The Desire for Vacation Property

It’s officially summer here now with the forecast high finally into the 30+ range right before the July long weekend.  So now a lot of people start heading out to their cottages/cabins more often and their guests start to think: I could get used to this and vacation property lust starts to kick in.

Despite the initial reaction to the contrary I do get vacation property lust myself once in a while.  My parents have had a cabin now for about a decade so I’ve been very familiar with the lifestyle and even I have to admit there is something about the place that is just relaxing to be at.

Yet what is is really like to own a second property?  Well to be honest from what I’ve seen it is a bit of pain in the ass if you already have a house to look after.  Maintaining two sets of yards sucks when you have a short summer already, you will likely have a little trouble remembering what is in each fridge, you will wash a lot of sheets if you have guests, and you can bet your insurance bill just got a lot higher with another property.  Yet is it worth it?

The answer strangely enough can be: yes. You just have to accept up front that a second property will not be an investment, but rather a decision purely based on what makes you happy.  Just don’t have any delusions about the decision being a financially smart one.  Unless you have a huge annual vacation budget already and are willing to give up almost all other travel, you are likely not to break even.  Also your ongoing costs will likely be substantial so your retirement plans will also likely take a setback if you choose to have that vacation property.

Yet a second property doesn’t have to be so bad with a little careful planning.  I’m familiar with one family that recent got a little lot in a wooded valley just 15 minutes from their house.  The yard does not have a lawn to maintain and it is just big enough to have a trailer on the site.  So their total investment is a mere $60 to $80K to have a place they can visit every single weekend in the summer if they want.  It is somewhat of an odd setup, but it does keep their costs down and keeps in mind the big issue of having a cottage is making sure it is close so you use it.

So if you really want that vacation property, go ahead and look at your options.  I would caution that you should interview several existing vacation property owners prior to buying to make sure you know what you are getting into.  Do you have a cottage or cabin?  If so, it it worth it?  If not, do you want one?

10 thoughts on “The Desire for Vacation Property”

  1. I disagree. I think the overall net cost is such that it does not make sense unless you are 100% dedicated to that vacation spot as your only get away or you have so much money that it doesn’t matter. Two examples are an $80,000 property (very modest) as mentioned above or a regular cottage at approx. $200,000.

    Taxes $1,200 – $3,000
    Annual Mortgage Interest Only (5%) $4,000 – $10,000
    Annual Upkeep $1,000 – $3,000
    Gas for every weekend (40L x 1.20 x 20weekends) $960

    The annual cost of such a property would be anywhere from $7,160 to $16,960. This is compared with my regular vacation budget of $6,500. I think that I would need to be pretty dedicated and in love with that property to commit my family to spend every vacation dollar on it every year. This year we are actually renting a cottage for a week ($1,425) and going out East ($6,100). Next year who knows where we will vacation but I know I have options.

  2. My parents just sold our family cottage after 40 years of ownership.

    Cottages can be pretty expensive and a lot of work. It really boils down to how much you will use it. My parents were both teachers and we lived one hour from the cottage so it saw a lot of use.

    I can’t see ever owning a cottage. Lakefront is just too expensive and I want to have the option of going to different places. Owning a cottage really ties you down to one location, which doesn’t interest me.

  3. You definitely need to be committed, but if you find the right spot, it can also be well worth it. When accounting for costs, its true that if you look only at the bottom line you’re on the losing end. But you have to look at the whole picture, and realize that a vacation budget of $6500 is limited to 14-20 of fun, while $16,000 is committed to something that’s both an asset as well as anywhere from 34 days (17 summer weekends) to upwards for 90 days (38 weekends + 2 weeks of vacation).

    Overall, your value for dollar on the vacation property is much higher however, you are indeed committing your family to that spot.

  4. I live in SoCal and have a second place in the mountains. I’ve had it around 15 years. And it’s paid off. I’m co-owners with two other people and we get along great.

    I’ve fixed the cabin the way I want it, tankless water heater, flat screen tv, and redid the kitchen. Though it’s small, it really is a great cabin, everyone loves it.

    Unfortunately, I proposed to my wife there 11 years ago, and because of that she will never want to sell. If I had my way, I’d sell my interest tomorrow. The pipes freeze every year, sometimes break, and other assorted problems. I average at least a $1000/year in the cabin, but use it only once or twice a year.

    For me, I’ve learned a great lesson, along with a boat I used to own–there great when they are someone else’s property. RENT, you’ll come out way ahead.

  5. I have 5 acres in the B.C. Gulf Islands… no cottage on the land yet, and the more I research the cost of building one the more I realize that doing so might push back my desire to retire before 45.

  6. I got an RV and not a vacation property because of not wanting to be tied down to one vacation spot. I know quite a lot of places that are out in the boonies (FLUZ land – same thing as BLM land in the US). My sister lives right on the river outside of Kamloops. I like staying at her place in my own little house on wheels. If I move to a vacation area in the future, it will be to live there full-time, not as a weekend getaway. It’s more likely that I’ll do that over a period of a few years – buy the land, stay out there on the RV for a couple of summers, build a cabin – probably all done very slowly.

  7. I’ve never understood the attraction of holiday homes and can’t imagine ever owning one. Dealing with the maintenance for a primary home is enough of a pain in the rear, being married to a second property does not appeal in the slightest. Plus as Ross says the costs are astronomical and the opportunity cost (never going to Europe!) much higher. Two of my bosses this year are dealing with teenagers who don’t want to go up north, want to stay in the city all summer, which is its own headache! On the other hand a week or twos rental for a cottage in Bracebridge or somewhere is pretty cheap if you share with 6 or 8 friends.

  8. I would never have bought a cottage, but I will say it is great to have one. My wife has an unbelievable property on Lake of the Woods. It is a lot of upkeep, but to be honest I’m not a very good fisherman so I don’t mind cutting the lawn and re-staining the deck every once in awhile. The finances aren’t a deterrent because it obviously didn’t cost either one of us anything. I am very thankful since I am a teacher and she soon will be, that we have the time to enjoy the place.

  9. We purchased a cottage last summer after looking around for almost 2 years.

    Most of what you say is totally true. We are fortunate in that our house in the city is paid for and we can manage the extra costs associated with the cottage. It takes a lot of upkeep as there is always something that needs to replaced or fixed and then there is the money that you spend on toys for the place such as a boat which comes with its own set of costs.

    The salient point I believe is what what you say in the fourth paragraph. A cottage is not a financial investment. Between interest in the mortgage, taxes, insurance upkeep etc. there is no way you will recoup the cost with any appreciation over the time that you own the place.

    That said, we find it to be an investment in our family and the dividends are tremendous. We spend time together and going up every weekend especially in the summer is something we all look forward to with anticiaption. We are out on our boat, make fires at night and go for walks or drives in the area. My younger son started skiing last winter and now I get to spend time with him on the slopes each weekend. We then go back to the cottage, relax have a nice dinner and sit as a family to watch a hockey game. No return on investment can provide the satisfaction that we have garnered from our place.

    Having a vacation property is not for everyone. It is alot of work and you need to be careful so as not to overextend your financial situation. It really is “dead money” from that perspective. If you can afford it though, the non monetary returns can be great.

  10. I bought a twenty year old travel trailer for cheap last December. It stays year round at a park in Cavendish PEI.

    No insurance (not worth it considering how little I spent on it), no real maintenance for me, nice neighbours, close to the beach, and the summers here, not to mention the air quality, are much nicer than where I live (Southern Ontario).

    So, for a very small initial payout, I will get years of enjoyment for less than $2K a year. And I’m not using air conditioning like I would at home.

    Of course, I’m lucky that I am a teacher, so I can really get the most out of this experience.

    I’m typing this from my deck in Cavendish…which is nicer than the one at my house in Stoney Creek. 🙂

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