a bigger primary residence and skiing in Vermont was too far away to drive several times a month.

Now, 35 years later .... I am still single, have lots more vacation time, no dog, don't ski anymore (ill knee, too much weight, 35 years older), solved the income tax issue (less income), got a REALLY big primary residence, and basicly spend the winters in Florida - flying there takes the same length of time as driving to the vacation house.

My house is almost rebuilt. 6 months 2 weeks of my life revolving around that. I worked yesterday and will later today for 6-7 hours on my normal "bring income home in work" which I am behind in here. My construction guy was off this past week and this coming week for his only child's (a daughter's) wedding in Florida. Today is her (and his) BIG DAY - doing that walk down aisle!

*BUT* I have had lots of time to reflect on the memories I had over all those years at that house. Friends, family, boyfriends, grad school (lived there a bit while going to Lehigh), dogs, some great neighbors (all gone over the years - some to changes in life, so to the great beyond). Made some new memories recently, too - as I look at what the house will be in the next several decades. It has been strange to look at pictures where the trees are 2 inch in diameter sticks and now the wooded lot has 10-12 inch OAK trees with a canopy covering the roof and lot. Sitting on the deck now is sitting in the woods, shaded and with much privacy (also the deck layout was changed 15-18 years ago). 

As for YOUR DECISION: FLY with great rental history or DRIVE with lesser rental history ==> where will YOU be in the next 5-10 years in your life? If you will most likely move to the area with the FLY option - even for part of your retirement years, that should be considered. If your family is growing up and everyone will have activities pulling them in 6 directions in a few years, a drive to house is more flexible than having to change airline reservations. If YOU must have the rents to cover costs, what happens if the rents drop off to nothing or you have to upgrade the furniture - timeshares should have showed what happens if your unit looks beat or a new boy enters the market.
And if you are depreciating the house because YOU are getting rents, IT will all be recaptured when you sell it ... at the then current tax percentages.

Personally, I don't think it is a good idea to HAVE TO RENT THE HOUSE to cover the payments. But that is my personal opinion.

PS. I have lost almost 15 pounds due to my rebuild the vacation house. I find I am not home long enough to stock my refrigerator and I am too tired to eat much up in the Poconos. Oh, and did I mention, STRESS.


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## BoaterMike (Sep 16, 2012)

EZ-ED said:


> If you were to use your future vacation home for over 14 days a year you lose the tax benefit of depreciation and deducting maintenance/repairs and any other costs associated with your rental (or so I have been advised a couple of years ago). So for your purposes the unit with the better rental history that you would have to fly to would probably be the better choice.


Valid point.  For clarification, it's 14 days or 10% of the days rented (at fair market),  whichever is greater.    And, if you are there on the property making improvements, cleaning or performing maintenance, those days are not counted toward the personal use.   

Mike


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## Timeshare Von (Sep 16, 2012)

Personally I have no experience, but can share my mom's experience.

After my dad died in 1979, my mom started to need her own personal getaway.  Living & working in the NoVA/DC Metro area, she opted to buy a newly built cottage down near Reedville, VA on the Wicomico River.

I think it took her about 2-3 hours to get there.  In the summer months she took every Friday off so she could drive down on Thursday evening after work (avoiding I95 on Fridays!).  She spent every weekend there for many years.

It was the perfect arrangement for her, at that point in her life.  After remarriage & divorce, she later sold that cottage as well as the family home in McLean when she decided to relocate to Williamsburg.

Until the day she died, I think she regretted selling her cottage getaway and having that special place to go.


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## easyrider (Sep 16, 2012)

Vacation homes can be a great investment, a big hassel or both. They get trashed, looted and some renters are a pain.

I would rather multi week TS and avoid doing anything other than showing up and having fun.


Bill


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## spencersmama (Sep 16, 2012)

I don't own a vacation home, but have quite a few friends that do.  They mostly own condos on the beach.  Because they are condos, they have to pay monthly maintenance fees, but the fees cover the upkeep of the grounds.  That saves them time to enjoy being at the condo when they are there rather than dealing with the upkeep.  Because the area near us is a big vacation spot, most of the condos have in house rental agencies and cleaning contracts.  I think some of them pay as much as half of the rental fees to the agents, though.

That said, everyone I know that rented out their beach condos or homes either stopped renting them or bought a second one (one to rent, one for personal use) when the market was low.  You lose the spontaneity of being able to stop by your own place if you have a free weekend.  A lot of them got tired of having to block out time to use their own place a year or more in advance.  

Another friend kept spices and condiments in the fridge for when they stayed there.  She had a renter call her and tell her that she wanted a refund on her rental fees because there was a bottle of ketchup in the fridge that the renter used that was beyond it's expiration date. The ketchup "made her sick."  

My next door neighbor owned a three bed room ocean front condo in an exclusive area with a high rental fee.  He decided to stop renting it out when a father rented the condo for his son and his friends on spring break from high school.  The 17 and 18 year old kids were there completely unsupervised and completely trashed the place, including throwing the flat screen tv off the balcony one night.  The father denied the damage was from their rental week and they ended up in court over it.  

And, on top of all that, if your extended family knows you have a vacation home, they will all come out of the woodwork wanting to stay at your place for free!  

Personally, I'd get a cheaper place within driving distance that I don't have to rent.  Then you can take advantage of using it on long weekends and those days here and there that you just want to "get away."


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## JudyH (Sep 17, 2012)

My good friend has had a second home at the beach for years.  They rent it out July and Aug, except they get one week in July.

They spend 80 hours every spring cleaning it and getting it ready for rental in the summer.  They use it some.... in Sept and Oct.

It always needs exterior repainting, new AC, new appliances....

They still love it.


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## ciscogizmo1 (Sep 17, 2012)

Thanks everyone for your insights.  My husband and I read all of them with great interest and discussed them in length.

Well, we decided to buy the fly to location and put in an offer hopefully, they will accept.

While we love the drive to location we discovered that we really couldn't use it in the winter.   It gets its best rental in the Winter and Summer.  So, when we can use it we'll probably need to rent it out.  We are looking long term for place to retire in 10 years but we don't want to gamble that prices will come down.  We have the money now so, we are going to go for it.  Plus, the fly to location has a great onsite agent so, it is almost like a timeshare.  They take care of everything which is awesome.  So, when we do visit it won't feel like we have to do maintenance and repair work.   That is one of the things that really attracted me to timesharing.  

Hopefully, the offer will be accepted if not back to the drawing board...


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## richardbenisty (Apr 16, 2015)

There are very many variables. You have to decide if you want strictly an investment or a place to vacation and possibly use rental fees to offset the the cost of maintenance, utilities, home owner fees and some of your debt service.

If you are interested in positive cash flow, chances are you will need to look in an area with a long rental season and have enough of a down payment to keep your debt service on the low side. And, if you are after positive cash, then you probably not able to use the vr in peak season as you will be giving up revenue every time you use the property.


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## Holly (Apr 17, 2015)

*We love it*

We bought a house up in Woodstock, NY three years ago and it has changed our lives...literally.  The downside of it is that I want to spend all the time I can up there, and I'm not nearly as involved in timesharing as I once was.  It's 90 miles from our home in Brooklyn and we go up as much as we can, and spend pretty much the whole summer.  We've made friends, my daughter is on a summer swim team...we just love it.  It's definitely an expense, and we bought it for an investment and ended up loving it.  We have let good friends use it a few times and that has worked out fine.


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## e.bram (Apr 17, 2015)

Buy OCEANFRONT! It will appreciate over time.


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