I didn’t grow up with people who had vacation homes, so it seemed pretty ballsy to our friends and family when my husband and I started planning to buy our dream home in Maine. Naturally, a major concern was whether or not we could afford it. With all the time it took us to save the downpayment, I had years to crunch the numbers on our future vacation home expenses from here to Sunday. I figured out how much mortgage, tax, and insurance were likely to drain us monthly. I estimated how much more we’d need to add to our emergency savings. I did the figuring about how much it would help us if we could rent the house weekly to other vacationers.

Oh, I did the math.

Vacation Home Dreams Meet Real World Expenses

In 2013, we realized our dream of buying Sadler House, and I signed a thousand papers with very sweaty hands. With some self-control, we managed to buy a home that was within the budget I had allocated to us. We crossed our fingers and moved forward.

We’ve owned and rented this beloved home now for more than two years, and I have learned about expenses that even my copious calculations didn’t previously anticipate. All in all, we’ve been very happy with our decision. Based on my experience, however, I thought I could spare some future owners a little grief by sharing a list of expenses to consider when they budget for their own dream vacation homes.

First, the obvious.

Mortgage and Tax

This is the easiest. There are many free online calculators where you can run the numbers using your home price, down payment, and expected interest rate. For the tax on a given home, look at the tax records on the real estate listing. Realize that these rates will fluctuate over time and be ready for them to change somewhat from year to year.

Insurance

Don’t assume that you will pay the same for insurance on your vacation home that you do on your primary home. Basic factors such as the age of your home or its location can vastly change the insurance rate. Furthermore, if you plan to rent your home to weekly vacationers, you are going to enter into a whole new level of insurance expense that will change according to such factors as the frequency of your rentals and your caretaking provisions. Even allowing renters to bring pets may warrant extra liability insurance. Do your research and consult an insurance agent local to your new home. They will know the ins and outs of insuring homes in your area.

Utilities

We naively assumed that we would not be paying for utilities when the home was unoccupied, but we could not have been more wrong. Our water service, for example, charges a certain entry level flat fee just to have the water “available” to us, and it’s not a small amount. Our home is heated to at least 50 degrees all winter, even if we decide to flush the pipes with anti-freeze. The electricity is needed to run the WiFi that operates our home automation system (which monitors our temperature and operates our door locks and refrigerator). With the exception of the oil heat in the winter (which is painfully expensive at times) these utility costs are not prohibitive, but they stack up. If you have questions, call your local utility companies and find out what their policies are. When you are searching for a house, don’t blow off the question of what fuel heats the home and how much it costs. These charges are important to understand.

Caretaker

Even a simple yard needs maintenance

Only fancy people in old English stories have caretakers, right? Nope. If you are an absentee owner, especially if you are renting to others or you are in a tempestuous climate, you desperately need a local person who knows what he or she is doing. Caretakers are your first line of defense against disasters like burst pipes and roof leaks. They may walk through your house once or twice a month when it is empty and check for problems. They are your first call when a renter has a mechanical problem that needs to be assessed and service called. Even if you don’t rent your home to vacationers, you are likely to need some level of caretaking to keep your home safe and undamaged.

Because caretakers may only work on a retainer, you should make some inquiries in the area and find out what that is going to cost you. If you plan to leave your property unattended for long periods, just make sure you are ready for mishaps!

Yard Work and Snow Removal

This item on your list of vacation home expenses can vary widely depending upon a few factors:

• Location and climate
• Size of yard and landscaping choices
• Whether or not you are renting to others

Winter of 2015: An expensive year for snow removal!

Keep in mind that, even if you aren’t renting to guests, you want your neighbors to like you; they will not be thrilled if you let your yard go wild. It’s also necessary to consider whether you may need to spend money on seasonal yard cleanups (raking, pruning, etc.) and tasks such as storing your grill.

You may even want to consider choosing a house with a small yard, if you are not able to do yard maintenance, yourself. A manageable yard can still offer plenty of space for a few Adirondack chairs and a Bocce set! Don’t choose a vast yard that becomes a millstone around your neck.

Snow removal is a whole other bottomless pit of expense if your home is in a cold-weather climate. An in-town property may be required to keep sidewalks clear. If you have guests, the driveway will need to be kept clear. We had thought that, without a sidewalk, we’d only need to clear the driveway for winter guests. However, we were wrong. Since oil is delivered into the side of our house, we have to keep our driveway clear and the garden path shoveled at all times. Snow removal can add up to a pretty penny, so factor that into your calculations if it is relevant to your location.

Entertainment and Connectivity Fees

Unless you want the “unplugged” experience, you are going to need to pay for conveniences such as WiFi or cable. It’s not always doable to have these shut down in your absence. Check with your local providers for rates and consider what your needs are. If you are hosting guests, be sure you are offering the conveniences that will make them want to stay in your home.

Fixing and Furnishing

Don’t underestimate the cost of filling your house (whatever its size) with furnishings. We managed these costs by doing some DIY work and collecting items in advance but, even then, w e had to pay for a moving truck to get our furnishings to Maine! Everything from couches to tables to kitchen spatulas are going to be necessary to make your new home a retreat. Those large and small items take a toll on your budget and you can’t afford to have that come out of your emergency savings.

Additionally, Murphy’s Law guarantees that you’re going to have to fix and replace things you didn’t expect. For example, the refrigerator we thought was serviceable was actually not working when we moved in. No matter how diligent you are, expenses are going to come up. Estimate a slush fund and then add to it. You’re gonna need that cash.

Vacation Home Expenses – You’ll Never Predict Them All!

The bottom line is that, no matter how well you plan and estimate, surprises are going to happen. The key is to buy a home that is well within your budget, knowing that other expenses are going to add to your burn rate on a monthly basis. Whether or not you choose to offer your house as a vacation rental involves a whole other set of calculations, because it can defray your costs quite a bit, but it also involves additional expense.

Despite all the lessons learned about vacation home expenses, we are absolutely in love with our house and wouldn’t change our decision for the world. Financial obstacles can be overcome with careful planning and a slush fund to cover your surprises.

Our advice? Save, save, budget, and then do it.

For more how-to and lessons learned advice for future vacation home owners, check out or tips for choosing furnishings, choosing furnishings, and creating the ideal bunk room!
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