Whether it’s a rustic cabin, seaside cottage, or trendy urban loft, vacation homes offer an alluring prospect. But as with any major investment, there are several factors to consider.
First, it’s important to understand the real cost. In addition to mortgage, insurance, and taxes—which can vary based on the location and amount of time you spend there each year—peripheral costs like maintenance and traveling to and from your vacation home can add up.
Then there is the simple yet easy-to-overlook question of what you hope to gain from owning a vacation home. Here we examine three of Bartlett clients’ top motivators for purchasing a second home, with factors to consider for each.
Family is perhaps the strongest motivator, and for good reason. Vacation homes offer a central place where loved ones can gather, spend time, and make memories. But upon delving into the possibilities, many families learn they have drastically different ideas for how a “getaway” should look, and others decide they can achieve a good level of family togetherness without purchasing a second home. For that reason, it’s critical to talk proactively with your spouse and children about how (and how frequently) you plan to use the space.
Retirement is a complex phase of life that can shift and change over time. Many new retirees wrongly assume that on day one they will want to sit on the beach somewhere instead of adventurously checking items off their bucket list or, conversely, enjoying some well-deserved downtime at home. Some fail to account for their much-later years, when many people are far less interested in traveling or maintaining a property that’s far away from kids and grandkids. Here again, candid communication can mean the difference between experiencing a fulfilled retirement and feeling buyer’s remorse.
Traveling to exotic locations is the spice of life, so remember that if you go “all in” and purchase a vacation home, you will likely feel less inclined to explore new destinations and take on their associated costs. For those with serious wanderlust, creating a general travel budget often makes more sense than taking on a second mortgage. If you decide it’s truly your perfect place, be sure to visit at several different points throughout the year before buying to get a feel for the surrounding community and find interesting things to explore each time you’re there.
If you’ve looked at it from all these angles and you think owning a vacation home is the right move, congratulations! Your Bartlett advisor can help you take a detailed look at your financial plan, explore rental and other options for offsetting costs, and put all the necessary elements in place to enjoy your home away from home for many years to come.