Approximately 7 million Americans own two homes.
Is it a dream or an unrealistic fantasy? Owning a dream home at your favorite getaway is both an investment and a way to secure your future.
Making the decision to buy a vacation house is not something that should be done lightly.
Here is the best advice on buying a vacation home.
1. Use Cash to Pay for Your Vacation Home
More than 29% of all Americans pay cash for their vacation homes. This is due to the high mortgage rates associated with buying a second home. The banks will also demand a higher credit score, which you may not have or even more collateral.
You shouldn’t be discouraged from buying your vacation house due to high mortgage rates. Taking a loan may also not be an option because it may require a larger down payment. That puts you at a tricky spot and the only available alternative may be to pay for the home in cash.
2. Check the By-laws of any Vacation Houses you are Interested In
Before buying a vacation home, check the by-laws of the association selling you the houses. This will give you valuable information that you can use as a homeowner. For instance, some vacation homes cannot be rented out and this is something you can take into consideration before making your decision.
Reading the by-laws will also give you a chance to determine the best location to buy from. Many villas for sale will have unbeatable offers at first sight but reading the by-laws and getting more information will give you the true picture of what you are really buying.
3. Rent the Vacation Home Before Making a Decision to Buy
Buying a vacation home is a big step forward and there are a lot of expenses to consider. If you are thinking about buying a vacation home somewhere. First, consider the option of renting it out.
This will give you better knowledge about the home and might even convince you that the decision to buy is worth it.
Renting out will also allow you and your family to take a vacation elsewhere. But owning a vacation home will mean that you have to incur all the expenses all-year-round for a home you visit only twice or once a month. Try renting first, if it works out well, then buy the house.
4. Consider Your Retirement
Your vacation home could be used as your retirement get away. But first, think about your retirement lifestyle and how much savings you have after you will complete your employment.
A house is a long-term asset and taking into consideration where, when, and with how much you will retire should be taken into consideration before making the decision to buy a vacation home. It’s also easier to buy the vacation home of your dream while you are still working because it gives you a chance to pay for the mortgage or accumulate enough cash to pay for it in cash.
Making an Extra Income
After buying your vacation home you can earn more money to supplement your income by renting it out. This will give you a chance to have more income and also the money required to maintain the house.
Renting out your vacation home during high peak seasons will also give you the chance to take a vacation elsewhere. However, you should consider tax laws because the IRS requires that you pay rental tax for any property that is rented out for more than 14 days.
Buying a vacation home should not only be for leisure but also as an investment.
Buying a Vacation Home
The young generation is buying a vacation home much earlier than their primary homes due to the high cost of owning a home in the city.
If you are planning to retire, or you simply love a certain location during a specific time of year. Make the all-important decision to buy a vacation home.
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