Tips For Buying Your Own Vacation Cabin

You're not alone if you've ever thought about buying a cabin near your favorite mountain vacation destination. Many people buy second properties, from baby boomer homeowners who've paid off their principal home to those millennials who have started buying their vacation homes first. While still paying rent in the high-priced city, they're still building their careers. 

Buying a vacation property can make sense for both financial and lifestyle reasons. Here are some of the things to consider.

The Pros

If you use the cabin for your family, you can come and go as you please, with no booking hassles. You can enjoy an impromptu weekend or a week's vacation at a moment's notice. You'll also be able to invite friends and family up or lend them the place, as you choose. 

You could generate rental income. Just as many savvy investors purchase properties primarily for their rental incomes, you can. Services like Airbnb or VRBO make renting your place simple for short-term rentals. And for longer term rentals, or if you're too far away from the property to go there yourself, most markets have property management companies that take care of things for you. 

Most property can appreciate if well maintained. If you do the proper research and get the best price on your purchase, it will probably gain value over the long term. Even without the gradual appreciation that real estate in the USA has typically shown, if you're having tenants pay your mortgage, you're building equity each month at no cost.

The Cons

Expenses typically include the mortgage, taxes, utilities, insurance, and in some cases, homeowner fees. Intelligent buyers also allow room in the budget for upgrades and unplanned maintenance. If you have problem guests or unexpected vacancies that you can't fill, your asset could become a burden.

Owning a vacation cabin in even the most popular area carries some risk. You could lose money on your purchase if you had to sell during a market downturn. A long stretch of adverse weather - or a pandemic - could keep renters away. Renting property also comes with a certain amount of liability.

For most people, owning a second home will eat up most of their vacation budget. Each winter, the annual trip to warmer climes might get sacrificed for the cost of the new getaway. You may squeeze in a new destination here and there, but, for the most part, downtime will be spent at the cabin. Ask yourself if it will be worth it. 

Important Questions

How often will you use the cabin? If you plan to use the home-away-from-home every weekend or once or twice a month, try to stay within a two-hour drive. You won't want the trip to the cabin to become an obstacle that keeps you from enjoying it. 

What time of year will you use the cabin? If it's a summer getaway you seek, then consider something near a lake. A lakefront property opens up all sorts of summer fun, like kayaking, swimming, fishing, and boating, among other things. A lakeside cabin will also fetch considerably more rental income year-round. If you and the family lean more towards winter activities, buy close to the slopes. Like properties near a lake, cabins convenient to ski areas also rent faster and offer more income than those further away from the action. 

How much rental income will you need from the cabin? Look at similar properties on vacation rental sites to get an idea of how much money your place might rent throughout the year. Please assume that the cabin will sit empty for at least half of the time you want it occupied. Then calculate its total annual expenses against its potential yearly income. Will you be willing and able to make up any shortfalls from your household budget?

Where to Buy

You're ahead of the game if you already have a spot that you'll never get tired of coming to. Believe it or not, according to CNBC, sixty-five percent of people looking for a vacation home do not have a specific destination in mind. If you fall into the latter category, consider the following markets that boast gorgeous scenery, growing visitor rates, a wide range of year-round activities, and reasonably priced properties.

Smoky Mountains, Tennessee

Great Smoky Mountains National Park is open year-round with no admission charge and is the most visited national park in the country. The gateway town of Gatlinburg and its foothills have many hundreds of luxury rental vacation cabins. With countless family-friendly attractions in the cities and stunning natural mountain scenery, the area is perfect for a cabin vacation. Some owners self-manage, while most owners of Gatlinburg cabins use local management agencies to handle the rental and servicing process. Check around the agencies to find the one that offers the best return for owners.

Big Sky, Montana

One of several gateways to Yellowstone National Park, Big Sky offers everything from skiing and dog sledding in winter to golf and fly fishing in the summer. Located only 55 miles south of a major airport in Bozeman, Big Sky's convenience adds to its popularity with cabin buyers.

Killington, Vermont

Located 270 miles north of New York City and 159 miles northwest of Boston, Killington, Vermont, offers cabin buyers a chance for steady rental income. Along with some of the nation's best skiing, snowboarding, and tubing during winter months, various activities and events like mountain biking, hiking, and weekly concerts draw visitors to Killington year-round.

Big Bear, California

Buy a cabin in Big Bear, California, and you can hit the slopes in the morning and catch a concert at the Hollywood Bowl in the evening. Situated just 100 miles east of Los Angeles, the mountain resort town of Big Bear features plenty of alpine activities, excellent shopping and dining, and lots of properties along its gorgeous lake. 

Finger Lakes, New York

New York's Finger Lake Region consists of eleven long and narrow lakes that run north to south. Area vacation rentals range from rustic cabins to luxury homes. With a median listing price of less than $250,000 and a median annual rental income of more than $25,000, vacation properties typically generate more than enough cash to cover expenses. Along with fishing, boating, and swimming, other popular activities include the Seneca Lake Wine Trail and Watkins Glen State Park.