Things to Know Before Buying a Vacation Home
Having a second home that’s used as a summer home or a vacation rental is a common real estate trend for families both domestic and international. So how do you know if a summer home is a good investment for you? Having a second home for getaways sounds glamorous – and it can be – and many times, it’s even a really good long-term investment. Let’s examine what goes into buying a second home and see if the time is right for you to expand your real estate portfolio.
Visit the area first
This might seem like a no-brainer, but visit the area you are thinking of investing in a few times before signing any contracts. Be sure that you simply adore and can’t get enough of that beach town, ski village, or country ranch before you commit to buying there, since you’ll be spending a great deal of your free time there in the future.
Know all the associated costs
Just like your primary residence, you have to understand the total price of ownership including property taxes, insurance, and any other carrying costs. Remember, even when you’re not there, you’re still being charged for water, gas, electrical, trash removal, landscaping, and other maintenance services.
Consider maintenance when you aren’t there
Speaking of costs, there’s one more expense specific to a vacation homes: management fees. If you plan to visit infrequently – and are even considering renters while you’re away – make sure you find a local property manager that will maintain your home. It will cost extra, but so will the damage from those frozen pipes or leaky roof, especially if it goes unnoticed for a long period of time.
If you are going to allow renters
If managed correctly, some of your costs can be offset by allowing renters while you’re away. And from a long-term investment standpoint, rental income may allow you to build equity and eventually pay the property off. Analyze nearby vacation homes, talk to local agents and vacation rental companies, and look online to see what’s renting (and for how much).
Learn about local crime
Vandalism to your property could give you a lot of trouble, and a break in or other crime at your vacation home can be particularly frustrating when you’re not around. Consider the cost of a security and alarm monitoring systems to your budget.
Is it easy to get to?
How easy will it be for you to get to your new vacation home? Your best options are accessible ones. While it may sound romantic to have a cabin high in the hills of the Carolinas, if it takes you two flights, a rental car, and a three-hour drive to get there, it will be more of a hassle than a pleasure.