There are many things you must take into consideration. Although your lifestyle should be the determining factor, other just as important details should be addressed. As the demand for a second home rises, over 20 million Americans are expected to make the investment within the next decade.
Whether you’re seriously considering the purchase of a vacation home or just toying with the idea, we advise that you embark on this venture after carefully reviewing our helpful insights below. Continue reading our step-by-step process on how to buy a vacation home.
How to buy a vacation home
Assess your lifestyle
Does your current lifestyle allow for a second mortgage? Buying a second home will certainly put you further in debt. You may be getting a great deal on the home, but if it will leave you with very little spending money at end of each month, is it worth the bargain?
Will your day-to-day lifestyle suffer as a result of this purchase? Although you may have made sacrifices when purchasing your primary home, it is best advised that you approach the idea of buying a second home with a slightly different mindset.
These are just some of the many questions you should consider when buying a vacation home.
Consider your wants and needs
Take the time to find the right vacation home for you and your family. You won’t feel the same pressure buying your second home as you did with your first. Therefore, if the deal is not particularly up to your standards, you can just walk away, until you find the perfect place. Greatly consider the amount of time you will be spending in your vacation home.
Will this house be for weekend getaways or seasonal trips only? If you plan to use your vacation home every weekend, then you must greatly take into consideration the distance you will have to travel each week. Anything longer than two hours may be too long of a trip.
Consider your options
Vacation homes can mean different things to different people. They also come in many different sizes, shapes, and prices. One option can work greatly for someone else but may not be exactly ideal for you. For instance, single-family homes offer more privacy, but unfortunately come with no maintenance support whatsoever.
It will be your sole responsibility to take care of the property year round, even if you only visit once a year. Condos on the other hand, will come with neighbors and less privacy but will have lower maintenance obligations than a private home. This is a great option for folks who use their vacation home one season per year.
Your vacation home will certainly need to be up kept and functioning as much as your prime residence. You may get away with not tending to the lawn as much but you will have to take precautionary steps to avoid significant damage to the property, such as frozen pipes.
Damages resulting from negligence can end up costing you thousands. You can visit the property to ensure everything is working properly or you can hire an individual to occasionally drop by and do light maintenance work if necessary.
Rent it out
If you won’t be using your vacation home for the latter part of the year, consider renting it out to offset some of the expenses. Not only will you bring in extra cash towards mortgage and maintenance costs, but you can also deduct expenses during tax season. Different rules and regulations apply when it comes to deducting expenses on your taxes.
Consult with your accountant to figure out exactly what you’re responsible and eligible for. If you decide to rent out your vacation property, be sure to utilize a trustworthy property management company, they will take a lot of the worry and stress off your shoulders.
Also be sure to screen your tenants and demand a deposit on the property if necessary. Unreliable tenants can end up costing you much more than the monthly mortgage if you don’t tread with caution. Examine your choices to make the best decision that works for you.