Your Vacation Home
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Your Vacation Home


What to consider when deciding whether to rent or buy.

Despite increasingly tight financing and lower inventory than in previous years, vacation homebuyers were active in 2013. According to the National Association of Realtors’ annual poll, 78 percent of vacation home buyers said that it was a good time to purchase real estate, with nearly a third of those buyers intending to purchase another vacation home in the next two years.

But before you snap up a vacation home, consider your basic travel personality. Are you the type who loves to discover new places year after year, or do you long to return to the same place? Would you plan to offset the cost of a vacation home with rental income (and are you prepared for the extra work and maintenance) or would you keep the house exclusively for your own use?

Home-buying trends

According to the National Association of Realtors’ 2013 Investment and Vacation Home Buyers Survey (covering 2012 data), vacation home sales accounted for 11 percent of all home transactions, with the typical vacation-home buyer purchasing a property that was a median distance of 435 miles from their primary residence, and a third of which within 100 miles. Buyers planned to own their vacation property for a median of 10 years. The trend away from distant vacation rentals and toward domestic vacation home purchases, according to the survey, is driven by people’s increasing plan to use their vacation home as a primary residence for future retirement.

Based on data by real estate listing service Trulia, 24/7 Wall Street listed the most popular towns in which to buy a vacation home. Among them: Ocean City, N.J., where prices dropped after Hurricane Sandy; Kissimmee, Fla., a hot destination for short-term rentals because of its proximity to Disney World; and Ocean City, Md., for its popularity as a getaway from Washington, D.C. and for its wide-ranging prices, from $100,000 to more than $1 million.

If you don’t see yourself returning to the same place over and over again, villa rentals—either domestic or international—might be your best option. Check out HomeAway and VRBO for thousands of listings in the U.S. and other countries.

Either way, you’ll want to invest in the right insurance coverage. If you buy, policies like Chubb’s vacation home insurance can be customized, offering discounts for limited use, security patrols and even the fact that you likely keep fewer personal belongings inside. If you rent, consider insurance that can cover you in the event of a medical evacuation, bad weather, errors made by the rental agency or even cancellation for no reason at all.