Buying a vacation home is exciting, but it is also a big decision. What’s more: the skills that served you well in choosing and buying your primary residence are not necessarily the ones you need to pick out and negotiate a deal on a vacation home. If you are in the market this season for a second home, consider the following tips:
1. Get to know the area before you buy. Buying a home is different from staying in a hotel. Even if you’ve spend years vacationing at a resort area, it’s a good idea to rent a house for a couple of trips to get to know the ins and outs of the different neighborhoods, how the utilities and services work and things like where the best grocery store is located.
2. Look at the house as a long-term investment. Vacation homes are not necessarily easy to sell if you need your money all of a sudden. In addition, although most properties appreciate over time, the real estate market, like the stock market, can have dramatic downswings.
The general rule of thumb is to plan to use the vacation home for at least five years before selling. That way you can be more likely to get your money back out of the property when you sell.
3. Remember to factor in all costs. Vacation homes usually carry additional costs in addition to the expected costs of your mortgage, property taxes and insurance. You will need someone to do the general lawn and house maintenance when you are away.
In addition, if you rent the home, you will need someone to clean it between occupancies and probably a company to handle the marketing, renting and day-to-day operations of the property.
4. Opt for a house that can be rented. Although you may not have any intention of renting your vacation house, rentable properties are more desirable to future buyers and will likely hold their value more than a house that is less likely to be of interest to vacation travelers.
In addition, being able to rent your vacation house is a good fallback option in the event your financial situation changes dramatically.
Buying a vacation home should be fun, not stressful. Keep our four tips in mind and you will soon have a wonderful vacation retreat for you and your family to enjoy for years to come.