Can You Justify the Cost of a Vacation Home?

It was love at first sight. While vacationing at a ski resort, the inevitable thought came to mind: "Wouldn't it be fabulous if I owned a home here?"

You imagine the joys: an oasis to escape from the frustrations of work, a shared space to build memories with your family, or a launching pad for skiing and boarding to your heart's content.

Yes, it could be some kinda wonderful. Or would it?

You've found your ideal vacation location, but now you're thinking (smartly) if you can afford it, how you'll manage it, what sacrifices you'll have to make, and what the payoffs are.

Can you justify the cost of a vacation home?

An article from CNN last year stated that, because of market fluctuations and uncertainty, buying a second home is no longer the no-brainer investment it once was. The article advised not to buy to invest, but buy to own:

With that advice in mind, here are few pros and cons to consider when justifying the cost of a vacation home.

PROS

Increased Resell Value: In most cases, your investment goes up in value. The CNN article cautioned that you may not profit as much as you initially thought upon selling; however, the general rule of thumb is that property always increases in value.

Enjoy Your Investment: You've invested money in a second home, yet you can still enjoy your investment as you wait for it to grow. A vacation property is unlike shares in a company, which you can't enjoy physically; you can't sit on the front porch and soak in the mountain view.

Become A Local: With your own property, it won't be long before you feel more like a local than a visitor. Granted, even before buying, you should already be familiar with the community, to decrease some of your buying risks. But once you buy that property, you're no longer an outsider.

CONS

Lack Of Control: If you're finances are especially tight, you may want to fill out your vacation home's calendar with as many rentals as possible; this means you must sacrifice using the vacation rental on the hottest dates, such as Christmas or New Years.

Not Enough Revenue: Managing rentals is like running a small business. Unless you like the challenge of handling marketing, advertising, bookkeeping and accounting tasks, then you could be adding too much work on your plate.

(Keep in mind: AlluraDirect.com offers owners extensive consultation and solutions for owners managing reservations and marketing their property.)

Things break and need fixing: Renting your home causes wear and tear, which means occasional trips to the property make repairs. (Though, keep in mind, big ticket items probably won't need replacing as much, such as the fridge or furniture). And if you can locate reputable inresort businesses, you can outsource your cleaning and services.

The cons revolve around renting the place out, as is expected for a second home investment. After reading these pros and cons, you may now be wondering if you'll even spend enough time at the property to justify the costs and effort.

Do the math: could you be saving more money if you rent a first class vacation home during your trip? Or maybe owning a vacation home is truly your dream and you've deemed the expenses worth it.

Take your time to do the homework, and you'll be happier in the long run.