Benefits of Owning a Vacation Home
The benefits of owning a vacation home are obvious — it's a place to relax, it contains your own furnishings, you can keep everything you need there and avoid having to pack your bags each time you travel there (unlike going to a hotel or resort area). You know the area well (or will after visiting your vacation home a few times) and, with careful planning when you buy, you'll see the value of your home go up over time.
Many people like to have a vacation home within an hour or two's driving time from their primary homes. This allows them to get out of the city that they dwell in and find their haven close by in any type of weather.
Others choose to have a vacation home in a warm-weather or tropical climate. Something that's easy to get to by plane, train, or automobile from where you live will allow a change of scenery during harsh winter months.
Don't buy a vacation home solely for the appreciation you expect from the investment. Though it likely will appreciate, think of it first as a home where you will want to spend vacations.
Familiarity is extremely important to many people who own a vacation home. Many simply get in a car or board a plane for a long weekend without even packing a bag. Everything they have and need — that extra set of golf clubs, tennis racket, and wardrobe — is already at their vacation home. Instead of having to get to a hotel, check in, and pay for meals at restaurants, you have a warm and friendly setting for yourself, your family, and your friends.
As an estate-planning tool, vacation homes are a great way to gift property out of your estate by gifting percentages of ownership of property to your heirs. By gifting a percentage of ownership each year, you're gradually getting the home out of your estate, which will help decrease the taxes that will have to be paid on your estate upon your death. The appreciation of the home takes place within the estate of your children, grandchildren, or whomever you choose to have as heirs. For tax tips on vacation homes, visit the Internal Revenue Service.