Budgeting Tips to Buy Your Dream Vacation Home

Owning a home in a resort community can be amazing. Whether it’s a vacation home or a full-time residence, the resort lifestyle offers great perks, from beautiful scenery to lots of things to do. Keep in mind, though, that this is not an inexpensive venture.

Purchase Price

Prices in resort areas are commonly higher than homes in other areas. As with any home, the purchase price of a resort home will depend partly on its size, location, and finishes. In a resort area, however, the home’s location and views can be especially significant. BC11_01-Fire-Pit-FM-0699_s4x3

Because resorts are located in some of the world’s most beautiful places, they will generally cost a lot of money, especially for an ocean view, or a view of the mountains. Also, the most desirable homes in a resort area are typically the ones closest to the area’s activities and amenities. The closer you are to a main attraction (such as a beach or ski slope), the higher the purchase price usually is.

Closing Costs

As with any home purchase, before you must also budget for the cost of closing expenses on your resort home. These might include loan fees, escrow and title fees, inspection reports, and transfer taxes. Before making a resort home purchase, consult a real estate professional, title company, or real estate attorney in the area to get an idea of how much to budget for closing costs.


You’ll need to budget for a monthly mortgage payment. If you’ll use the resort home as a second home, you might be faced with higher mortgage interest rates than those available for a primary residence. Typically, this happens when lenders classify a second home as an “investment property.” Whether this classification is applied to your purchase may depend on how frequently you stay at the home. To know what interest rate is applicable, consult with a lender or two before you buy. oceanreef62


In financially preparing to own a resort home, you must also budget for ongoing home-related expenses. As with any home, you will be responsible for the costs of utilities and any and all ongoing maintenance and repair expenses. Depending on the property, you might also take on expenses for things such as gardeners or a pool-cleaning service in good weather, or driveway and walk-clearing services in snowy conditions.

Two Adirondack style chairs sitting on a wooden deck, facing the shore. There is a large home in the background. Horizontal shot.

Property Tax

You must also pay annual property taxes for the home — which can be a major shock if your previous home was in another state with low property taxes.

Real property taxes are based on the property’s assessed value, but the amount levied depends on the formula used where the home is located. Find out how much the current taxes for the home are by asking a real estate professional in the area or inquiring with the municipality assessing the tax (most likely the County Assessor’s office). Keep in mind that the value of the home will be reassessed periodically (and likely influenced by the purchase price you pay).


You might consider making some income from your resort home by renting it out when you are not using it. Talk to a realtor concerning your options. When budgeting, however, don’t overlook the expenses involved with renting. Unless you have the ability to obtain renters on your own, you’ll likely need to pay a portion of the rental rate to a real estate agent or rental agency. You will also incur housekeeping expenses for clean up between renters. Additionally, keeping the home occupied with renters can be especially difficult to find renters during the resort area’s slow seasons.

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  1. DEFINATELY take into consideration property tax. The taxes are SO much higher on a second home. We had no idea. No one really told us, but then we didn’t really ask. It isn’t your realtors job to find out what the taxes will cost, its yours.

    1. Hi Lucas,

      Yes! You definitely should think about property taxes and be sure you can afford them. To all the readers out there, Follow Lucas’ advice. Taxes, depending on the location of the home, can be exorbitantly expensive. You MUST make sure you can afford them!

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