Where would you buy a vacation home in the U.S.?

Not sure what you are asking. Do you mean we would need to rent it out when we are not there? If I bought a vacation home, I wouldn’t rent it out, except to maybe some family members or close friends.

But I would love to have a vacation home on the Kohala coast of the Big Island of Hawaii. And if I was filthy rich, I would have an apartment in Manhattan.

Ok, thanks for clarifying! But, like I said, I wouldn’t rent it out looking for a return on my investment. So, ignore my answer above. 😆

I would warn you that very few individual vacation rental owners (at least that we know) actually break even. There are so many factors that go into how much you can make vs. what you spend that it’s not a reliable source of income. (ETA: refer to the threads about wages - the expenses of cleaning, maintenance, and laundry between renters are not small, and can vary wildly from year to year. You also have to consider the initial expense of setting up a home as a vacation rental. AirBnB travelers are savvy and choosy, and expect cable, wi-fi, decent beds and linens, updated fixtures, and caretaking available 24/7.)

The ones that actually make money are the people or companies who own several rentals that can offset each other (and even then, the margins are thin, and most are investors planning to sell the property at a profit in time).

Better to think in terms of how much you’re willing to invest in a property for long-term appreciation of the asset, with the understanding that some years you’ll have to invest more than others, in addition to where you’d like to live part time.

we have a property in sun valley idaho. you can make your yearly costs through rentals. strong winter and strong summer market. we are not renting our place but we could easily. lots going on all the time

Well, I'm sitting on the balcony of our condo rental in Redington Shores, Florida, so...

Honestly somewhere warm on a beach and when I say ON, I mean ON. Not across the street or something. It doesn't have to be Florida but on a beach...

Strictly US or are you open to somewhere close to US?

Do you like resorts when you vacation?

Okay. Mexico. Are you and your husband thinking about buying?

My late husband and I bought a vacation condo in Baja California Sur in 1996 when the resort was still being built. Las Ventanas in San Jose del Cabo (near Cabo San Lucas). It’s managed by Rosewood Hotels. They’re the ones who advertise and book, set the rates, do all the accounting, cleaning, repairs and maintenance.

(As an individual, I technically do not own the unit. Husband and I had to set up a bank trust in Mexico and it’s that trust that owns it. It’s because Mexican law prohibits foreigners from directly owning real estate that’s within 50 km from the ocean.)

Apart from huge bills caused by a hurricane several years ago, rental income has paid for all expenses throughout with profit. The rental rates do vary depending on season. Christmas-New Year season fetches the highest rates. During the economic meltdown, I netted losses one year after another. But that’s an anomaly. Last year, I had zero income for April and May due to COVID travel restrictions, and income did not go back to semi-normal until August.

Everything--property tax, management fees, utilities, repairs, insurance, etc--is much, much cheaper compared to US because the dollars I pay with are converted to pesos. For example, 2020 property tax was $2,319.  We do have an HOA so we get an assessment every couple of years or so.

I’m personally not keen on maintaining a vacation home in the US because of the high expense. What I own here are 3-flat buildings and a small strip mall which are very reliable and consistent income sources with low expenses and many tax advantages. Buying a condo in a Mexican resort, to me, has been positive and lucrative. I go there three to four times a year and whenever I do I just call the hotel and they block off those days. There are some really fantastic resorts near the ocean in Mexico where you can buy. So don’t limit yourself to just the US.

IDK, maybe it’s the 1849 home in Maine that is the money suck. LOL. But small town Maine can make it really hard on rental home owners, too - they want the tourist income but also don’t like outsiders. Lots of regulations and stuff.

And of course the maintenance can be a lot, and last year with Covid we couldn’t do any short term rental at all because the state had very strict regulations on who could travel there.

We have a few different friends who have owned and sold vacation rentals because they consistently lost money in the short term. We’ve always played this as a long term game and bought where the market was low so we could eventually sell at a profit, but not everyone wants to take that kind of financial risk.

one day I’m gonna rent your house in Maine!

Thinking about places I’d want to rent while on vacation, and not considering costs and reality of finding available properties, I would choose:

Lake Tahoe (lake view)
Malibu (on the beach)
Most California coastal towns (Santa Barbara, Laguna, Carmel-by-the-sea)
Coeur d’Alene, ID (lake view)
Whitefish, MT
Martha’s Vineyard
Scottsdale, AZ

I like city vacations so a luxury condo in the heart of Chicago, NYC, Boston.

Or a funky, interesting house (near entertainment) in Austin, Nashville, New Orleans

That's what I was going to say. We have been renting there for 32+ years. We were actually going to do buy a home and rent it out but decided we would rather put the $$ into our land/home to enjoy daily instead of going down just "every now and then." Another place I would consider would be Blowing Rock or Boone, NC.