There has been a lot of talk about the booming vacation home market over the last year or so. Some of the boom has been spurred on by the COVID-19 pandemic and its potential to create a permanent remote workforce that was only supposed to be home temporarily. All the talk of a vacation home boom leads to the question of where to actually buy or build.
Many people who invest in vacation homes choose properties that are in some way related to a preferred vacation activity. Avid skiers might hire Sparano + Mooney to design a luxury mountain modern ski lodge in Park City, Utah. Enthusiastic golfers might look around for existing homes in golf communities just begging for people to come in and buy vacant properties.
Of course, there are lots of vacation activities to choose from. Vacationers to the Carolinas’ Outer Banks tend to be big fans of sailing and windsurfing. Buyers who purchase homes along the Great Lakes tend to be avid boaters and anglers. The list goes on and on.
Trends Come and Go
If there is any danger to buying or building a vacation home based on a preferred activity, it is the fact the trends come and go. Golf communities are a prime example. From the mid-1980s through the close of the nineties, golf was booming as a sport. Everybody and his brother played. Meanwhile, builders were using golf courses as anchor amenities to sell luxury properties. But it didn’t last.
When the 2008 housing crash hit and the economy collapsed, golf began to die. It was too expensive for middle-class Americans who were just trying to keep their heads above water. Developers in the midst of building golf communities suddenly found themselves with lots of land they could not sell.
At the peak of the decline, hundreds of courses were closing at any given time. Some course owners were donating their properties to local and state governments to get tax breaks. Others were closing and trying to sell the property to housing developers. Some eight hundred courses closed in the decade ending in 2016.
Now however, golf seems to be on the rebound. So are vacation homes built in and around golf communities. According to a recent MSN News post, as many as 64% of buyers looking to invest in vacation homes were interested in golf communities. But will the interest in golf last?
A Long-Term Investment
Home buyers always have to remember that vacation homes represent a long-term investment that could make or break one’s finances. The vacation market itself is up-and-down. It is strong for a few years, then weak for a few more. Buyers have to be ready to absorb those ups and downs over many years of ownership.
As for choosing a vacation home based on a preferred activity, there is some risk to that as well. Maybe you are an avid skier to whom Park City, Utah seems like a slice of paradise. But how old are you? Will you still be skiing 20 years from now? And if not, perhaps your family might be interested in taking over the home at some point. Then again, they might not be.
Vacation homes are attractive for many reasons. They represent the opportunity to own your piece of getaway property in whatever location you love most. But owning a vacation home is not all sunshine and roses, and there are risks and downsides. The wise investor carefully considers both sides of the equation before spending hard earned money on a second residential property.