Travel during the summer months can be a fun and relaxing way to get away from the stress of everyday life. A summer vacation home gives you a comfortable place to kick back and relax away from your home and job. If you are considering the purchase of a summer vacation home, it is important to consider the pros and cons of buying a second home for vacations.
Pros of Buying a Summer Vacation Home
There are several benefits you can take advantage of when you purchase a summer vacation home. First and foremost, you might be able to enjoy rental revenue from your second home when you are not using it on vacation. Travel & Leisure found that the average Airbnb user earns $924 a month renting out their home.
On a different money front, owning a vacation home might save you some money. For starters, you can save money by traveling to the same destination each year and cooking meals in the comfort of your own home rather than eating out and wasting leftovers if you do not have a mini-fridge in your hotel room. Additionally, if your summer vacation home is occupied long enough each year, you can deduct the taxes and interest on the mortgage to lower your personal income tax liability.
Finally, that summer vacation home can increase your family's level of joy. Your family can put down roots in a new place while vacationing there each year, and this secondary home can become your primary residence during retirement.
Cons of Buying a Summer Vacation Home
Nothing in this world is perfect. As such, there are cons to buying a summer vacation home you should be aware of before making said purchase. The cost of managing a summer vacation home can make it prohibitive to buy one. In addition to the actual purchase cost, entrusting the care and physical maintenance of the home to contracted parties comes with a monthly or yearly cost.
During economic downturns, tourism is often one of the first industries to suffer. If demand for vacation rentals drops, you could lose the second revenue stream you enjoy as the owner of the home. Beyond that, there is the risk associated with the typical upkeep costs of a home. You will be paying gas, electric, water, TV, and Internet bills for a second home, on top of your primary residence. Keep in mind, this does not include other expenses such as pool cleaners, tree trimmers, and lawn maintenance services.
Finally, there is the risk of renovation and repair costs. As your summer vacation home ages, you will be responsible for new windows, fresh coats of paint, and a new roof. If the dishwasher breaks,
Owning a summer vacation home can be immensely joyful and bring positive experiences. Before making this decision, you should take the time to ensure you have weighed the pros and cons. Your advisor at Manhattan Ridge can help.
The views expressed are not necessarily the opinion of Social Advisors, and should not be construed directly or indirectly, as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.