A vacation home is meant to offer a place of relaxation and rejuvenation, a break from the normal stresses of everyday life. However, owning a vacation home also comes with some challenges that you may not realize. If you are considering investing in a vacation home, here are a few things you should be aware of!
Because of the “luxury” aspect of vacation homes, the mortgages of these properties may actually be significantly higher than that of your normal house. Vacation homes are usually located in areas with higher property values—beach fronts, big cities, mountainsides, etc. This also means higher living expenses and higher expenditure for building and furnishing the home as well as making it functional. In addition, the required taxes on vacation properties are higher than average: for houses that you intend to rent out to others, renting for more than 14 days requires you to pay federal taxes on the income you receive from those rentals.
Keeping Up With Maintenance
Every house—regardless of its frequency of use—needs to be maintained in order to stay safe and functional. Letting your house sit for weeks or months on end with no upkeep will quickly turn your house into a repair project rather than a getaway. Vacation homeowners should schedule frequent, routine maintenance to ensure their home’s health: the roof and ventilation should be inspected, landscaping should be cared for, and plumbing should be checked for leaks. Even driveway paving can deteriorate without proper maintenance. While your property does not sustain as much impact as your normal home does, each of these tasks is still necessary, as one accident or problem left unresolved can cause serious, expensive issues in the future.
Lack of Flexibility
If your vacation home is located far away from your residential home, the vacation home becomes less of a “quick getaway” and more of a “planned trip.” Furthermore, if you intend to rent out the vacation home as a secondary source of income, the time that your own home is free for your use is limited. You and tourists share the same interest in the most popular vacation weeks of the year: over holidays, during the summer or winter breaks, seasons with good weather, etc. The more weeks you rent, the more income you get and the greater the value of the investment to you, which means you may not be able to utilize your own home on the very weeks you would most like to!
A vacation home can be very much worth the cost and time required, but it is helpful to know what exactly is entailed in owning one. Keep these things in mind as you move forward to obtain your dream vacation spot!
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