Owning a vacation home is very much the dream on everyone’s mind, especially after experiencing the pandemic of 2020. The goal is getting away and relaxing. Completely understandable.
Step one, own a primary residence. Step two, be open to your options. That’s where we come in. No tactics to a hard sell. Just education.
We need to understand your current situation and concerns so we can properly inform you of the pros and cons to your options. I emphasis that heavily. Only you can decide if it’s right for you. We’re here to guide you along to the best outcome.
The purchase of a vacation home is very different to purchasing your primary residence especially since it might be in an area that you only travel to on vacation.
When you’re in your vacation mode, you make different decisions and have to take a step back to say, if I’m going to vacation here more frequently, what will living here be like?
Vacation Home Tips
- Consider how you’ll use the home. Will it just be for family and friends, or do you plan to rent it as well? And realistically, how many times will you use it per year?
- Evaluate locations. Are there enough amenities and attractions to keep you and renters coming back year after year?
- Talk to the locals. What do they love about the area? What’s changing? And what’s it like during the off season?
- Study local laws if you plan to rent the home. Local rules may restrict rental periods or cap the number of times you can rent each year.
- Calculate costs. Along with mortgage, insurance, property taxes and association or amenities fees, plan for wear and tear. (A good rule of thumb: Budget 1% of home’s value on repairs annually.) And if you intend to rent, add the cost of a property manager.
- Talk to an accountant. This person can advise you on such issues as the tax implications of rental income and changes in Federal tax laws that could impact deductions.
- Test before you buy. Ideally once you’ve settled on a spot you should rent in every season so you can gauge busy and slow times.
- Work with an experienced Realtor. Pick someone who knows the community and who can recommend the other experts you’ll want to consult. Especially consider agents with Resort & Second Home Property Specialist certification (RSPS) as they have completed additional instruction to help homeowners like you.
- Take your time. Don’t let the excitement of one great vacation push you into an impulse decision to buy.
Sources: Bankrate.com, Money Magazine, HGTV, Biggerpockets.com courtesy of Florida Realtors.
A well informed homebuyer will make a smart home purchase regardless of the housing market conditions.~Michelle Richard Broker/Owner Share on XIn Conclusion
There’s a lot to consider before deciding whether a vacation home is a good idea for you. Be sure to weigh the pros and cons, consider the tax implications, and know what to expect when it comes time to apply for financing. Most importantly, let a Professional REALTOR who does this full-time, in the area you want to buy, guide you through the twists and turns to make it a smooth process.