The Finance Blogger

For years now we have been renting vacation homes in various countries in North and South America. However the majority of experience has been in California. Also in Arizona were most Canadians and northern US residents spend their time during the cold winter months. The question we have always asked ourselves is whether it is better to rent or to actually go and purchase a vacation home. We decided some time ago that it was better to rent vacation homes. We like to try different places and travel around to various states.

Vacation Home Prices Dropping

But recently with the price of homes coming down so much we are wondering if it is better to own a place. Next year we are going to rent a condo for three months. It is going to cost us $8000 for the three months which is quite a bit. Now this is a nice place with three pools, hot tubs and  tennis courts. Also underground parking and within walking distance to many restaurants and bars. We are pretty happy with the unit as well since we rent it every year. However this will be the first time we take it for three months.

The Costs Can Add Up for a Vacation Home

When you add taxes, condo fees, utility fees and insurance we wondering if the cost begins to approach this $8000 number. Would we better off with something we owned. Right now the condo we rent is worth approximately $250k, so taxes should be around the $4000 a year range. We are told that condo fees are approximately $300 a month or $3600 which includes water. That leaves insurance, electricity, heating and maintenance while we are not there.  With this quick analysis we are over the $8000 number and then some. So it probably does not make sense to buy a vacation home unless we were going to rent it out.

The problem with renting it out is that if you rent it to people who are trying to get away from the cold weather up north. They want the same time we want the unit. So renting it does not seem to work very well in a situation like that. If we decided to purchase the condo, we would want to use it as much as possible. Which just adds to our travel cost. Based on the numbers I think we will continue renting vacation homes.

We wrote a post two weeks ago entitled, “Should we purchase a vacation home” and based our analysis more on emotional issues instead of financial ones. it is good to see that not only did we make the right decision emotionally we made the right decision for us financially as well.

Problems Renting Vacation Homes

Many people buy a vacation home because they have had problems with rentals being badly equipped, or being very dirty and needing cleaning. We have not had this problem , although we did get to preview a unit before we decided and choose one that was clean. We have been renting the same unit for the past 10 years in California. Other condos that we rented have had some problems such as being dirty and needing a thorough cleaning. One unit we rented, we had to go an purchases glasses and towels to dry the dishes. We were able to get  our money back, but really if the condo is well run, this should not be a problem.

We have heard of horror stores when it comes to renting vacation homes so it pays to do your home work, talk to previous tenants, get references and so on. If you do not you risk the chance that you will be disappointed or face a lot of work cleaning up someone else’s mess.

We are interested in hearing what other people have to say about their experiences renting vacation homes. Good well written comments about this subject will be approved, while anything less than that will be picked up by our spam filter.

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