For many people, buying a second home or a vacation home is part and parcel of the American dream – a place where you can unwind with family and enjoy some well-deserved leisure time. If you’re planning to buy a home away from home, just be sure that you can manage the expenses of two homes.
As with any major financial decision, there are oodles of pros and cons to consider. How you weigh them will help you decide whether your new home will be a place where you can relax and unwind, or one that winds up stressing you out.
On the upside, vacation homes can be a great place to get away, decompress and take your mind off the stresses and strains of everyday life. They can also be a convenient family gathering spot where you can enjoy a vacation and yet feel instantly at home. You might be able to offset some of your mortgage expenses by renting the home when you’re not using it. And a second home could prove to be a good long-term investment, especially if the property appreciates in value or if you plan to live there when you retire.
On the downside, buying a second home may put an unhealthy dent in your savings and a strain on your finances. This could limit your flexibility for spending money on other things or taking vacations elsewhere. And aside from a second mortgage, you’ll also need to factor in the time and money you’ll need to spend taking care of a second set of monthly bills, regular maintenance and repair issues. As with your primary residence, if you have a leaky roof or the furnace breaks down, you’re responsible for it.
Weigh the pros and cons
If you can afford it, buying a second home can be a good decision and a good investment to boot. But before you jump in, be sure to factor in the time and costs involved. One of our financial advisors will be happy to help you consider how it may affect your overall financial well-being and plans for retirement.
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