Reply to Do you think a vacation home is a good investment?

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[quote=Anonymous][quote=Anonymous]Homes in vacation areas rarely appreciate like primary residences and are more subject to headwinds in the broader economy.  When the economy is weak, vacation property values suffer much more than primary residences.

If you're speaking of a property to rent out when not using it personally, you're speaking of a business and the amount of income you derive from it will depend on your business acumen, the amount of effort you put into it, your overhead, and the strength and consistency of demand for rentals in that location.  Whether the ROI will be superior to more liquid investments in the equity and bond markets is difficult to predict, but one consideration is that an individual rental property is a single highly concentrated asset, which iin investment terms is always highly risky.  [/quote]

This is a good answer. We have a vacation home we use a lot and don't rent out. It has appreciated considerably, but we did not expect that...the values in the area just exploded during COVID and seem unlikely to decrease. But our initial criterion was simply likelihood to hold value and wanting a place that we would use.

As someone who basically won the vacation home lottery, I would not recommend one primarily as an investment vehicle. Maybe if you enjoy and are good at property management, but it's still risky. It's a house, so there will be overhead in time and money associated with upkeep. For us, those would not be worth it if we didn't get enjoyment out of the house itself.[/quote]

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