7 Smart Tips for Buying the Perfect Vacation Home


Vacation home sales are on the rise, and many investors are starting to see that vacation homes are a good, safe investment. I have put together a few tips that will help you along the buying process in your search for the perfect vacation home.

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7 Tips for Buying the Perfect Vacation Home

1. Choose the Location Carefully

The very first question you should be able to answer when buying a vacation home is, “Where do I want my home located?” The best way to answer this question is to ask yourself, “What is my main purpose in owing a vacation home?”

Is the main purpose for you and your family to enjoy the house as a family? If so, then you will probably look to buy a vacation home near where you live or in an area that offers a lot of activities that you and your family enjoy.

Related: 6 Amenities to Ensure Repeat Business in Your Vacation Rental

If the main reason is for rental income, then you will want to look at the most popular destination areas in the United States, such as Orlando or a popular beach spot. If you are purchasing a vacation home for true investment purposes, only then will you also want to check out projected growth rates of different communities. After all, the more popular an area is, the more your vacation home will appreciate.

2. Rent Before You Buy

Before you buy a vacation home, you should rent a place in that area first for at least 2 weeks. Make sure you and your family like the area, and you should also have a good idea of what part of the area or town you would like to own a vacation home in.

For example, here in Orlando there are vacation homes spread out all over the place. You might find that you like the shops and restaurants better in Kissimmee than you do Davenport, but you will only know this if you spend time in the area.

3. Buy Under Your Budget

When considering various vacation homes, don’t fall into the trap of trying to purchase a more expensive property than you can afford. Buying a house that you cannot afford causes STRESS, and most people go on vacation to relieve themselves of stress.

My recommendation for every new vacation homeowner is to buy a vacation home that is on the cheaper side, and then if you use the property a lot, you can always sell that vacation home and upgrade to a bigger one.

4. Understand Your Family Dynamics

This was a big one for my wife and me. We have three kids, and when they were young, we bought a vacation home near our house. We used it all the time. However, as the kids got older, we used the house less and less. With all the kids playing sports on the weekends, friends sleeping over, church and school activities, there was just not enough time.

So look at your family dynamics, and decide if owning a place is right for you and your family, or whether you’d be better off working out a rental agreement with an owner or two in the area that you like.

5. Tax Implications

There are a few things which are certain in life, and paying taxes is one of them. Therefore, when you buy a vacation home, it is important to look into what the tax implications of owning that property are. If you are going to rent the property out, you will need to pay income taxes on the income you receive.

The property taxes are usually much higher here in Florida if you are purchasing a second home, as you will not be able to homestead the property. A qualified real estate agent should be able to help you in this area. One of my clients was able to save a couple of thousand dollars a year by buying a vacation home just outside the city limits.

6. Take a Conservative Approach When Estimating Rental Income

If you are purchasing a property for mainly an investment purpose, be very conservative when estimating rental income.

You will also want to do your homework on what the expenses are going to be. It is also safe to estimate that repairs should be at 1.5% of the value of the house. So if you buy a $100,000 vacation home, you should budget for at least $1500 a year in repairs.

Some years might be higher, some might be lower, but this is a good rule of thumb. When doing your homework on the income and expenses of the property to get your true return on your investment, be conservative; don’t put your family in a bad economic situation.

7. Don’t Get Caught Up in the Moment

If a friend, family member or another investor brings you an opportunity to buy a vacation home, do your homework.

Related: How to Market Your Vacation Rental to Ensure Maximum Bookings

If this is your first investment property, don’t buy land with aspirations of building a grand vacation home on it. Sure, it sounds romantic, but there are many of horror stories of investors who have done this over the years.

Also, don’t be pressured to buy. If someone is giving you a hard sales pitch on why you should buy the property, there is probably a good reason they are doing this. Slow down, take your time — and do your homework. If it is a good deal, then move forward, but only after you have truly dove in and run the numbers yourself. Sometimes people have alternative motives, even people close to you.


All in all, buying a vacation home is a good investment, but be cautious and conservative with your approach. I suggest that even the most seasoned real estate investor work with a real estate agent who knows the area that you are looking to purchase a property in. This agent will probably save you a lot of heartache and time, as compared to you trying to do it yourself.

Do you own a vacation home? What would you add to my list?

Leave me a comment below!

About Author

Trey Duling

Trey Duling has been managing and marketing vacation homes in the Orlando and Disney World area since 2001. His passion is helping investors make their vacation homes more profitable. Please visit his website at http://www.orlandovacation.com/home-rentals/.


  1. Number 2 and 4 were spot on for me. I’ve rented in Big Bear, CA for the past 10 years and finally bought a vacation rental there since are family visits so often. We finally decided to buy because we wanted free vacations. We researched the area a lot talking with property managers and realtors and got a lot of really good advice about the area and what type of property to look for. Great article and spot on!

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