Vacation Homes as an Investment

I just read another article in a “money” type of magazine bashing second homes as an investment. Of course, the have a vested interest in keeping you in the stock market, or keeping your investments liquid, otherwise you don’t need their magazines anymore!

They had a few good points, but mostly focused on high annual taxes and high cost of insurance as a big negative factor.    Granted, if you are looking in Florida, the Keys, the Gulf Coast, or anywhere near any ocean, you can bet that you will have very high insurance costs, and also expect to be in a very high tax state as well.  Those locations will lalso have pretty tough restrictions,codes, permits,  all of which add expense and hassle.

The Lake of the Ozarks may not be South Beach, but we also don’t have the high taxes, insurances expense, and higher cost of living either.    This factors greatly into the holding costs for your investment or second home, and helps make the jump into this market much easier to justify.  Add to the fact we have very low labor costs, and plenty of low costs materials at Menards, Home Depot, and Lowes, all located within a few miles of each other, that will help keep repair and upkeep costs lower as well.

As a purely financial investment, I doubt your Lake of the Ozarks purchase is going to set any records for rate of return.   You can probably buy whatever the hot financial investment vehicle of the month is and do better.  But as an easy to own, low cost, low tax, low interest rate investment that is affordable to own and keep up, that you and your family and friends can actually use and enjoy, I can’t think of a better place to have some money invested.