Sure, you are probably looking more for stocking stuffers than a mountain chalet right now. But, if the onset of ski season has you hankering for a refuge from Saturday morning gridlock, read on for a fast list of what’s good and not-so-good about owning a vacation home.
Pros
- A place to create family memories where you don’t have to pack up a new suitcase for every visit.You can bring your dog, cat, or pet boa constrictor. You have a sense of home and relaxation being around your own stuff.
- Possible appreciation of the home.
- Availability of the place any time you want (unless you are doing rentals to offset the cost).
- Getting to be a part of the community in your second hometown.
- An asset to pass down to your kids.
Cons (and I have a bunch)
- You will feel like you should vacation only at this one place because you have so much money tied up into the purchase price and ongoing bills.
- Upkeep and maintenance. Ask me about my $30,000 mold mitigation project in 2020 from a tiny water leak that didn’t get detected for 3 weeks.
- Although the property may appreciate, second home markets have volatile price ups and downs. In a recession the first thing people who lose their jobs try to dump is their second home. This can drive down the price quickly (Covid recession notwithstanding, but look at 2001 and 2008 for other examples).
- Ongoing costs eat into the profitability of your investment. HOA dues (Don’t get me started on surprise multi-thousand dollar assessments.), utilities, mortgage interest, Wifi, repairs. All of these have to be paid regardless of how often you use the home. Which brings me to…
- You will NEVER use the house as much as you think you will. Unless you are an active Air BnB host (which can be a full time job or just unprofitable), the home will sit empty way more than you imagined. Your kids’ activities, work obligations, school schedules, and general life will conspire to keep you at your primary residence more than you imagine.
- An asset to pass down to your kids (see next week’s blog).
You probably aren’t convinced by my arguments one way or another. People do what they want, as anyone in the advice business will say. But as a long time mountain property owner who has seen the ups (very fun!) and the downs, I have two words for you: Season Rental.
