By Mark Knackendoffel on April 16, 2021
Which "Home Away from Home" is Right for You?
By Mark Knackendoffel, CEO
It has now been more than a year since the Covid-19 pandemic began. I suspect most of us have spent the past twelve months longing to travel and enjoy a vacation without masks and worry.
After receiving our Covid-19 vaccinations, my wife, Ann, and I began traveling again, albeit carefully, to some favorite destinations with family and friends. These vacations got me thinking about a question that clients often ask as they approach their retirement years – is it better to purchase a vacation home or a timeshare? And now, with the rise of vacation rentals, that adds a third option to consider.
I truly feel the best answer is personal preference. It depends on how you want to spend your vacation time, along with several financial considerations as well.
Generally, the options are:
- Vacation Home Ownership
- Vacation Timeshare
- Vacation Home Rental
Vacation Home Ownership
We’ve never owned a vacation (or second) home, but we have many friends who have. We believe they have thoroughly enjoyed their properties. There’s the occasional complaint about maintenance tasks or it being too distant from their primary residence. They also recognize it is a huge financial commitment, especially if the property is only used a few weeks or months each year. Several friends have suggested that we consider buying a similar or adjacent vacation home. Of course, my quick response is, “Why should we buy a vacation home when we can already come and visit you?” But I must admit that these types of vacation homes often become treasured family assets for generations and it’s hard to put a price tag on that value.
We never imagined having any interest in owning a timeshare, but we joined Marriott Vacation Club (MVC) several years ago. (Those salespeople are really good!) We’ve had no regrets. In fact, we’ve upgraded our MVC membership and purchased an additional timeshare interest associated with a golf resort in Mexico. So, why a timeshare? It prompts us to commit to vacations and spending quality time with family and friends in places we enjoy.
Below: a recent photo from Mark & Ann's timeshare in Mexico
Each of our memberships offers affiliation benefits with other travel-oriented vendors: everything from other amazingly-priced vacation home rentals to discounted vehicle rentals. We do pay an annual maintenance Fee, but we believe it is nominal relative to the value of our vacation property experiences.
The timeshare option has worked well for us so far, but it all depends on personal preference and your vacation budget.
Vacation Home Rental
We have only used this type of service a few times, and one was renting the Sunset Cottage directly across the street from our home in Manhattan. We were hosting a reunion of some college friends and used the Cottage for overflow guests, which worked very nicely. But vacation home rental can be a real mixed bag. Sometimes the properties are not exactly what you expect or hope for, which is a drawback we’ve experienced. Rentals can be very affordable options, though, and the selection is growing dramatically. You’ll just have to work a little harder at finding your bliss—you can’t just call the front desk for some fresh towels!
There are pros and cons to each option and our advisors would be happy to help evaluate the right options for you, as you consider your travel planning for this year or in the future.
This article was originally published in The Trust Company's First Quarter-2021 Wealth Management Update, which may be viewed and downloaded here.