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Deciding you’re ready to purchase a second home is an exciting decision that can lead to an abundance of happiness, relaxation, and memory building with friends and family for years to come. However, before you purchase a vacation home, you’ll want to make sure you’re prepared and have taken all of the necessary factors into consideration.
If you’re thinking about buying a second home to vacation in, there are a few things to consider before you take the plunge. After walking through all of the appropriate steps, you’ll find yourself the owner of your very own vacation retreat.
Let the weekend and/or week-long getaways begin!
1. Can You Afford A Vacation Home?
When people first think about owning a vacation home, many are quick to shut down the idea, because they assume it’s something they’d never be able to afford. However, the idea may not be all that crazy. As with any home purchase, one of the first
steps you’ll want to consider is affordability and how much you are willing to spend on a property.
After you’ve done the necessary research and crunched some numbers, you may find that owning a second home is actually quite possible. The National Association of Realtors
states that “the median household income for those who own a vacation property is $94,380, only about $15,000 more than the median income for those who own their primary residence ($79,650).”
However, it is
important to calculate all costs associated with owning a vacation home before making a purchase. According to US News
, “the actual purchase point is only part of what you will need to spend. You will also have to pay utilities, HOA or condo fees, property taxes, insurance and the cost of furnishing a new home down to the spoons and forks.” Once you gain a better understanding of all expenses that come with owning a second home, you’ll be able to acknowledge which price point works best with your budget. There’s nothing more stressful than purchasing a vacation home you can’t afford, especially
when it’s a place meant for sitting back and relaxing!
2. Is the Property in the Right Location?
Vacation homes are meant to serve as an escape from reality - a place for you to unwind after a long week and get away from the chaos of daily life. It’s a place to eat, drink and be merry with friends and family, without any worries. However, if it's going to take you 6 hours to get there, it will shorten the amount of time you have to actually enjoy your secondary home.
Location is key in any residence you choose, so be sure to determine:
- The type of setting you want to vacation in
- How far you’re willing to travel, and
- How often you’re planning on visiting.
It’s important to purchase a vacation home where you can best utilize the time spent there, so be sure to consider distance and your frequency of visits before taking the plunge on such a large financial commitment.
3. Is There Rental Potential?
According to the National Association of Realtors
, “40% of vacation buyers bought a home at the beach, while 15% bought at a lake front”, proving the popularity in these types of destinations - especially when it comes to renters. When purchasing a vacation home, some potential buyers are looking to attract renters for an easy way to bring in some extra income. While this may sound like a good idea - and in many cases, it is - it’s also important to consider the taxes you’ll be paying on a rental property.
You’ll want to check with your town and Homeowners’ Association to make sure renting out your property is feasible. It’s also important to remember that your availability to vacation may overlap with potential renter demand, which could cut into your R & R time. If you plan to rent out your vacation property, don’t neglect to consider all the pros and cons that go along with that decision.
4. What Activities Will the Property and Location Provide?
Finally, when looking for a vacation home, you'll want to consider which types of activities you'll want to indulge in. If you buy a home by a lake or ocean, chances are you’ll spend a lot of time swimming, boating, and/or fishing. On the other hand, a home in the mountains is the perfect getaway for people who love to get outside any time of year and enjoy activities such as hiking, skiing, or sight-seeing. It’s important to take the time to really think about how you’ll want to be spending your free time, so be sure to choose your location wisely!
Likewise, you’ll want to consider the proximity of the property to town and the highway. If you only want to hear birds chirping and potentially spot a moose every now and then, a home in the woods may work for you. However, if you're interested in being close to restaurants and nightlife, or a downtown area that offers alternatives on a rainy day, you might want to be a bit less off the beaten path.
No matter which type of vacation home you’re interested in, make sure that the surrounding area accommodates both your wants and needs for the foreseeable future.
Ready to Start Shopping?
If you’re considering a vacation home, don’t forget to think about the above factors before you snatch up the first property you see. Get in touch
with a Red Post Realtor today to find out what to look for in your second home.