There’s nothing better than taking a long vacation after months’ worth of hard work in the office. But the average working American only takes about 15 days off per year! Because of this, it’s important to make what little vacation time you do take count.
One of the best ways to maximize your vacation fun is to have a place ready and waiting for you. To do this, you have two options: purchasing a timeshare or investing in a vacation property.
Both have unique benefits that the other can’t offer, but believe it or not, a vacation home is a better long-term investment. To learn the pros and cons of both a timeshare and vacation property, as well as an overview of why the latter is the smarter option, just keep reading!
The Pros of Owning Vacation Property
Although you won’t be at your vacation home all year, you own it. Therefore, you can rent it out any time you want. This means an extra revenue stream for you and your family.
In fact, by renting out your vacation property, you can make back your investment, turning your property into pure profit over time! Then, if you ever want to take a vacation to a different location, you have the money from your property to pay for it.
Yes, you’ll still need to make updates and repairs, but even with expenses, you can expect to make thousands a year on a high-quality vacation rental.
In addition, though there are exceptions to the rule, the vast majority of real estate appreciates in value. Your property will be worth more than what you purchased it for down the line. So you can purchase a vacation home, enjoy it for a decade or two, then sell it and make a profit, even if you haven’t yet paid it off.
Or, if you hold onto your property and pass it down to your children or grandchildren, it will be worth even more when they eventually sell it, if they choose to do so.
The Cons of Owning Vacation Property
One of the major cons of owning a vacation property is, like any home that you own, you’ll need to perform regular upkeep on the property. Everything from mowing the lawn to HVAC maintenance to roof repairs will be your responsibility.
Though maintaining a home can be a highly rewarding experience, there’s no way around it – you’re going to be tasked with a long list of regular chores and expenses. Keep this in mind when making your purchase, as a vacation home located far away from your own will require the hiring of professionals.
Owning your own vacation property can also be expensive. That’s not to say that a timeshare isn’t expensive, but owning a home comes with some unique expenses that you’ll be required to pay. First of which is the downpayment upon purchase.
As with any mortgage, you’ll be able to pay the majority of your home off over time, but you will need to produce the money for a downpayment upfront. It’s also important to note that owning a second home can result in even more fees and expenses.
In addition, you’ll need to pay taxes yearly on the property. You’ll have both property taxes and income taxes, assuming you plan to rent it out when you aren’t using it.
The Pros and Cons of Purchasing a Timeshare
Timeshares typically come in the form of resort-style condominiums. You own it jointly with other vacationers under an agreement in which each group gets the property for a certain amount of time.
There are many benefits of owning a timeshare, some of which include luxury rooms and resort amenities, hassle-free vacation planning, and the ability to revisit your favorite vacation spots as many times as you like. As long as you avoid the timeshare mistakes outlined in this article, you can get a lot out of your timeshare experience.
That said, timeshares also come with their share of downsides, some of which might make you think twice about your decision.
First of all, you aren’t the sole owner, meaning you can’t use it whenever you want, you’re at the mercy of your agreement. You’ll also be saddled with maintenance fees upon purchase, even though it technically isn’t your property. Even if you don’t use your timeshare, you’re responsible for these fees.
Lastly, it’s quite difficult to sell your timeshare, should you decide you no longer want it. This is because the timeshare market is constantly saturated with vacationers attempting to sell their properties – over a million at any given time!
Why a Vacation Property is the Better Choice
A vacation property requires a larger investment, as you’ll have the downpayment and various maintenance to contend with. However, this investment is worth it when you consider that it yields a much greater return than investing in a timeshare.
You can begin renting out your vacation home as soon as your name is on the deed, meaning you can begin pulling in income to pay yourself back right away. You’ll also have the house all to yourself, whenever you want it. Although a timeshare can feel like your space, you share it with other families, which limits your possibilities.
Invest in Your Vacation Time Today
As you can see, purchasing a timeshare comes with some fantastic benefits, but none that match the benefits of owning your own vacation property.
On top of that, owning a vacation home comes with many of the same benefits as a timeshare, except that you have greater freedom and possibility with your vacation. When you break it down, the choice is truly a no-brainer!
Looking for further vacation home advice? Take a moment to browse our blog, we have tips and tricks on everything real estate.