Many factors are driving this trend:

* Ageing baby-boomers are entering their peak earning years and they have demonstrated an unwillingness over the years to save money like their parents did. They like instant gratification, and nothing is more gratifying than telling your neighbors and co-workers that you have one-upped them with your vacation home.

* As members of the World War II generation are passing away, they are leaving large and unexpected inheritances to their spendthrift children. Remember that this generation was the last one affected in a meaningful way by the Great Depression, and they tended to pay off debts early and save for retirement. Now that they are passing from the American scene, they have accumulated far more wealth than any previous generation.

This inter-generational transfer of wealth will be massive. And don't expect baby-boomers to sock it away for retirement. Instead, a place at the beach or in the mountains is a good fit for the "what - me worry" attitude.

* Major advances in communications and technology make it possible for many workers to perform their duties without being physically present in the traditional office setting. And this trend will continue.

For example, tele-commuting was almost unheard-of before the 1996 Olympics, but officials encouraged thousands of Atlanta workers to stay at home during some or all of the games to ease traffic. Today, more and more can do their job, either partially or totally, over high-speed internet connections, now available in even the most remote locations.

So, if you have been thinking about buying a vacation home, here are some questions I am most often asked about the process:

Q: I want to buy a house at the beach, and my goal is to rent it enough to pay for it on a monthly basis. Then my family and I can use it for free. Is this realistic?

A: Yes, you can certainly offset some of the costs of ownership by renting your vacation home to others. But the IRS has set up guidelines for this type of ownership.

If your family or friends use the home for more than a total of 14 nights (or 10% of nights rented annually), you fall onto the category of a second residence instead of a rental property. This costs you valuable tax deductions such as depreciation and related expenses such as travel to and from the property and routine repairs and upkeep.

Most casual owners of vacation homes are not able to meet the strict requirements of qualifying as "investment" property as opposed to a second residence, and so it becomes harder for you to break even financially.

Q: Are there any other stumbling blocks to my plan?

A: You will probably want to borrow a large portion of the purchase price, and because resort real estate has appreciated rapidly in recent years, your monthly ownership costs will probably be high. These will include loan repayment, taxes, insurance, maintenance, repairs, and housekeeping costs between guests.

And because resort rentals tend to be seasonal, it will likely be difficult to keep your property rented at top dollar on a year-round basis.

So what tends to happen is that you get good rental income during the high season, when visitors are willing to pay larger rental fees for the most desirable time slots. But during the remainder of the year, there may be large blocks of time in which you have no guests at all.

And depending on where you own, the competition can be fierce. If there are resort hotels nearby, they may slash rental rates just to feed their other enterprises, such as restaurants or condo sales. Unfortunately, it is difficult to compete with full-time marketing.

Q: Won't the local real estate company try to keep my vacation property full year round?

A: Yes, but once you list with a management company, they will expect to receive a commission of anywhere from 15% to as high as 33% of rentals received. In addition, they may add an administrative charge to all expenses made on behalf of your property, such as maintenance or repairs.

And you shouldn't be surprised if the management company already has more properties available than they can fill right now. The low interest rates of recent years encouraged many people just like you to buy a vacation property and try to rent as much as possible.

Q: So, are you saying it's a mistake to buy a vacation home?

A: To the contrary, I think resort real estate will likely hold its value well in the coming years, and it is certainly not unrealistic to hope for some offset in expenses through a rental program.

However, I think that, in today's environment, it is unlikely that anyone would be able to buy a vacation home with a small down payment and then be able to rent it out for enough to fully cover all the typical costs, especially during the early years of ownership.

In order to break even from day one, you would probably need either to find an extremely undervalued property, or put down a very large downpayment, so as to minimize monthly ownership costs.

Q: So, what about in the future?

A: Well, as time goes by, we can hope for two things to happen.

First, it is typical that rents go up as the years pass. Inflation just tends to make things more expensive. And as rents go up, a larger share of your costs might be covered.

Finally, it is possible that the value of your property might go up and that you might be able to refinance at some point in the future when interest rates are lower than they are today. That step could significantly lower your cost of ownership on a monthly basis.