There are many things you can buy that amount to status symbols. For example, you might purchase yourself a Rolex watch that you can flash every time you leave the house. Having something that expensive on your wrist is a bold declaration of the kind of disposable income you have.
If you get something like that, it will garner some attention, and presumably, that’s what you want. Some billionaires do precisely the opposite, though. They dress very casually and plainly to disguise how much money they have.
If you have some disposable income, and you feel like you want something more practical than a high-end watch or an expensive sports car, a vacation home might top your list. There are certainly some notable negatives as well as positives that go along with it, so let’s talk about them right now.
You Can Make Some Memories There
If you’re going to get something with your disposable income and use it as a status symbol, it might be something like a Harley Davidson if you like a little danger on the weekends. You might even get some motorcycle camping gear if you like the idea of motoring down the highway, finding a camping site, and stretching out by the fire with the stars overhead.
However, doing something like that is probably only suitable if you’re single. If you married someone or you’re cohabitating, and if you have some kids, you’ll probably want to get something all of you can enjoy if you’re not selfish.
If you buy a vacation home, that’s a place where you and the whole family can go on the weekends sometimes. You might get a house on the Jersey shore and spend long, hot summer days there, playing on your private beach or having BBQs with friends.
This is appealing because of the memories you can start to build. Later on in life, when the children are grown, you might look back at the time spent in your vacation home as some of the happiest of your life.
You Have to Carry the Tax Burden
On the flip side, if you do elect to buy a vacation property, you will have to carry the tax burden that goes along with it. If you buy the house outright, you won’t have mortgage payments about which to worry. However, you will have to pay hefty property taxes on the place every year, and that can be a significant bite when tax time rolls around.
If you can’t buy the property outright, you’re probably putting some money down and getting a mortgage. Say that you also have a house that’s your primary residence, and you have mortgage payments on that as well, not to mention school taxes and homeowner’s insurance. If so, paying taxes on that vacation home might feel like too much of a burden.
Renting Out the Property
There is a possible solution, though. If you enjoy the idea of having that vacation home because it can be a status symbol and emblematic of your overall opulent lifestyle, you might buy it outright and then rent it for part of the year. Again, going back to the Jersey shore idea, perhaps you purchase a property in Cape May or Avalon.
Maybe you want to be there three months out of the year, but the rest of the time, the place will sit empty. You can contact a rental company and have them manage it for you if some individuals or families want to rent it the rest of that time.
In places like Cape May or Avalon, the town comes to life in the summer. The rest of the year, there are not as many people there, and since the weather is cold, not as many individuals want to stay in those houses.
Still, you might be able to rent out your property there to someone who wants to pay less to stay in a picturesque location. They can’t afford to stay in the house during the busy summer tourist season, but they will pay a nominal fee to remain there during the off-months.
This can be a way you have your vacation home, yet you’re making a little money off of it to even out those property taxes. In this sense, buying a vacation home can improve your lifestyle and make your family happy, and it won’t be so much of a financial burden.