Is it better to buy or rent a vacation home?

Published Date: January 6, 2023

palm springs pool and hot tub with mountain view
Ditching the hotel rooms for a “home away from home” is becoming more and more popular, but it begs the question: Does it make more sense to buy or rent a vacation homeKnowing the pros and cons of each option can help you decide whether you want to buy or rent a vacation home. 


Money talks, and when it comes to a major investment decision, it can yell. Here are some of the financial considerations to take into account when deciding between buying and renting your vacation home. 
  • Expense: Purchasing a home will cost significantly more than renting one. And homeownership is a year-round commitment with expenses like utilities, maintenance, property taxes, insurance and often HOA fees. With a rental, you pay only for the time you’re using the home.
  • Investment: When you rent, all you get for your money are memories. When you own your vacation home, you’re investing in an asset that may increase in value over time. Many second home owners even choose to retire in their vacation homes.
  • Income opportunities: When you own a vacation home, you can use it yourself and offer it as a short-term rental. Short-term rental income can offset the cost of the mortgage and expenses like maintenance, utilities and property taxes. You might even generate a profit. But keep in mind that not all localities allow short-term rentals, so check local ordinances before buying if you plan to rent out the home. 
  • Tax breaks: You won’t see any tax benefits when you rent, but if you take out a mortgage to buy a second home you might. You can deduct interest on mortgages up to $750,000 (including your primary residence) and if you rent out your vacation home for more than two weeks each year, you are eligible to deduct expenses related to maintaining the property.


As the saying goes, time is money, so it’s important to consider how you want to spend yours. 
  • Booking: If you’ve ever combed through rental listings comparing guest reviews and searching for an elusive opening on your desired dates, you know it takes time. When you own a vacation home, you know when it’s available and exactly what to expect.  
  • Upkeep: With a rental property, your only responsibility is to follow the house rules and treat the property with respect. But when you own a vacation home, you’re responsible for repairs, lawn mowing, snow removal, etc.  If you don’t have the time, plan to pay for property management services.
  • Packing: When you own your own place, you can leave all the essentials there so your retreat is ready for a last-minute getaway. If you rent out your home or share it with other owners, you can keep your personal items in an onsite storage area. But if you’re renting, factor in the time and stress of packing for every trip. 


Some people crave variety in their vacation experiences while others love consistency. Consider how flexible you like to be when you’re deciding to buy or rent. 
  • Destination options: If you suffer from wanderlust, renting may be your best option. But if you’ve found your heaven on earth and know you’ll want to return again and again, buying a vacation home there makes sense. And some second home owners strike a balance of staying put and seeing new places by using home exchange programs. 
  • Socializing: Most rental properties have strict rules about additional guests, so if you’re hoping to share your vacation experience with family and friends, you’ll have more flexibility if you own.  
  • Experience: When you rent, you’re always a visitor and a tourist. If you want to experience your destination like a true local and have a say in decisions about your property and your community, then ownership is a better choice.

The bottom line

Is it better to buy or rent a vacation home? It really depends on what you’re looking for and how much time and money you’re willing to commit. If you’ve found your dream destination and you’re ready to live like a local, second home ownership can be very rewarding. For purely short-term fun, less money and no commitment, renting is a good option. 

The middle ground

Former vacation home renters and prospective second home owners are now embracing Pacaso’s more attainable option of fully managed LLC co-ownership, starting at ⅛ share.  Pacaso offers the benefits of true real estate ownership at a lower price point than whole home ownership, and without the hassles of property maintenance and management. Pacaso owners can easily and equitably book time in their homes two days to two years in advance. And each owner has their own secure storage space in the home, so packing is minimal. Visit Pacaso to view listings and learn more about how a co-ownership LLC can help you own the vacation home of your dreams. 

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Kasey Tross

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