Is a Summer House Worth the Investment?
Who doesn’t want somewhere special to relax on holidays and vacations? A summer house is a term frequently used to describe a vacation house. It’s somewhere you stay on long weekends, family trips, and just to get away from it all. These homes are usually located away from cities, either near parks, lakes, the ocean, or a favorite natural destination.
Many people own summer homes as a second home, but some own a summer home in addition to renting a property. Why would someone rent and own at the same time? Namely, the location. These individuals work in the city, so they rent a property nearby for a quick commute. On top of this, they own a summer home to have a place to stay outside of the city when they need a break from the hustle and bustle of city life.
Summer homes are certainly a nice luxury, but are they worth the investment? Is this a smart idea for a first-time homebuyer or a more experienced property owner? There are a lot of things to consider before you hit the road in search of your dream summer home.
Why Consider a Summer Home?
Why might a summer home be a smart idea for you? It all comes down to your motives. If you’re buying this property as an investment with a strategy to make it work for your financially, then there is a lot more potential. However, if you’re just looking for a fun place to make memories, you might be better off renting, at least in the short-term.
Summer homes are usually purchased in areas the buyer is already familiar with. Owning outside of an urban area is a different type of investment, and there will be additional property taxes, maintenance, and more that will need to be at the forefront of your decision.
Ultimately, a summer home is an investment you can really enjoy with your friends and family. You can’t say that about other types of investments. Even if you’re unable to turn a profit, there’s a lot to love about having a place to spend your summers (and beyond).
Earn a Profit on Your Summer Home
If you do decide to pursue purchasing a summer home, you’re probably wondering how to best make it work for you financially. First, recognize that owning an investment property, especially an investment vacation property, is a lot of work. It’s much more than qualifying for a mortgage and adding an Airbnb listing when you’re not using the home.
You’ll need to factor in the cost of maintenance, repairs, taxes, and more. At the end of the day, all of this likely will cost more than it would have been to rent the space in the first place for your vacation. If you don’t live there full-time, the home will be more prone to problems, and you might need to hire a property manager.
Finally, you’ll need to create a plan for earning a profit if you plan to use your home as a rental property. According to the National Association of Realtors 2018 survey, 30% of vacation property owners planned to use their summer home for short-term rentals. This number is only rising. How much you can possibly make will depend on a number of factors such as where your property is located, it’s size, and the weather throughout the year.
Is Your Summer House Worth It?
At the end of the day, you’ll need to decide for yourself if owning a summer home is a smart investment. While it’s true this is an investment you can use yourself, it might not be worth the ongoing maintenance, costs, and upkeep.
Decide what’s most important to you. A summer house should make your life more relaxing, not more stressful. There might be better alternatives, especially if you prefer to vacation in different locations. Ultimately, a summer home isn’t always the walk in the park it sounds like.
To the right buyer, a summer home can be a dream come true. If you have a strong rental strategy and a local property manager, you might even earn a pretty penny on top of your vacation home. Is a summer home right for you?