Given that summer has officially started, I thought I would share a piece of advice I give regarding vacations and leisure purchases.


As a financial advisor, it is not uncommon for me to get a call from a client who wants to look at buying a vacation property because they just returned from a trip and fell in love with the destination. Or they call because they want to talk about buying an RV or boat to use on a regular basis during the summer or in retirement. This scenario also applies to sports cars and other fancy, infrequently used toys that catch their eye and hypnotize their pocketbooks.


Here’s what I tell them: “You should rent your fun, not buy it.”


I swear, most times it makes more financial sense to rent fun things than it does to buy them. Now, there’s no advice universal to all people in all situations, but in most cases I believe that the rent-your-fun-approach is the right remedy. Allow me to use my personal experience as an example.


My wife and I have taken our 5 boys ranging in ages from 8-15 on a 2-3-week RV trip every summer for the last 4 years. We joke that we want to take some family vacations while our children still like us! For those of you who have suffered teenagers, you know exactly what I mean. Initially my wife thought it might make sense for us to buy an RV big enough to hold our whole family for said purpose, and even use it to visit our kids in college. Footnote: the last bit terrified my two young teenagers! Apparently having your parents pull up to visit at college in an RV isn’t as cool as your parents might think.


In doing the research, I was surprised to find out a brand-new RV that sleeps 7 + people comfortably is a $150,000 – $600,000+ proposition. And that’s before considering taxes, insurance, upkeep, and storage. So, I pulled out my handy calculator and did the math. Even if we used it 4-5 times a year (which I doubted) I would have to own a middle-of-the-road-model for more than 10 years before I would approach breaking even. If I rented an RV, I would only pay for it when I really used it, I could vary the size based on our needs, and could most likely get a high-end or upgraded model based on the occasion. In our case, it made a lot more sense to rent our fun rather than buy it!


Here’s another great example. I had a client who wanted to retire and live on a sailboat. This couple decided to sell their primary residence and take a significant portion of the proceeds to purchased a brand-new sailboat that was to become their retirement home as they sailed around the gulf and Caribbean. Four months later they called me to let me know they were selling the boat and moving back to town. Turns out the couple didn’t realize they both get really sea sick, plus they missed their grandkids! They would have saved LOTS of money and learned a bit about their sea-worthiness had they just rented the boat for a few months rather than buying right away.


This same logic applies to vacation homes and other expensive toys. If you buy a beach house, chances are you’ll feel obligated to go to the same beach every time you vacation. It’s a moot point if you learn later that you prefer to live in a different community or in a different state or on a different beach. Even if you use your investment 3-4 months out of the year, you’re still paying for 12 months-worth of expenses.


The bottom line is, if you buy your fun, you’re locked into that location or model or big toy for as long as you own it.


If you rent your fun, you can make a different choice every time and have a much broader range of vacation experiences!


What do you think?


Have questions about vacation property investments or big-ticket purchases?


Get in touch with dgaynes@intfingroup.com and we’ll set up a time to talk. Or call my office at 770-353-6400.