Owning a vacation home can be an excellent investment for your financial future. Vacation homes often serve as both a second home and an investment property that brings in rental income to offset some of the costs of ownership. Before diving into purchasing a vacation property, consider these things:
Location – It may sound like a no-brainer, but always visit and be sure you love an area before you purchase a vacation home there. Once you purchase the home, you will likely not have the freedom to change the scenery as often as you would with a hotel or timeshare. Do your research and make sure that the location of your home is safe as well as profitable for rental or resale.
Affordability – Before purchasing a vacation home, make sure you can afford it. While a vacation home is an investment, real estate investments are not liquid and are not guaranteed to turn a profit.
Costs – As with your primary residence, you will have to pay taxes, insurance, and other costs for your vacation home. Remember that even when you are not there, you will still be charged for water, electric and other utilities.
Rental – A smart decision when purchasing a vacation home is to incorporate rental potential. Renting your vacation home while you are not using it is a great way to offset the financial burden of a second home.
Holidays – If you have decided to rent your vacation home, consider the “high season” of the home’s location. While you may want to use the home during the peak seasons, it will be more profitable to allow the home to be rented for a portion of that time.
Upkeep – If you think you will be visiting your home infrequently, a local property manager would be beneficial for the purposes of home maintenance and handling rentals. A property manager will add an extra cost to your home, but it can pay off, especially if something goes wrong and would otherwise go unnoticed for a long period of time.
If you are interested in learning more about purchasing a vacation home, I would love to help you with your financing options. Call me today!