According to an article published in Atlanta Magazine’s Home, “owning a vacation home affords you prestige among peers, business associates and family members.” Webster’s defines prestige as the power to command admiration or esteem. . . distinction based on achievement; having or showing success, rank, wealth, etc. Do you want to command admiration instantly, distinguish yourself as being a brilliant achiever and be considered as being a wealthy person? If the answer is yes, then, according to this article, all you have to do is buy a vacation home.
There are a variety of reasons why millionaires don’t own vacation homes. Most self made millionaires don’t need to collect “things” to define and demonstrate their achievements. Also, most wealthy people have a wide variety of interests and activities. There is a substantial correlation between the number of interests and activities that people are involved in and their level of financial wealth. Some wealthy people feel that owning a vacation home would restrict them, obligate them to spend a lot of time there. And if they do not spend much time there they feel guilty spending lots of dollars on something that is underutilized. Most millionaires realize this without having to make the first mistake of purchasing a second home.
Given the facts as I see them developers should not expect a significant demand from the affluent population for their downsized vacation homes. For most millionaires, the decision is to own or not own a second home, not about the size or price of the offering.
Several of the vacation home developments which were mentioned in The Wall Street Journal article were offshore. Even in normal times it is not easy to market second homes that require a long distance commute. Most millionaires who own vacation homes are family oriented and are purchasing a second home for family vacations including children, grandchildren, etc. Buying is more a function of doing for others rather than for oneself. Those who purchase a vacation home want it to be accessible and easy to reach for the entire family.
1 thought on “Second Homes… Part II”
A second home can be a good investment, in the right area. However, the main consideration is the pull on one’s time. Time is money. Before buying a second home, think of all the demands associated with your primary residence. Things break, at unexpected times, and some repairs (like a central airconditioning failure in mid-summer) must be made immediately.
Even if you can comfortably afford a second home, multiply the demands your current home places on you times two.
In addition, remember you are not at your second home all the time. Things can go wrong when no one is there to observe it. Think of a pipe burst in winter. It can cause serious damage. If you are not aware the pipe has burst, the mess will await you on your next arrival, when you were hoping to relax.
If you are not prepared for the added responsibilities that come with a second home, then a nice hotel might be a better option.