Last updated on June 22, 2021
What are the best vacation properties to buy? You may be asking yourself this very question if you are considering purchasing a vacation property. Should you purchase a house with room for the whole family or a condo in the interest of reducing the burden that comes with home ownership? Or perhaps a timeshare to avoid a larger cash outlay? In this article we take a closer look at the most common recreational property types and, in particular, the pros and cons of owning a vacation home, condo, timeshare or other vacation property type.
Best Vacation Properties to Buy: Preliminary Considerations
The first thing you should ask yourself is the reason behind buying a vacation property. Have you always dreamed of owning a vacation property? Having a place to escape the busy city life or a place to pass down to your children? Or are you simply looking to make a savvy real estate investment? Perhaps you are looking at renting out your property short term on Airbnb or VRBO.
The answer to these questions will help determine the appropriate vacation property type for you. For instance, if you’re seeking seclusion then perhaps a remote cabin is the best choice. If, on the other hand, you are looking to use the property only occasionally and otherwise want to rent it out short term, you may wish to buy a turn-key condo. If you are purchasing a vacation property as a lifestyle choice rather than an investment and are fine with limited use then perhaps a timeshare is appropriate.
In short, the motivation behind your purchase is an important factor to consider.
From there, budgetary considerations, owner involvement and other matters described below need to be taken into account.
Vacation Home: King of the Castle
When considering the best vacation properties to buy, the analysis should begin with a vacation home. As a homeowner in Canada or the United States, you not only own the house but also the land on which the house is situated. As “king of the castle” you are not subject to the same restrictions that come with owning a condo or other strata property. But owning a home also comes at a cost. Some of the pros and cons of owning a vacation home include:
- More space/privacy
- Unique compared to a condo
- More customizable through personal design touches
- Higher purchase price (see how far your dollar goes across Canada here)
- Higher maintenance and utilities costs
- Tougher to rent out short term
Bonus: annoy your friends by referring to your vacation home as a chalet, villa, compound or other pretentious description to show what a big deal you are!
Vacation Condo: Anything You Can Do I Can Do Better
As an owner of a condo, you own the interior space of your unit whereas common areas and outdoor spaces are owned in common with the other owners in your building. Monthly strata fees will cover the general expenses of the strata and in some cases special assessments will be levied when major repairs to the common areas and building exterior are required. If the strata is well run, owning a condo can be a lot less work and responsibility. Some of the pros and cons of owning a vacation condo include:
- Lower purchase price compared to a house
- Lower maintenance costs
- Amenities on site
- Easier to rent out short term
- Better security
- Less space/privacy
- Less control
- Strata by-laws may restrict use
Bonus: if you buy a top floor unit you can brag to all your friends that you own a penthouse 😉
Timeshare: It’s a Lifestyle Choice
With a timeshare, you own a portion of a vacation property that you can use on a limited basis, usually once a year.
Depending upon the type of timeshare (fixed week, floating etc.), your usage rights may vary slightly. For these reasons, a timeshare is more of a lifestyle purchase than an investment. No matter the type of timeshare, be sure to take some time before completing a purchase, as buying a timeshare can often be an emotional decision. What seemed like a great idea following the consumption of five margaritas may turn into a feeling of regret. Some of the pros and cons of owning a timeshare include:
- Less responsibility
- Affordable (pay for use model)
- Certainty as to where and when to take your vacation
- Annual fees
- No control over the property
- Difficult to resell
Bonus: a free meal likely awaits anyone willing to
suffer through attend a timeshare sales presentation!
Other Vacation Property Types
- Townhouse/Duplex – if you’re looking for the conveniences of a condo but with more space and privacy then this may be a good option. You’ll also have your own private entrance without the need for an elevator typically seen in condo towers. Unlike a house, however, you won’t have any physical separation from your neighbors and will typically have a smaller yard, if any.
- Fractional Ownership – fractional ownership involves several buyers that each holds an equal part of the title. This differs from timeshares where property title is 100% owned by the principal owner. With fractional ownership you are also often allowed to use the property for a longer period of time than timeshares. For these reasons, fractional ownership is a legitimate investment with opportunity to see an increase in the value of your fractional ownership over time.
- Water Access Only – the obvious benefit to water access only property is privacy, yet remoteness and inaccessibility may deter many buyers. Simple conveniences like restaurants and grocery stores may be difficult to access. Such properties may also be inaccessible by first responders in the case of an emergency.
- Leasehold – a buyer of leasehold property will have an exclusive right to occupy the property for a specified period, in some cases up to 99 years or more. At the end of the lease, the right to occupy the property reverts to the owner.
Other things to consider
- Are you particularly handy? If not, you may want to steer clear of buying an older home.
- How much time do you have to devote to care and maintenance? If you do not want to be very hands on then you should consider buying a newer condo or hiring a property management company.
- How accessible is the property? If its further than a two hour drive, do you have someone locally that can assist in the case of an emergency?
- Have you visited the location you’re interested in? If not, a lot of insight can be gained by renting a comparable property in the area before taking the plunge and completing a purchase.
- Do your due diligence no matter what type of recreational property you are purchasing. A complete home inspection will be important when purchasing a home and reviewing the strata by-laws and recent minutes will be important when purchasing a condo. For timeshares, be sure to read all of the relevant documentation to understand exactly what you’re buying into.
Purchasing a vacation property is the realization of a lifelong dream for many. Depending upon the type of property, it’s also a significant financial undertaking and time commitment. Before making any such purchase, be sure to consider the motivation for your purchase, your budget, your ability and willingness to handle maintenance and the other items noted above.
So what are the best vacation properties to buy? If this article has shown anything, it’s that there are many questions and other considerations that need to be taken into account. Many of us at Vacation Property Online wrestled with these very questions before taking the plunge. After having asked these questions, completed our due diligence and made the purchase, we can assure you that it has been a very rewarding experience. Happy hunting!