Dreaming of owning a vacation home is a lot of fun. Imagining yourself surrounded by friends and family at your favorite travel destination gives you something to wish for. But dreaming is one thing. Actually pulling the trigger is an entirely different matter. Building a vacation home is not a good idea for everyone.
Buying an existing home is another option. However, the issues most people run into with their vacation homes have little to do with whether they built or purchase. They have to do with the difficulties of owning a second home that has to be paid for and maintained.
Sparano + Mooney is a Utah architectural firm that specializes in mountain modern architecture and passive design in the Beehive State. They do a lot of work for clients looking to build in and near ski resort towns. They recommend considering the following four things before building a vacation home:
1. Why You Want a Second Home
This first consideration may sound a bit obvious, but it’s not. Consider why you really want a second home. Look at motivations below the surface. For example, maybe your primary motivation is being able to spend time with your grandkids during family vacations. That is a wonderful motivation. But will you still use the home once the grandkids are grown and on their own?
Maybe your motivation is a particular activity. You want to build a ski lodge in Park City, Utah because skiing is your thing. That is also a fine motivation. But if you are already in your fifties, can you see yourself continuing to ski in your seventies?
2. How It Will Affect Your Budget
Budgets are everything when it comes to building or buying a vacation home. With a vacation home comes a second mortgage along with property taxes. And make no mistake about it, property taxes tend to be higher in vacation destinations. Can your budget withstand the extra expense? Remember that you will also have to pay for maintenance and repairs as well. Then there’s insurance, which will cost extra, too.
3. Whether or Not You Will Rent
Renting out a vacation home is something that new homeowners often go into without thinking things through. Renting will turn your vacation home into a revenue-generating property. In a best-case scenario, it could even cover mortgage payments. But don’t forget that renters won’t treat your property the same way you do. If you decide to rent, expect your home to be abused. Also expect to pay more for maintenance and repairs.
4. Your Long-Term Goals for the Home
In a perfect world, you would hold on to the newly built vacation home until your death. From there it would be passed on to your children. If you are choosing to build primarily for their benefit, have you asked whether or not they want a vacation home? Because if they don’t, they may turn around and sell the property after you are gone.
Even if your children want to keep the home, they may not be able to. The reality of their own finances may force them to sell. That could be an additional heartbreak on top of losing you.
The point of this post is not to dissuade you from building a vacation home in your favorite destination. Rather, is to encourage you to think things through before you make any decisions. There is a lot to be said about having a second home in a location you love. But there are also downsides. You need to consider every angle.