Choosing a Vacation Home for a Young Family

For a growing family, buying a vacation home is a long-term investment that can provide an immediate boost to Return on Life. There are few ways to use your resources that are more rewarding than creating more memories with the people you love. And real estate investments can be a great way to diversify your portfolio, build your wealth, and enhance your legacy planning.

But doubling up on homeowning responsibilities and getting the most out of a second house is also a major financial and personal commitment. You and your spouse should discuss these questions with your children and your advisor before making your favorite vacation destination a potentially permanent piece of your financial plan.

1. How often will we use a vacation home?

The higher that you and your spouse climb in your careers, and the older your kids grow, the less time you're all going to have to vacation together. As your responsibilities at work increase, your kids' schedules will also start filling up with weekend football tournaments, part-time jobs, volunteer work, and college prep. If the vacation home you're eyeing is more than a quick car ride away from your full-time residence, it might not be feasible to get everyone together for more than a week or two.

Moreover, when your schedules do allow for some extended family time, will you want to spend it in the same spot, year after year? If not, should you really be buying a vacation home and trying your family down? Or would you be better off working with your Licensed Financial Planner to set aside money in a vacation fund that might be able to support multiple trips to multiple destinations for years to come?

2. Will everyone enjoy this vacation home? For how long?

A family vacation home should be centered around things that your family enjoys doing together. But it should also offer a little something for everyone to do on their own, and on days when it's too cold for the beach or too rainy for a hike through the woods.

Also, be careful about going "all-in" on a vacation home that's tied to one or two specific activities, especially if you have young children who are still sorting through potential interests. If the novelty of riding around on a golf cart or smacking tennis balls wears off, your teens aren't going to be excited about spending a week surrounded by country clubs.

3. Is the vacation home large enough to accommodate friends and extended family?

One way to maximize the value of a vacation home is to share it with others. A couple spare bedrooms or a large furnished basement can make it easy to expand your vacation guest list. You might be able to use your vacation home to host special events, like milestone birthday and graduation parties. And, perhaps one day, your grown children will roll up to the house with their own spouses and children, eager to create a new generation of experiences and memories.

4. Are we REALLY ready for this?

Even if you close up your cabin for the winter or declare your beachfront condo a Wi-Fi-free zone, your vacation home is going to add some significant costs to your annual budget: mortgage payments, homeowner’s insurance, utilities, association fees, upkeep, etc.

If you rent out the property when you’re not using it, then you’re taking on a second job: landlord.

Is this the right moment to add to your expenses and to-list? Or should you plot buying a vacation home further down your $Lifeline?

Life-Centered Financial Planning can help you take a more holistic approach to all of your major money decisions. Let’s discuss the best investments you can make in your family’s future.