Buying a holiday home in the USA

Dreaming of a home away from home where you can kick back and relax? Many of us do. Hearing your friends boast about all the fun they had vacationing at their holiday home makes you want the same for you and your family. Some people prefer small cottages in the mountains, many like beach houses, while others want a whole ranch. Regardless of the size, location or purpose, buying a holiday home in the USA is a complex endeavor.

  • We have gathered some basic information and useful tips regarding:
  • The benefits of buying a holiday home in the US;
  • The drawbacks of buying a holiday home in the US;
  • The important steps before purchasing a holiday home.
Buying a holiday home in the USA

Purchasing a vacation home is the dream of many Americans

Upsides of buying a holiday home in the USA

Long-term profits

Holiday properties are likely to maintain their value if they are located in popular vacation areas. However, real estate does fluctuate in value, so don’t be surprised if you cannot sell your vacation home for a higher price in the future.

Renting profits

You can become a landlord and rent out your home. This is a good way to make some money, maybe return your initial investment, or even make more. In case renting is the main purpose of buying a home in the USA, the closer it is to your residence the better. Rental fees depend on the popularity of the location and the season.

Tax benefits

Whether the home is for rent or personal use only, you can enjoy some tax benefits. You get to deduct the mortgage interest from your second home the same way you would from your first one. Renting your holiday home tax-free is possible unless you want to rent for more than two weeks throughout the year. If you rent for more than two weeks, your home becomes a rental home, you are considered a landlord and you have to report your rental income.

A piggy bank and a toy house

Buying a holiday home in the USA can be a smart investment

Place for leisure

After a busy week, month or year, we all feel exhausted and need a break from our daily routines. Luckily, America is a big country with all kinds of geographical features and climate. If you live in the US, owning a second home here is the best way to spend your days off without leaving the country but still being far from home. A vacation is a great opportunity for family reunions, barbecues, swimming in the sea or skiing.


It’s nice when you know where the best beach or the nearest grocery store is. Who likes being lost the first couple of days, asking everyone for directions, and losing touch with new friends as soon as the vacation is over? This way everything is familiar. You know exactly what to pack, where to go and what to do. Once you get to know your neighbors, your friendship can last for years. On the other hand, this could be a drawback because some people get bored visiting the same place over and over.

Preparation for retirement

Most holiday home buyers are in their mid-40s to mid-50s, which could mean that retirement is slowly approaching. If you plan to move and spend your retirement away from the hustle and bustle of concrete jungles, this could be great practice. And who knows, maybe you’ll decide to spend your golden years in your holiday home.


Your holiday home is available to you whenever you want it to be. You don’t have to plan ahead, make reservations, or worry about the refund in case of cancellations. If other people use your home as well, you are still the boss. Furthermore, you can leave your things, such as bicycles, ski equipment or surfboards, and they will be waiting for your next visit (beware of burglars!). Also, in case something breaks or gets lost, you can feel more relaxed, knowing that it’s not someone else’s property. And most importantly, all your friends and family members can enjoy it.

Downsides of buying a holiday home in the USA

Mortgage costs

In case of holiday properties, the percentage of down payment and the interest rate on any mortgage will probably be higher. A typical 15-30 year mortgage for this kind of property, normally demands a 20-30% down payment of the sale price, but it all depends on your financial status, credit history, the home’s condition, location and market value.

Mortgage papers and house keys

Mortgage costs for a second home are likely to be higher

Maintenance and other costs

Maintenance costs for a vacation home are sometimes higher, depending on where the home is located. If you rent out your vacation home, property insurance is often higher. In addition, property taxes are usually higher in areas where such homes are popular.

Bad tenants

Bad tenants sometimes cause damage to the place that can even stay unnoticed for a long period of time. This way you could lose more money than you make. Carrying out a thorough background check would be too much, and not even that guarantees you’ll be trouble-free.

Travel time

Buying a second home in the US makes sense only if it’s far enough from your first home. This requires spending long hours traveling, which can cost a lot. Managing a home from afar could be tricky. You need to travel back and forth each time something unexpected happens. It would be a good idea to leave someone you trust in charge during your absence, preferably a local. This person could manage your home and get there quickly in case of emergency. If you rent your place, some rental and management companies can do this job for you, but that doesn’t come cheap.

How to purchase a holiday home

These are the most important steps when purchasing a vacation home in the US:

  1. Seek advice from experienced holiday home owners
  2. Choose a location
  3. Establish your budget
  4. Find a good realtor

There are numerous reasons why buying a holiday home in the USA is a brilliant idea, however, there are also many arguments against it. Whatever you choose, avoid making hasty decisions and following your heart without consulting your mind first. Do not let smiling but cunning realtors and dreamy locations lure you into a bad deal.