Everything you need to know about buying or renting a weekend home
Wondering whether a vacation home is right for you? Here are five questions to ask before you buy or rent a place.
The COVID-19 pandemic has prompted many of us to rethink the way we take vacations. Some of us have embraced the staycation, setting up movie theaters in our backyards and learning how to create restaurant-quality meals. (Or at least halfway decent sourdough.) Other people have used their vacation time to explore the great outdoors, sharing the trails while staying at least six feet away from other hikers. Now, with another coronavirus summer on the horizon, some families are asking themselves whether the best way to have a low-risk getaway is to buy — or rent — their own vacation home.
“Vacation destinations are very popular right now,” says Amanda Pendleton, a home trends expert at Zillow. “Zillow page views to traditional vacation destinations such as Key West, Florida, or Cape Cod, soared nearly 50% last year. That suggests a lot of people are either considering a second vacation home or remote work is allowing them to put down roots in a vacation destination.”
If you’re thinking about buying or renting a vacation home in 2021, you probably have a lot of questions about the process. We asked Pendleton to answer five questions many people have about vacation rental properties and homes — so take her advice into account the next time you’re scrolling through Zillow (like the people in a certain Saturday Night Live sketch) and asking yourself whether it’s time to invest in real estate.
In this article:
Is it better to buy or rent a vacation home?
Many people assume the decision to rent or buy in your favorite vacation destination is primarily emotional — do you want to buy the kind of home that can be used as the launching pad for family memories, for example, versus spending your vacations at a different rental property every year? While memory-making and other emotional factors should be considered, the question of whether you should rent or buy a vacation house might actually come down to hard, cold numbers.
“The way we typically look at this buy-rent question is with a breakeven analysis,” Pendleton explains. “We’ve found it makes more financial sense to buy versus rent if you plan to stay in the typical US home for two years or more. That equation changes with a vacation home, since chances are, you’re looking at short-term rentals instead of a year-long lease.”
The equation that Pendleton is referring to can be quantified. “Short-term rent, home value appreciation and interest rate play a role in the break even question, along with the hefty transaction costs of buying, then selling, a home. Home shoppers can do the math here. If your short-term rental costs over the course of the year are significantly lower than your mortgage interest costs, plus the additional costs of homeownership like HOA dues and maintenance, then it makes more sense to rent — and vice versa.”
What if the costs of renting and buying factor out to be roughly the same? “If both costs pencil out about the same, it may make sense to buy because you can build equity in the second home.” That said, you should also consider your current financial status — and your long-term financial goals — before making any big purchases on a new vacation house. “If your first home is already paid for, you don’t have any outstanding debt, you have maxed out your retirement savings and any college savings plans, then you’re probably in a solid financial position to shop for a second home.”
How close to home should your vacation home be?
Some vacation buyers want a weekend getaway that can be reached in an hour’s drive. Other people dream about buying a vacation home in a part of the world that they would like to visit more often. Both options have their pros and cons — which means that before you start scrolling real estate listings for your potential vacation home, you should consider both the costs and the benefits associated with buying property in a particular vacation destination.
“Your travel costs are going to be higher if you’re interested in a condo in Hawaii versus a destination you can get to on a tank of gas,” explains Pendleton. “Those travel costs and travel time are also going to limit how often you’ll be able to visit your second home.”
On the other hand, don’t let the idea that you have to buy “close to home” keep you from getting the vacation property of your dreams. If you and your family aren’t the type to enjoy spending every weekend packing up the car so you can make it to your lakeside cabin by lunchtime, why not ask yourself what it would cost to rent or buy that condo in Hawaii? It’s only a vacation if it feels like one, after all — and if you aren’t thrilled with the property, the location or the amount of travel it takes to get there, your vacation home could end up being an expensive chore.
Who takes care of your vacation home when you’re not living in it?
On the subject of chores: If you aren’t planning to use your vacation home every weekend, it’s probably worth asking yourself whether you need someone else to keep an eye on your home when you’re not there. In some cases, setting up a simple video surveillance system or using smart devices like Amazon’s Alexa can help you track what’s going on in (and around) your property. In other cases, you may want to work in tandem with another human.
“You can hire a professional property manager to check in on your home when you’re not living there, and manage any home projects, landscaping or pool maintenance,” Pendleton advises. If you don’t want to hire out, consider asking a friend or relative to lend a hand. “Many second homeowners lean on friends, family and neighbors to do the job.” If you’ve got a friend who is happy to stop by the house now and again to ensure everything is as it should be, make sure to thank them for their efforts. (A case of their favorite beverage goes a long way.)
Should you buy a vacation home with another family?
While sharing the costs of a vacation home with another family might sound tempting, Pendleton suggests thinking carefully before co-buying a vacation home with friends or relatives. “A house share can definitely help make a second home more affordable, but there are thorny issues that you’d want to sort out well ahead of this kind of purchase.”
These issues include:
- How much will each family be putting towards the costs of the home? If one family can afford a larger chunk of the down payment, will they have greater equity in the home?
- How will the day-to-day costs, from utilities to maintenance, be shared? Will these costs be prorated by how much time each family spends in the home?
- What happens if each family uses the home differently? If one family regularly hosts parties that incur greater wear and tear on the home, for example, will they be responsible for more of the maintenance and upkeep costs?
- What happens if one family’s financial situation changes and they can no longer afford to keep up with the mortgage and/or other costs?
- How will any profits from an eventual sale be shared?
If you feel comfortable enough to have these potentially difficult conversations with another family, you might be ready to consider going in with them on a vacation home. (You might also want to talk to a real estate expert and/or a lawyer, just to make sure you’re considering all of the potential hazards.)
Can you save money by renting your vacation home when you’re not using it?
If your investment property is less of a weekend getaway and more of a seasonal escape, you might be able to make a little extra money by renting the property to other vacationers. “Renting your vacation home when you’re not using it is a great way to recoup your costs or even make a profit on your second home,” explains Pendleton.
Of course, becoming a landlord comes with its own expenses — and a little extra work. “You’ll want to factor in additional maintenance costs and property management costs, plus you’ll need to depersonalize the home and ensure it is stocked with all the amenities a renter would need.”
While sites like Airbnb make it easy to turn a vacation home into a vacation rental — and our guide to making money with Airbnb can help you get started — don’t assume you’ll be able to make enough money with your rental to offset the costs of owning the home. “This year we learned how unpredictable rental income can be,” says Pendleton. “Many people were forced to cancel their vacation plans in the early months of the pandemic, which meant vacation homeowners could not rely on this income to make their monthly mortgage payments.”
In short, it’s best to treat your vacation rental as a source of a little passive income , not a primary means of earning money. “If you plan to rent your home to cover certain costs, plan for unpredictability and ensure you can pay all your bills without that rental income.”
About Nicole Dieker
Nicole Dieker has been a full-time freelance writer since 2012, with a focus on personal finance and habit formation. In addition to Haven Life, her work regularly appears at Lifehacker, Bankrate, CreditCards.com, and Vox. Dieker spent five years as a writer and editor for The Billfold, a personal finance blog where people had honest conversations about money, and is the author of Frugal and the Beast: And Other Financial Fairy Tales.Read more by Nicole Dieker
Our editorial policy
Haven Life is a customer-centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our editorial policy
Haven Life is a customer centric life insurance agency that’s backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual). We believe navigating decisions about life insurance, your personal finances and overall wellness can be refreshingly simple.
Our content is created for educational purposes only. Haven Life does not endorse the companies, products, services or strategies discussed here, but we hope they can make your life a little less hard if they are a fit for your situation.
Haven Life is not authorized to give tax, legal or investment advice. This material is not intended to provide, and should not be relied on for tax, legal, or investment advice. Individuals are encouraged to seed advice from their own tax or legal counsel.
Haven Term is a Term Life Insurance Policy (DTC and ICC17DTC in certain states, including NC) issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001 and offered exclusively through Haven Life Insurance Agency, LLC. In NY, Haven Term is DTC-NY 1017. In CA, Haven Term is DTC-CA 042017. Haven Term Simplified is a Simplified Issue Term Life Insurance Policy (ICC19PCM-SI 0819 in certain states, including NC) issued by the C.M. Life Insurance Company, Enfield, CT 06082. Policy and rider form numbers and features may vary by state and may not be available in all states. Our Agency license number in California is OK71922 and in Arkansas 100139527.
MassMutual is rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of Aril 1, 2020 and is subject to change. MassMutual has received different ratings from other rating agencies.
Haven Life Plus (Plus) is the marketing name for the Plus rider, which is included as part of the Haven Term policy and offers access to additional services and benefits at no cost or at a discount. The rider is not available in every state and is subject to change at any time. Neither Haven Life nor MassMutual are responsible for the provision of the benefits and services made accessible under the Plus Rider, which are provided by third party vendors (partners). For more information about Haven Life Plus, please visit: https://havenlife.com/plus
What our customers are saying
Sep 8, 2023
User friendly platform and very easy…
User friendly platform and very easy application process! Super content with Haven Life , consider them when shopping for a policy.
–Gabby Santosread more at
Aug 11, 2023
The ease of the process and speed in getting my application approved was terrific. Highly recommend using them for your insurance needs.
–Martinread more at
Aug 10, 2023
Simple and well-designed process for buying life insurance
Life insurance is an industry that seems stuck in the past - things like completing an application, filling out paperwork, scheduling medical exams, etc. are not handled online at many companies. At Haven Life all of this can be done and tracked online, and I hope that others in the industry will follow suit. Other positives include that pricing was competitive and easily available through an easy online quote. It was also possible to adjust the specifics of the policy throughout the process, even after underwriting was complete - changing my mind on one small detail did not require restarting the process. The underwriting process proceeded quickly. I was easily able to gain access to my lab results online. Etc. The process was easy at every step.
–Calvinread more at
Jul 27, 2023
5 STARS!⭐️ ⭐️⭐️⭐️⭐️ They made everything…
5 STARS!⭐️ ⭐️⭐️⭐️⭐️ They made everything simple, seamless and positive.
–Kayla Counselbaumread more at
Jul 12, 2023
Quick and Easy
Simple process, fast approval with out any exam.
–Colleen McKennaread more at