Buying a vacation home can change the course of your life. Although there are extra expenses, the benefits are about more than just money. If you’re asking yourself, should I buy a vacation home? This guide is for you.
From the location to the potential rental income, we’ll go over everything you need to know about buying a second home. We’ve rounded up 10 pro tips to help you weigh the pros and cons. Let’s start planning for your new vacation home.
1. Is It a Good Idea to Buy a Vacation Home?
Before you start pinning décor ideas for your new vacation home, there is a lot to consider. A second home is a big investment. The first thing you should think about is why you’re looking into this. Real estate professionals at the Domenica Group, for example, can help you through this process.
Most people buy second homes to spend more time with family or to enjoy a vacation destination more often. If you’ve fallen in love with a popular travel destination, you’re not alone. Some people who live and work in an expensive real estate market are looking to buy a second home before they even buy their first.
2. Think About Your Long-Term Goals
Once you know your reasons, you can determine what is important to you. Your long-term goals could be earning rental income or making more memories. These goals will help you narrow down your location.
If your goal is relaxation in the quiet, you may want something more isolated. If you want a vacation-vibe with places to walk, choose a bigger city. Your long-term goals will also help you with your budget. If you’re in an expensive market, you may need to rent it out for a part of the year or co-own with someone.
The location will be a big consideration here. If you want to use the home every week, stick to a place that is drivable on the weekends. If you want this to be a bigger vacation home and use it for longer periods of time, a plane ride won’t be an issue.
3. Research the Area Before You Buy
Before you buy your second home, you’ll want to spend a lot of time in the area. Live like a local and walk the neighborhoods.
If you vacation there often already, it’s different than living there. You’ll want to really immerse yourself as much as possible. Look at the location as a homeowner.
Take a look at the prices of homes as well. Look at how they have appreciated and if there are a lot of vacation rentals. Homes in desirable locations will give you a lot better bang for your buck.
4. Use a Local Real Estate Agent
To help you better understand the real estate market, you’ll want to use a local real estate agent. Your local agent can help you navigate the areas and give you a better idea of the budget.
Your real estate agent is also on the ground there all the time. If this is your second home, chances are you don’t live there currently. They can keep their eye on properties coming on the market for you. Your agent can also handle things like the inspection and other closing items that you can’t do if you’re far away.
5. Deciding Between Buying a Vacation Condo and Buying a Vacation Home
The type of house you’d like is another big consideration. Think about if you’d prefer a condo or a single-family home. A condo will often come with amenities. You may have a pool, a fitness center, as well as a doorman.
If you prefer privacy and your own space, a single-family home might be a better option. Price is also a factor. Consider your budget and if you’ll be renting out the home at all. Some condominium associations limit the number of rentals. There are also more rules to follow in terms of renovations and construction.
6. Shop for the Best Mortgage
If you’re purchasing the home in cash, a mortgage isn’t a factor here. If not, you’ll want to do a little homework and shop for the best mortgage rate. Your mortgage rate will help your budget stretch further.
Take some time to speak with different lenders and see what your options are. Sometimes using the bank you already use for your first home can be helpful. In other situations, it’s better to use a local bank near the home you’re buying.
7. Figure in Additional Costs and Expenses
When you’re shopping for homes, you’ll want to take note of additional costs and expenses. A condo will usually come with association dues and other fees. If you’re buying a fixer-upper, you’ll need to make a construction budget.
Whatever your plans are, always round-up. It’s better to have more in the budget than to come up short. With a vacation home, you’ll save a decent amount of money on hotels and dining out.
8. Consider Co-Owning the Property
To help your money go a little further, consider co-owning the property with someone else. Co-owning a home also means you can split the expenses. Utility bills and association fees can be divided up between everyone. You can also get a larger home if you and another family are pooling your money together.
9. Hire Local Maintenance Professionals
If you live far away from your vacation home, you may want to hire local maintenance professionals. It can be difficult to take care of cleaning and landscaping if you live far. A local pro can take care of your lawn, snow removal, home cleaning, and more.
10. Rent Out Your Property
One of the best ways to pay for your vacation home is by renting it out. If you’re in a desirable vacation area, your home can have great income potential. Even renting it out a small part of the year can help you bring down your costs. Keep in mind that if you live in an association or a condo, rentals might be limited.
Buying a Vacation Home and Making Memories
Buying a vacation home is an exciting time. A second home can be a place for fun, an investment opportunity, or both. A second home can bring more family time and relaxation to your life.
Whatever this next chapter brings, know that you’re in store for a lifetime of new memories. For more great real estate and investment tips, check out the blog section.
