Why You Don’t Want to Buy That Vacation Home.

downside of vacation home ownership
Head's up, there could be affiliate links ahead!

the cons of owning a second home

In the past, my husband and I owned a beautiful 3 bed, 3 bath lake house, 2 hours outside of LA. For the first couple of years we LOVED it and got a ton of use out of it. But it was at a high cost. Not only did we have to pay for the house and furnish it, there were also a lot of upfront costs for repairs and upgrades to make it truly our own. The investment was huge, but initially, the payoff was, too.

buying a vacation home

But after few years, our enjoyment of the house started to decline. Getting up on weekends was difficult, the area didn’t offer much to do outside of playing in the lake and it was a lot of work maintaining two homes. We were starting to feel the burden of owning a second home when we felt compelled to spend every vacation there to justify the cost. Then in 2013, we suffered a break in and it was never the same. We sold the house that summer at a $40K loss and never looked back.

While I don’t regret that experience, I’ll never take on the hassle of a 2nd home again. Now with AirBnb and VRBO, you can rent homes so easily and experience new places every time you go away. Also, you’re not responsible for replacing the roof, plowing the road in winter or preventing critters from making themselves at home in your walls.

The Cost of Ownership

vacation home buying

Our lake house cost about $4K per month including everything from mortgage and utilities to seasonal snow plowing. That works out to $132 a day per year.  When you consider we spent an average of 65 days a year there (including weekends and one or two full week stays), that means we were paying about $48K per year for the house, but only utilizing approximately $8,580 of that cost. Think of all the amazing vacations and getaways you could go on with a $48K annual budget!

Alternatives to Ownership

While the idea of owning a second home can sound romantic, the idea of maintaining two properties, packing, unpacking and packing again as well as cleaning two homes can take its toll. The vacation home market can also be very volatile and in a down market, it can take a long time to offload an unwanted property. If you have the hankering to have a getaway spot, run the numbers on the cost of ownership vs the cost of renting only when you need it. If you want something you can use over an extended period, consider renting a home for a season, which is the best way to concentrate your investment during prime time usability without having to carry the cost and burden of the home in the off season.

If that doesn’t suffice, I’ve also heard of several families sharing one vacation property where the cost of ownership and the burden of upkeep is shared among the owners. I love this idea, particularly for areas like Lake Tahoe where people come for different reasons. It’s a ski town in the winter (which I would never partake in), but it’s an awesome summer destination as well. How great would it be to have two families that prefer primary ownership based on the season?

don't buy a vacation home

Thinking about renting the house part-time to defray the cost?

This can be a reasonable strategy for defraying cost of ownership, but I wouldn’t buy a home on the assumption that your rental fees will cover your costs.  Here’s why:

  • You won’t have 100% occupancy consistently, so it’s hard to gauge what your returns will be month to month
  • You will inevitably run into hassles with renters.  We’ve had furniture destroyed,  garbage left in the house, noise complaints, oh and there was that time when someone left their crack pipe in our master bedroom.
  • You will not be close by when issues come up, so you’ll need to pay a property management company to deal with 2 am plumbing emergencies.
  • Your neighbors that don’t rent their properties will come to hate you for renting yours.  I promise you this.

Bottom line, before you think about buying a vacation home, consider if it would make more sense just to rent.  When you purchase a second home, you’re paying for 100% of the possible usage time, yet most people use their 2nd homes only 30% of the time or less.  That means you’re paying for something that’s not being capitalized on, at least 70% of the time.  Renting will not only reduce your out-of-pocket expenses, it will also save you tremendous complexity and hassle. If you’re hell bent on buying, try fractional ownership with another family to defray cost and maintenance while increasing overall utilization time.

Thinking of buying a vacation home? Factor utilization time into your cost of ownership. Click To Tweet



This post may include affiliate links.


You may also like


  1. Ouch! Yeah, a second home is always a big responsibility (aka headache). I can see the allure of owning one, but all I would see are the costs! I agree; I think renting is a much better move, especially if you’re trying to be financially independent.

    1. Oh, there’s totally an allure to owning a second home. In theory, it’s pretty awesome. In reality, it’s just another toilet that will eventually get clogged. Never again.

  2. That is so smart and it is from someone who has been there. While we could afford the cost easily I can’t afford the time and hassle. I can rent a house as you suggest or a luxo hotel anytime I want and I’ll never have to wash a dish, or cook a meal or sweep a floor. Plus I’m not geographically tied down. I have many friends with vacation houses but it only seems to be a net plus for my ultra wealthy friends who have four or five houses and a staff to care for them. That’s not where I am so I think I’ll just stick with the one paid for house and let someone else make the beds and wash the sheets.

      1. I was either blessed or cursed to have several 8 figure and one nine figure friend (as in billionaire!). They are all surprisingly normal except for owning their own islands, private jets and the multiple houses at Aspen, etc. But in conversation none were ever condescending. They also were extremely hard working and very bright. The funniest thing though was they were always asking me to contribute money to their favorite causes and while I’m FI I’m much more the millionaire next door level playa than a real tycoon like them.