THE MARKET FOR VACATION PROPERTIES
Many new hybrid vacation-home schemes to choose from; You’re buying moments in the sun, not making an investment
Along with the effervescence in second-home markets over the past decade came a secondary boom in what is loosely called the hybrid vacation-home market. Many of these programs such as timeshare (now called vacation ownership), have been around for many years, but others such as destination clubs are very new.
The overriding concept in hybrid vacation homes was to address one of the key issues concerning second homes: Most vacation homes sit vacant more weeks, if not months, of the year than they are in use.
If you view your purchase of a condo in Aspen or a cottage in Maine strictly as an investment decision, then the “use” aspect of the property is less of a concern. However, on a cost-effective basis, if that condo in Aspen is lived in just for a month in December, a month in July, and maybe a month in April, there are still ongoing costs even for the nine months the property sits idle. When the property appreciates 40 percent over two years during a boom period, those costs are considered just a nuisance, but hyperactive home markets come and go every 10 years or so. When markets quiet, those ongoing costs, from taxes and insurance to maintenance or condo fees, can be debilitating.
The other driver of hybrid vacation ...