Your Own Private Hideaway: Vacation Homes
Being a homeowner is great, but let’s say you’ve finally decided your city is just too cold in the winter and that you’d love to have a second house to escape to – a warm place, maybe a place with a beach nearby. If you’ve decided to pursue buying a second home, where do you start?

Vacation homes are huge in recent years. In 2014 alone, an estimated 1.13 million vacation homes were sold in the US, making up some 21% of residential transactions for the year. You might be wondering, are all of these second homebuyers just fabulously wealthy? Wealth certainly doesn’t hurt when buying a home, but neither does being informed and having a plan.

The appeal of a vacation home is that you would only reside there for a portion of the year – maybe just a month or a week – but the rest of the year it could be accumulating income for you, helping to lower the burden of that mortgage. Renting out the vacation home can be big business, particularly if it’s located in a resort town or other desirable location.

The big problem with renting out a property without being physically there is that things can go wrong, big things like busted water pipes, and no one will be around to fix them. It’s not necessarily as easy as just owning the property and listing it on AirBNB or VRBO; a property manager is necessary in most cases to maintain a semblance of cleanliness and to ensure that doors properly shut and raccoons haven’t decided to live in the attic.

It’s also important to know the rules of the area. Rental income is taxable, and if you’re doing short-term rentals of six months or less, your state and county could consider you to be an innkeeper – meaning you’d have to pay the same lodging taxes as hotels. In addition, not every home can be used as a rental property. Cities, HOAs, and condo associations might have regulations in place to ensure that their community isn’t solely comprised of short-term renters coming and going. In South Carolina, for instance, beach town property taxes can betwice as high for non-residents as for residents.

As any homeowner knows, maintenance and upkeep costs for a house can quickly add up, and vacation homes are no exception. Beaches in particular are hard on homes with a relentless assault of sun, salt, and wind. Windows, roofs, and A/C units need replacement and can quickly drain that supplemental rental income that at first seemed so attractive.

But hey, it’s not all doom and gloom. The point of a vacation home is to have fun, right? If you approach it with a level head and look beyond the allure of your very own property in that vacation spot you love more than the sun loves the stars, then it’s absolutely possible to make a little money while maintaining your private hideaway. As long as you have a local looking after the place when you’re not around, it sure beats battling other skiers for a room near the slopes each ski season.

Have thoughts on vacation homes? Want to keep the conversation going? Leave a comment below!