The New York Times recently published an article that attempts to explore the harsh realities of owning a vacation home. I agree with many of the author’s views. I wanted to comment further because we are now experienced owners of a pre-retirement vacation home. If you have considered purchasing property to use for vacation or weekend living, perhaps you might learn something helpful from this post and/or from the article.
1. Financial Stress. You absolutely should not “stretch” your budget and cash flow to the max to purchase or own a vacation home. Every time you write a check for a mortgage payment, operating expense, or maintenance cost for that weekend home, you will feel it emotionally. Some people attempt to handle a cash flow problem by placing their vacation home into a rental program. That strategy comes with a set of problems of its own. You might end up merely converting financial stress to landlord stress. To avoid this, do not purchase vacation or weekend property unless you can easily cash flow all of the costs without a need for rental income. Don’t compound the stress by forcing yourself to rent and then having to worry about tenant problems and damage.
2. Guilt and Pressure. Many owners of vacation homes have difficulty finding time to get away to their property. This creates guilt and pressure because a significant personal asset is not being used much. There are two ways to handle this problem. First, buy property that is only a short drive from your primary residence. By short drive, I mean 1 to 3 hours, so that it is easy to get away on a Friday afternoon, including on the spur of the moment. Lots of folks want to buy beach homes or ski condos, then find that getting in the car or plane to actually use the home requires advance planning and significant investment of time and money. As a result, the vacation home is not used much at all.
Our lake house is only a 90 minute drive so we can use it even for day trips. More typically, we are there for 3-4 days at time, with the longest stay being ten days (when we host family). If you have to fly or spend a full day driving to your “getaway”, you will likely find that you aren’t “getting away” very often.
3. Poor Environment. The article discusses problems with “neighbors” at vacation home locations. A related problem is understanding if you will have neighbors at all and what they will be like. If your vacation home is in an area that is primarily a tourist destination, you can probably forget about having real neighbors at all. Most of the people around you will be tourists. If you don’t like this concept (and we didn’t), find property in an area where there are (or will be) other retirees – people you can get to know and spend time with. That’s the situation we have. Although we are in a rural area, there are a number of homes around us on the water. Many of the owners live there year-round. We have made some good friends in that group.
A bonus benefit of choosing a vacation home in a good “people” location is that it gives you the opportunity to transition that vacation home to an actual retirement home and destination.
Here is the link to the full article.