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Should You Buy a Vacation House? We Did, Here’s Why… No Regrets

Vacation cabin on the ocean

Last summer we bought a vacation house. It’s a boat-access waterfront cabin (pictured above). It’s an old one-bedroom cabin.  We didn’t buy it for the cabin. We bought it for the location and dock.  It’s a summer house.  Yeah, sure we’ll use the cabin of course but we’ll mostly be outside swimming, boating, hiking, lounging, fishing, kayaking, grilling and whatever else we can do on a waterfront property with pretty much a forested mountain behind us.

It wasn’t cheap. We learned a lot about buying a cabin in the process.  We had been looking for a vacation property for a few years.  We’re glad it took a while because we’re very happy with what we ended up with.

Reasons we bought a vacation house

Why did we buy a vacation house? Here are our reasons… some are more important than others.

1. Available for us anytime 24/7/365

Initially, we looked at places 6 hours’ drive from our home.  We figured we could go up for a few weeks or longer every summer.  In fact, we put an offer on a place but were outbid.  The vacation house we ended up with is much, much closer.  While it requires a boat to get there (our boat is at a marina ten minutes from our house), the entire trip takes only 40 minutes. That means we can jet up there for a weekend or even just the day.  It’s so convenient.

Because it’s our cabin we don’t have to worry about whether it’s available. We don’t have to book it.  It’s always there and always available.  It’s super convenient.

2. Friends can visit or use it for themselves

Because it’s ours there’s no issue inviting friends, whether one family or having a massive party.  Sure, if you rent an Airbnb you can have friends visit but it takes a bit of planning.  Because it’s our place, we can go any time. We can go last minute. We can invite who we want when we want.

Moreover, if we’re not using it, we have no problem handing the keys over to someone to use it for a vacation.  It’s just sitting there. We’re not going to rent it out on Airbnb… that would be too difficult since it’s a boat access property.  So we might as well extend the opportunity to friends.

3. No booking hassle

I’ve booked a lot of vacations in my day. Hotels. Airbnbs.  I’ve done it all.  It takes time.  I’m particular about where I stay. I figure it’s going to cost a lot of money anyway so I might as well get a place I like.  Finding the ideal hotel and/or Airbnb takes time. My first choice may not be available. That means trying again. In a nutshell I’ve spent hours and hours booking vacations.

Now, just because we have a vacation property doesn’t mean we won’t travel. We will.  I’m not totally free of having to book vacations.  It’s just that we’ll probably go on fewer short vacations.  We now have our main family vacation spot.

4. Keep all our stuff there (less to pack)

This is a huge reason for investing in a vacation property.  Packing sucks especially if you have kids. It always adds up to mountains of stuff.  With our own place, it’s not so bad. We keep much of what we’ll need at the cabin so we don’t have to take much with us when we go up.

5. Free vacations (once paid off)

Right now it’s not free. We financed a part of the vacation property but in due course it’ll be paid off which means a free vacation house.   Okay, not entirely free. There’s maintenance costs and property taxes to pay but assuming we use it regularly, it’ll be a good deal.

6. Hand it down to kids

A waterfront property like this is something that can be handed down in the family.  It’s not easy to come by these properties. It’s a legacy house. I know the cabin itself isn’t all that great but the property is. Maybe in twenty years we’ll rebuild something better.  Either way, our kids get to enjoy while young kids but also as adults and beyond.

7. Family vacation spot – create memories

Vacation house deck

One of two main decks overlooking the water at our summer vacation house.

Growing up my parents had a vacation property. I loved it. I loved going to the same place every summer. We had our summer friends.  It made for great memories. I’m happy to be able to do the same for our kids.  It’ll be our summer place.  We expect to spend quite a bit of time up there in the summer.

8. Investment

We’re biased, but we have a hunch demand for cabins in our area will continue to increase. It’s waterfront.  It’s 30 to 40 minutes from downtown Vancouver.  While it requires a boat, I have no doubt it will increase in value quite a bit over the next few decades.  If I’m wrong, at least we still get a vacation house we love.

Is a vacation home a good investment?

It really depends.  There are so many variables it’s impossible to say.  For us, the investment aspect was secondary. We wanted a place close-by that we could use.  That’s most important.  If it goes up in value that’s a bonus. I doubt it’ll go down in value… waterfront doesn’t typically go down in value.

One analysis some financial planners put forward is that you could rent some pretty sweet vacation properties for the amount buying a vacation property costs every year.  And while that’s very true, once a vacation property is paid off, you have a sizeable asset (although perhaps not terribly liquid).

And then there’s the potential rental income which is a fairly new phenomenon thanks to online vacation rental websites.  This probably contributed to increasing real estate prices but at the same time it makes vacation properties a viable option for more people because the rent helps pay the mortgage.  The potential rental income overall helps make vacation properties a good investment.

If you want a vacation property strictly as an investment, you need to carefully crunch the numbers.  It’s a considerable analysis.  For us, because we wanted it as a vacation home for our family, we didn’t crunch the numbers at all. I bet it’ll prove to be a good investment in the long, long run but it really is a vacation property for us to use.

Let me put it this way… I’m not sure I’d buy a vacation property strictly as an investment.  I think there are better options out there such as properties you can rent year-around.  It seems to me that vacation properties are worth getting if you plan to use it personally… even if just a week or two per year and renting it out the rest of the time.  It offers some utility then; some personal enjoyment.  That to me makes a vacation property a worthy investment.

9. Potential rental income

Right now the potential for rental income is bad because it’s boat access.  Sure, I could include the ride to the house but I didn’t buy it so that I could ferry people to the house.  However, currently, there is a water taxi in the area.  In fact, there are two.  I wouldn’t be surprised if more pop up over the next decade or two so that getting to and from the many boat-access properties in around Vancouver is easier.

And who knows… maybe if I retire, I’ll enjoy ferrying people up to the house.  It would be something to do. I love boating and renting the place could put a few extra bucks in our pocket.

But buying a vacation property isn’t without its problems…

While I love having a summer home, it’s not with problems either.  I’d be remiss to pen this article without listing out the disadvantages of having a vacation house. Here they are:

1. A lot of work

Taking care of your main house takes up a lot of time.  Adding on a vacation property means two properties to maintain.  It’s a lot of work.  With us, we also have to deal with a boat.  No sooner did we buy our vacation house did we have to hire a contractor to do quite a bit of work on the decks.  It’s still being done.  That’s just for starters. As an old Off-the-grid cabin, there is no end to how much time, money and effort we could put into it.  I could go on and on but you can well imagine that having another property is a lot more work.

2. Fewer trips

We will probably take fewer trips because we have a vacation house.  We’ll still travel; we have some places we want to take the kids such as several places throughout North America, Europe (several European vacations), South and Central America to name a few.  However, instead of looking for big summer vacation destinations each summer, we’ll just go to our vacation house.

3. Costly

Vacation properties aren’t cheap to buy.  On top of that are improvements, maintenance and property taxes.  By the time it’s paid off, that will add up to a lot of money that could end up a sizeable nest egg.  The annual mortgage payment could easily finance a pretty sweet vacation.  It’s definitely costly for now but once paid off and it’s gone up in value (assuming it goes up in value), it should pay off financially.

4. Difficult to finance and insure

This was a big surprise for us.  For example, the bank required 35% down.  Another bank we approached wanted 50% down.  That’s a lot higher than a typical residential house purchase.  On top of that, it was not cheap nor easy to get insurance.  Insurance companies charge more if it’s vacant much of the year. Moreover, because of increase forest fire problems in our province, the cost to insure has gone up. Let’s just say that insuring this property is very, very expensive… more than the property taxes.

5. Not as nice as many Airbnbs and/or hotels

Interior of our vacation cabin on the water

The simple rustic interior of our watefront vacation cabin.

You see the cabin above. It’s not a five-star building.  The property is five-star but not the accommodations.  With Airbnb you can stay at some amazing places. We certainly have. Houses that are a million times nicer than our family home. In fact, it’s fun staying in places that we could never afford.

Then there are hotels with all the amenities and services. I love hotels; the pool, hot tub, room service…  I love it all.  I can tell you that our vacation house is not as nice as a lot of hotels.  I suppose if we rebuilt we could build something spectacular, but that won’t be cheap.  The cost to barge in materials alone will cost a fortune.

Do we have any regrets?

None. No regrets.  It took some effort buying a boat, getting a marina slip and we will have to put some work into the property over the next few years, but it’s definitely going to be a fun place to get away to in the summer.