The real cost of a vacation home

By Kevin Theissen

Have you ever considered buying a property in your favorite vacation spot? 

If you are practical, maybe you’re tired of paying high rental prices. Or your family needs more room than you can get in a hotel or reasonably priced vacation rental. Or maybe you just want a place for your family to gather whenever it’s convenient. Or a place where you can leave your equipment and not have to lug around so much?

Or if you are a dreamer and thinking, ah, vacation time. Beautiful sights, beautiful sounds, beautiful homes. If there is one thing that we all do on vacation, it’s dream. How great would it be to own a vacation home in one of the most beautiful places on Earth? Maybe you could just have a look at some real estate prices. Couldn’t hurt, right?

Actually, it could. In the top-five destinations in the U.S., the average home price is nearly a half a million dollars, plus expenses. You could spend that money today on a new vacation home. It’s what you want, right?

Today, there are a lot of cash offers on local properties — particularly those close to Killington and Okemo resorts.

But what if instead of buying that home, you invested that money? Half a million dollars, earning a hypothetical 6% rate of return over 20 years, could grow to more than $1.6 million. Now, 20 years later, would you rather have a vacation home that may or may not have appreciated in value, or $1.6 million? Think about which choice is right for you, right now, and in the future.

Kevin Theissen is the owner of HWC Financial in Ludlow.