Does the thought of escaping winter get you excited? Have you found a wonderful resort community, and are hoping to invest? Whatever your reason for wanting a vacation property, finding your perfect home away from home can be challenging, especially for the first-timer. Armed with these 5 tips however, you'll be that much closer to making that dream into a reality.
If you're in the market for a vacation home, finding the right location will be crucial. Travel time can affect how long and how often you enjoy your vacation home. As a general rule, opt for a property near a major city within driving distance from your primary residence. While a remote island beach cabin may seem great, the long commute will take away from the romance. It also makes it harder to check up on your 2nd home. Research potential locations and be sure to consult a local real estate agent.
Rent Before You Buy
If you're interested in a property in a particular area or resort community, rent a similar property and spent some time in the area first. A vacation home is a major investment, and any wise homebuyer will do their homework before buying. Get to know the area, and see if your potential property is truly right for you. If you plan on spending a significant amount of time at your vacation home, be sure to consider the changing seasons. While a tropical paradise may seem great during dry season, you may not be so keen on battling torrential rains during storm season.
Anticipate Carrying Costs
Before you buy your vacation home, plan for all of the expenses that come with owning a 2nd property. Does your total budget take into account property taxes, maintenance fees, utilities, home insurance, and landscaping costs? If you plan on renting out your vacation home while you are away, do you have money set aside for a property manager? According to the experts, homebuyers should set aside 2 percent of the home's value for such costs.
Consider Your Vacation Home's Rental Potential
When shopping for your vacation home, look for properties that have good rental potential. Renting your home can offset carrying costs while you are away, and allow you to own your 2nd residence faster. Even if you never plan on renting out your place, these properties will have a higher overall market value, which makes them easier to sell down the road. Look for properties near big cities or resorts in areas with high rental occupancy. These are more likely to provide you with a steady flow of rental income.
Be Prepared for a Longterm Investment
Vacation homes like all real estate are susceptible to market changes. If anything, they are more sensitive to market downturns, which means homebuyers should be prepared for a longterm investment. If property values plummet, you won't be in a position to sell anytime soon. Instead, ride out the downturn and consider renting out your property. This will allow you to supplement some of your carrying costs until the market recovers.
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