The Pros and Cons of Buying a Vacation Home

Family playing in pool

Many people dream about having a second home or vacation home. The idea that we can easily get away to a different location and escape our everyday lives seems appealing for most. When considering whether or not to purchase a vacation home, there are general pros and cons to consider.


  • Vacation properties are more likely to maintain or increase value because they are located in high demand areas with a geographically limited supply. You may be able to obtain higher yields from a vacation home vs. a traditional rental property.
  • Rental income can be generated by using a professional company or sites such as Airbnb. Be sure to speak with a tax professional to stay current on important details concerning the tax laws and what operating expenses you would be eligible to deduct.
  • Owning a second home and having the ability to return to the same place time and time again can be comforting. It creates a sense of familiarity and memories that can last a lifetime. Purchasing a vacation home can even help to provide a great head start on narrowing down a retirement location in the future.


  • Higher interest rates and down payments are often required in an effort to reduce the risk if the borrower were to default. In short, the initial costs associated to purchasing and later furnishing the property can be costly.
  • The travel time can become exhausting or becoming bored of going to the same place can later be an issue. What was once a great place to visit may not be as enjoyable in the future.
  • This type of ownership can create a financial burden due to the monthly expenses and maintenance costs. Doing chores yourself can take the fun out of a getaway and it may not be feasible to hire a professional to complete repairs or prepare the property for the season.

If you are considering purchasing a vacation home, you will want to determine the location by visiting the area several times during all seasons of the year. It is also recommended to do your research on factors such as price trends, development projects, and access to highways and airports. Find out if there are amenities nearby such as lakes, rivers, trails, ski slopes, golf courses, local shops, restaurants, or tourist attractions.

Happy house hunting!