Vacation real estate seems like the perfect investment until you get the 3 a.m. call about burst pipes flooding your ski condo while you’re in your primary home sleeping. Although the appeal of owning a chalet in Aspen or a home in the Caribbean is obvious, the reality is that direct ownership requires you to manage an asset with daily care needs from hundreds or thousands of miles away.
As an owner of vacation real estate, you must coordinate contractors you’ve never met, deal with local tax requirements you don’t understand, hire seasonal workers you have no relationship with, and hope your property manager isn’t cutting corners while charging premium fees. This guide offers tips and tricks about investing in vacation real estate with all of the enjoyment and none of the headaches.
What Makes Vacation Real Estate So Attractive
Vacation properties include beach houses, ski condos, mountain cabins, or any residential property you own but don’t use as your primary home. These properties appeal to affluent families because they are great options for both personal enjoyment and diversifying an investment portfolio.
The lifestyle advantages are what initially attracts most people. You get familiar accommodations at destinations you love, plus the freedom to customize home amenities exactly how your family likes them. No more gambling on the rental quality or availability when you want to travel the most.
The U.S. vacation rental market hit $17.47 billion in 2023 and continues to grow at around 3% per year. Airbnb’s strong 2024 performance with 133 million bookings and $2.1 billion in quarterly revenue proves there’s strong demand for vacation accommodations that property owners can tap into.
Tax benefits are another reason investors are attracted to vacation real estate homes, as these properties usually qualify for deductions on mortgage interest, property taxes, and maintenance expenses.
Challenges of Traditional Vacation Home Ownership
Owning vacation properties sounds appealing until you have to deal with the reality of managing property from hundreds or thousands of miles away. The financial and logistical challenges turn dream homes into expensive headaches that consume time and money you’d rather spend enjoying your investment.
These are some of the most common obstacles that vacation homeowners face:
- Unexpected maintenance costs: Experts recommend budgeting 1% of purchase price each year for maintenance, which means that a $500,000 vacation home needs $5,000 per year just for basic upkeep before any major repairs. That doesn’t include emergencies like burst pipes flooding your mountain cabin or a hurricane damaging the roof of your beach vacation home – both scenarios could potentially be covered by insurance, but then those annual costs increase as well.
- Property management difficulty: Professional vacation rental management costs 15% to 40% of monthly revenue; you’re responsible for year-round maintenance, insurance, and upkeep, whether the property generates income or not. Without professional property management, you end up coordinating maintenance, cleaning crews, and other service providers from hundreds or thousands of miles away.
- Location limitations: Buying a luxury vacation home locks you into visiting the same destination over and over again, even when your family’s interests change, or you want to explore new places. Kids who loved the beach house at age 8 might prefer ski trips at 16, but you’re pre-committed to your original choice.
- Seasonal income volatility: Rental income fluctuates massively based on weather and economic conditions beyond your control. A poor snow season could ruin your winter rental income just as a hurricane over Labor Day weekend could cancel your bookings.
How Shared Ownership Simplifies Vacation Real Estate
Luxury home timeshare alternatives solve the problems associated with sole ownership by letting you invest in professionally run property portfolios instead of buying just a usage right (timeshare) or going all-in on an individual home. You get access to luxury properties in multiple destinations while expert teams handle everything that makes traditional vacation home ownership complicated.
Professional Management and Concierge Services
With shared ownership models like Equity Estates, professional teams take care of everything so you can enjoy your vacation instead of worrying about fixing the air conditioner that broke or ensuring the cleaning crew shows up before you are scheduled to arrive. You never have to deal with hiring an emergency contractor or fixing problems from a distance.
Professional management handles everything for you:
- Maintenance gets done before you need to place any calls.
- Cleaning crews prepare the home perfectly before you and your guests arrive.
- Concierge teams book restaurants and activities for you and your guests.
- Properties get prepped for bad weather or off-seasons when you’re not there.
- Problems are immediately fixed if anything goes wrong during your stay.
Flexible Use and Availability
Having access to a full portfolio means you can visit different luxury vacation destinations instead of going to the same house every year, while still taking that annual trip to the locations you love. You might spend Christmas in the Caribbean, summer in Tuscany, Labor Day in Florida, and winter weekends in Aspen without owning four separate properties.
This flexibility works as your family changes over time. Kids who loved building sandcastles might prefer snowboarding in their teens, and your investment adapts instead of locking you into one location.
Streamlined Tax and Administrative Handling
You get one clean annual tax statement (a K-1) instead of dealing with property tax bills, maintenance receipts, rental income paperwork, and transaction fees from multiple bookings. Professional managers handle everything related to taxes, while you enjoy easy investor reporting.
No more coordinating with contractors in different states or figuring out local permit requirements for properties you visit a few weeks per year. Expert teams keep everything compliant for you, and all you have to do is focus on enjoying your investment.
Is Vacation Real Estate Still a Good Investment?
Residential real estate has historically held value even when other stock-market sensitive investments tank – because people always need places to stay. Even when fewer people go on vacations during downturns, the high-end luxury market remains relatively insulated as high-net-worth and ultra-high-net-worth individuals aren’t as severely impacted.
Industry surveys show that real estate professionals remain upbeat about the market, with more than two-thirds expecting positive short-term performance and nearly 90% confident about long-term growth.
What Equity Estates Offers (and Why It’s Different)
Equity Estates minimizes the headaches associated with luxury vacation home ownership while giving you access to incredible properties around the world. You get the benefits of vacation real estate ownership without dealing with maintenance calls or management difficulties that drain time and money.
Equity Estates focuses on long-term capital appreciation while prioritizing investors full use and enjoyment of the portfolio, rather than seeking to generate cash flows from renting to outsiders. While real estate investing is inherently speculative, targeting highly desirable locations at the right price allows Equity Estates investors to seek stable risk-adjusted returns over a ten-year period
Here’s what makes Equity Estates different from traditional vacation home ownership:
- Access to 65+ luxury homes across multiple countries and climates instead of just one property
- Concierge-level service that handles everything from airport transfers to restaurant reservations
- Equity (ownership) without the property management responsibilities
- 60% target occupancy rates mean high availability when you want to travel
- Clear 10-year exit plan and defined liquidity path
- Full financial audit transparency so you know exactly how your money is being put to works
- Professional staff at each location
This alternative eliminates the pain points that make traditional vacation home ownership so stressful.
Learn more by speaking with our Investor Relations team at 404.445.8501 or through online scheduling. In the meantime, explore our other stunning destinations waiting for you.
