Is A Vacation Home The Wisest Travel Investment You Can Make?

Luna Ruth

There are  5.7 million vacation homes in the United States. A vacation home is a dwelling, separate from the principal residence, which the owner uses for recreational purposes, including holidays and vacations. It is usually situated in a different location, away from the primary residence. Most vacation property owners rent them out whenever they are not in use. Being a vacation homeowner allows one to enjoy and experience the beauty of a new city while becoming a real estate investor at the same time. The landscape of vacation homes continues to undergo significant changes, with more people realizing the best these homes can yield. Is a vacation home the wisest travel investment you can make? Read this guide to find out.


Related: These Are The Best Countries To Own Vacation Homes In, But It’s Not As Easy As You Think

Reasons to Buy a Vacation Home in Your Favorite Destination

Being a major financial decision, it is important to first understand the benefits as well as the drawbacks that come with owning a vacation home.

Becoming a vacation homeowner provides consistency to hotels and lodgings. Hotels and lodgings are inconsistent. They can shut down, change or transfer ownership, and their prices keep fluctuating, depending on many factors, including seasons. They can be cheap one season and hike in price in another, making them unreliable, especially for people looking to stay on a budget. Also, the hotels have rules, which can be annoying sometimes for visitors looking for somewhere they can feel at home. A vacation home will give one the consistency they need.


A vacation home provides a higher rental income, potential property appreciation, and tax incentives. If one purchases a vacation home in one of the famous safari destinations, the home could turn into a serious money maker. A vacation home can build wealth. Vacation homeowners who don’t primarily rent out their property may qualify for tax breaks.

Owning a vacation home means one can customize the property to meet their needs and preferences. One can even store some of their belongings, such as kids’ toys or beach chairs, so they don’t have to pack them each time they travel.

Over time, one can turn a vacation home into a full-time residence. It could be a great place to spend one’s life after retirement. Buying a vacation home also gives the family a beautiful get-away place.


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Disadvantages of Buying a Vacation Home

It is not wise for everyone to buy a vacation home. One must consider certain things before deciding to buy a vacation home. They include:

Vacations are expensive, especially if one is looking for a property in a famous destination, near a beach, for instance. The median price can be twice the cost of a normal primary residential home. It is important to factor in cost before deciding to buy a vacation home.

Other than mortgage expenses, utility costs, property insurance and taxes, and housing expenses in two different homes apply. It is important to put all the expenses awaiting, into consideration. Calculate all the financial risks before investing in a vacation home.


Unless one is planning to become a vacation homeowner for not less than 5 years, it is not advisable to buy a vacation home. This is because these properties are not liquid assets. To resell them, one must propose a significantly lower amount than their value.

Want to Buy a Vacation Home? Follow These Simple Steps

Go the traditional Way – Research Existing Markets, find a Home, and Talk to a Real Estate Agent.

The traditional rule still applies when buying a vacation home. Visit websites such as Realtor, Zillow, MLS, and RedFin and look for available markets. Compare the varying costs and after coming up with a few choices, talk to a real estate agent. It is important to call the agent and explain everything, including the type of property, goals, and desirable amount one is looking to spend. Planning to rent out the vacation home? Explain that to the real estate agent. This allows the agent to check if the available markets are comfortable with that kind of arrangement.


Find a Property Manager

After deciding to buy a vacation home, finding a property manager is the next step. A property manager will ensure the home is well maintained and that everything is up to date, including taxes and insurance. Someone may be tempted to manage the property on their own to avoid more expenses. But this is a second or third home, and managing it without a professional would be harder than property owners may realize.

Now, it is Time to Invest

One can then go ahead and buy their dream vacation home. Deciding to rent out a vacation property is great, but one doesn’t have to be a landlord. It is possible to invest in vacation rentals without having to set one’s foot on them. Use sites like REITs and Real Estate Crowdsourcing to share dividends and earn passive income from vacation rental properties.

Just like an investment property, buying a vacation home is a long-term commitment and one should put a lot into consideration before deciding to invest. Is it wise to invest in a vacation home? That depends on what one is looking for, finances, goals, and how much one is willing to risk. After all, any investment involves taking risks, and purchasing a vacation isn’t an exemption.

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