Thinking About Buying a Resort Property? Not So Fast. Read About These Serious Drawbacks Before Making The Final Decision

imagesOwning 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.

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. images-2

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.


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. images-1

Property Tax

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.

2 thoughts on “Thinking About Buying a Resort Property? Not So Fast. Read About These Serious Drawbacks Before Making The Final Decision

  • December 12, 2016 at 10:40 pm

    We bought a home in Hawaii, and have never had trouble renting it out. I’m not sure why so many owners have trouble renting their vacation homes. Maybe they are purchasing in the wrong spots?

    • December 12, 2016 at 10:43 pm

      Hi Bonnie! Yes, unfortunately many buyers purchase a property in a location where they want to, without thinking about what a renter would want. Remember, vacationers want to enjoy the island, or area. I’m sure the property you purchased wasn’t in a secluded area. This is a mistake many buyers make.


Leave a Reply to Bonnie Cancel reply

Your email address will not be published. Required fields are marked *