Luxury house on a lake in California

Your Guide to Buying a Vacation Home

Thinking about buying a vacation home? Whether you’re dreaming of investing in property in Hawaii, Florida, California, Arizona, or somewhere else entirely, there are a lot of factors to consider before you buy. Our guide can help you answer the big questions and determine which type of property is right for your dream vacation home!

Should You Buy a Vacation Home?

From deciding how you’ll use your vacation property to calculating the true costs of ownership, here are some things to think about before hiring a real estate agent!

Examine Your Lifestyle

Luxury vacation home in Park City, UT. Photo by Instagram user @hookeduphomes
Photo via @hookeduphomes

One of the top reasons to buy a vacation home is if you find yourself planning trips to the same beach, ski lodge, or secluded getaway each year. Once you’ve discovered a location you just can’t get enough of, it might be time to stop renting. But is a second home a wise investment? Would you be staying at your vacation home enough to get your money’s worth? Do you have the time required to manage a rental property if you won’t be there? If you can’t answer “Yes” to these questions, continuing to rent a vacation home may be the better option. You can also explore fractional ownership options like a timeshare. While this option has gotten a bad rap over the years, there are ways to make a timeshare worth it!

Do a Test Run

Vacation villa with pool in Orlando, FL. Photo by Instagram user @magicalvacationhomes
Photo via @magicalvacationhomes

How well do you know the area you want to buy in? What’s it like in the off-season? Do you like the weather year-round? Are there loud neighbors next door? There’s a lot you won’t know about your second home if you only visit the area once or twice a year. That’s why a smart vacation home investment tip is to spend some serious time there or at least survey other owners in the area.

Decide What’s Important to You

Row of lake houses on Caroga Lake, NY. Photo by Instagram user @speakinglens
Photo via @speakinglens

Think about what you would need in a vacation home. Do you want a location with quick access to the airport? Would you prefer an upgraded kitchen? Are you looking for great views? Will you need extra space for guests? While the list of what to look for in a vacation home will be different for each person, determine which vacation property features are at the top of your wish list before you buy.

Think About Long-Term Goals

Luxury condo building in Fisher Island, FL. Photo by Instagram user @arialuxerealty
Photo via @arialuxerealty

Buying a second home is your dream today, but what about tomorrow? Are you purchasing something that you intend to use for years to come? If not, have you explored the market to ensure you’re strategically investing in vacation rental properties where you’ll see a large return? Is there the possibility to turn your vacation home into a retirement property? Draft a plan of how you’d like use and manage the property for the next five to ten years before you settle on a vacation home.

Calculate the True Cost of Ownership

Cottage with pool in Hamptons, NY. Photo by Instagram user @somethingtostyleover
Photo via @somethingtostyleover

Start by using a mortgage calculator to get an idea of major expenses first. Make sure to also factor in monthly utility costs like heating and air, electricity, gas and water, trash, and cable/internet access. Depending on how you’ll use your second home, other expenses could include:

  • furnishing and appliances
  • home insurance
  • property taxes and HOA fees
  • cleaning and maintenance services
  • rental management services
  • travel expenses

Explore Rental Options

A-frame cabin in Ashford, WA. Photo by Instagram user @airbnb
Photo via @airbnb

Another thing to think about when buying a vacation home is whether or not you’ll want to rent your property out when you’re not using it. Vacation rental owners can utilize countless online resources like HomeAwayVrboVacasaFlipKey, and Airbnb to list and rent out property for a service fee. It’s a great way to make money off of your property throughout the year when you’re not staying there.

What Type of Vacation Home Is Right For You?

Curious about the different types of vacations homes you can choose from? When it comes to finding your dream property, there are a lot of options to mull over!

Beach House

Beach house in Folly Beach, SC. Photo by Instagram user @avocetproperties
Photo via @avocetproperties

Whether you’re dreaming of the elegance of The Hamptons, the grassy beaches of South Carolina, or the nearby amenities of an oceanside cottage in California, buying a beach house is one way to see a solid return on your investment. Not only will you get to enjoy the privacy and spaciousness of owning a single-family home or villa with an unbeatable view, but these features will make your beach cottage attractive to prospective renters as well. These waterfront properties are some of the most in demand vacation homes, so be ready to pay a pretty penny upfront!

Countryside Cabin

A-frame cabin in California at night. Photo by Instagram user @cozycabingetaways
Photo via @cozycabingetaways

If your ideal vacation spot is somewhere more secluded, consider investing in a cabin, cottage, or tiny house in the woods. With this option, you may have to give up close proximity to restaurants, grocery stores, and other city amenities, but it’s worth it if you love beautiful views, exploring the great outdoors, and roasting s’mores over a fire pit at night. Cabins and tiny homes are also in high demand for eco-friendly rentals and renters who want to reconnect with nature, so keep that in mind!

Mountain Lodge

Mountain lodge in snow in Big Sky, MT. Photo by Instagram user @naturalretreats
Photo via @naturalretreats

A mountainside vacation home might be perfect if you’re making frequent trips to ski or snowboard each winter. Whether you want to purchase a condo within a larger lodge or you’re hoping to find a chalet where you can ski in and out, this is an excellent option for buyers wanting quick access to top winter sports destinations. Mountain vacation homes near ski resorts are also hot among renters!

Lake House

Lake house at Lake Sammamish, WA. Photo by Instagram user @hoppergroup
Photo via @hoppergroup

Love fishing, boating, and water sports? Buy a vacation house on a lake! Not only are there plenty of incredible fishing lakes and boating lakes, but a lake house is also a great way to live on the water without having to pay coastal property prices. In addition, lakes generally have fewer tourists than beaches, so you’ll get to enjoy a quieter vacation spot—especially if you find a home on a private lake instead of a public lake. Of course, the weather around lakeside homes can be unpredictable, so make sure you enjoy being here in the off-season or have a rental plan before investing.

Snowbird Escape

Luxury Southwestern-style ranch home in Arcadia, AZ. Photo by Instagram user @dustinmiverson
Photo via @dustinmiverson

If you’re trying to escape the harsh winters in your hometown, investing in a vacation home somewhere warm could solve your cold weather woes! Arizona and Florida are some of the top destinations for those looking for seasonal second homes, but depending upon your budget, you could purchase a single-family home, townhome, villa, or condo almost anywhere in the Southwest or Southeast! Just be sure to make a plan for where you’ll stay or how you’ll rent it out during the months you’re not there.

Urban Condo

Luxury condo interior in New York City, NY. Photo by Instagram user @kennethg_realestate
Photo via @kennethg_realestate

Enjoy big city life but not year-round? Have a job that takes you to opposite coasts often? Buy a second home that adds some joy and luxury to your life! Purchasing a condo in a high rise in the heart of the city will put you near job opportunities, top-rated restaurants, exciting entertainment, and more. While city condos may not be the typical vacation rental property, urban rentals can generate a large profit—especially when listed on short-term rental sites like Airbnb.

Still not sure if buying a vacation home is right for you? Take a trip somewhere new while you decide. Explore these 17 unique vacation ideas or go on a national park road trip!

Pinterest infographic: Buying Vacation Homes