The Finance Blogger

Should We Purchase a Vacation Home

Should We Purchase a Vacation HomeFor years now we have been vacationing in the Palm Springs area of California. We have always rented a motel room. Or in the past few years we have rented a condo for one or two months. We have watched the prices decline significantly since 2008 and have wondered if we should purchase a vacation home or condo. There are all kinds of issues both for and against in terms of purchasing a vacation home. We have agonized over this for some time, especially when we see a place that we really like and imagine being able to visit anytime without needing to arrange to rent a place. Some of these places even come furnished and all we would have to do is move in!

We have spent a lot of time thinking about this issue of should we purchase a vacation home and decided to share some of our thinking with our readers. If you have gone through some of the same analysis and wish to share these comments with us please do. Also we believe that it is a very personal decision, so what works for us will not work for someone else.

Criteria re Should We Purchase a Vacation Home

We considered the following issues as part of our decision to not purchase a vacation home. You may have other reasons and you may say so what, let’s purchase a home anyway:

  • Will the home appreciate in value
  • What is the financial cash flow – mortgage, taxes, utilities, redecoration
  • Would we rent it out when we are not using it
  • Who would look after it while we were not there
  • How often would we use it
  • Would we go to other locations for vacation
  • Will the family come to visit
  • Rental facilities sometimes do not live up to the advertisement
  • Rental facilities can be messy or tired and not very appealing
  • It is someone else’s place

We went back and forth many times regarding whether we should purchase or not and in the end we decided not to purchase a vacation home in Palm Springs. Initially when we made this decision, it was prior to 2008 when real estate prices were booming and homes were increasing in price all over. We decided that buying a vacation home for us was not in the cards because we wanted to try different places and felt that owning a vacation home would hold us back from doing this. If you own a place you feel that you have to use it!

Prices of Vacation Homes have Really Gone Down

Since 2008, the prices of homes and vacation homes in particular have declined a great deal.  Once again we had thoughts about whether we should purchase a vacation home or condo. The prices had decline by more than 50% in some cases ( thank goodness we did not buy prior to 2008) and here we were again assessing whether we should buy a vacation home.

We had been to Mexico and really enjoy our vacation there as well we have visited a number of other locations around the US and always seem to come back to Palm Springs as our go to vacation location. We went through the list of criteria we had set up for ourselves and decided again that purchasing a vacation home was not the right decision for us. Although this time the decision was based on a different reason. Although we still go to other locations and do not want to feel guilty when we are not using our vacation home, we had another reason for not buying a home.

We simply do not want the bother and trouble that owning two homes would present to us. When we rent, we have no issues other than making the decision of whether we are going to rent or not and is the place clean etc. When we are ready we leave and do not have to worry about closing the place up for a long term absence or arranging for someone to look after it for us. It is a no worry vacation. So once again we decided not to buy a vacation home.

What About Long Term Real Estate Investments

Most people buy vacation homes for a place to take a vacation and appreciation is secondary. The long term real estate market in California is still in trouble and although homes have started to come back a bit, they have a long way to go. We could easily have another recession and for us it is not worth the risk of buying real estate unless I planned to hold onto the home for more than 10 or 15 years.

After all was said and done, our decision is to continue to renting and not purchase a vacation rental decision. If you have arrived at the same decision or are following a different direction, we would be interested in your comments and reasoning. Our readers will enjoy learning some of the ideas that went into your decision.

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One Response to “Should We Purchase a Vacation Home”

  1. we have talked to a lot of people about purchasing a vacation home and we think that our unscientific survey is 50 50 in terms of what people are doing. For us we like to rent and not have to be concerned about maintaining two homes. it keeps it simple that way for us.

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