For many people a vacation home seems like a luxury that is out of reach. A home that is only used a few weeks out of the year and that stays empty for the rest of the time may seem like a waste of money. However, this does not have to be the case. In 2014 alone there were 1.13 vacation homes sold in the US. Vacation homes can actually be great investments that pay off down the road. Here are three reasons to consider buying a vacation home.
For those that enjoy staying in luxury, hotel costs can really add up over the cost of a trip. Five-star hotels average $436 per night. Over the course of a vacation, hotel costs for a family can add up to thousands of dollars. Instead of spending that money on hotel costs, it may make more sense to invest in a home. This is an especially good idea for those who vacation in the same place on an annual basis. Owning a vacation home also reduces the need to eat out for every meal which can also save money.
One misunderstanding that many people have about vacation homes is that they have to sit vacant when the owners are not in town. However, this is not true. One reason to purchase a vacation home is that it can provide a lot of rental income if it is in a desirable area. Renting out a vacation home when it’s not in use can offset many of the costs involved in owning the property and can even turn a profit for the owners. It is important to remember that if the property is rented out for more than 15 days per year, the income must be reported to the IRS. If it is only rented out 14 days or less, there is no need to report the income.
Retirement may not be on your mind when you buy a vacation home, but it’s something that should be factored into your decision. In the future, a vacation home can easily become the home where you retire. Purchasing a home in a sought-after area where property values continue to climb can also be a great investment. Selling a vacation home later down the road can free up some much needed cash after retirement.
There are plenty of reasons to consider investing in a vacation home. Vacation homes can save money on hotels, provide rental income, and can come in handy after retirement.