Article authored by Jim McKinley
When you’re in the market for a vacation home, it’s important to do some thorough research before making any decisions. There are a lot of details to consider, from the location of the home to whether you want to use it solely for your family or rent it out to help pay the mortgage and upkeep costs. Not only that, you’ll also need to decide who will take care of it when you’re not there, so setting a budget is essential.
Sit down with your spouse, partner, or financial advisor to hammer out the details before you do anything else. Once you have a good plan in place, you can move on to the bigger things, such as how much time you’ll spend there and whether you need a pool. Buying a second home is a big commitment, especially if you are a retiree with health or mobility issues, so it’s important to look at the big picture from the very beginning.
Here are some great tips on how to get started with buying a vacation home.
Location is key
When buying a home, location is always key. A vacation home is especially dependent on location, because not only do you want it to be a getaway, it should also be an appropriate distance from your current home. If you don’t want the extra expense of hiring a caretaker during the weeks you’re not inhabiting it, the home should be close enough to you that you can travel there to make repairs and check on things.
Keep in mind that homes in very touristy areas will be more expensive, and if you’re going to rent it out for a portion of the year, you want to make sure it’s in a prime location. Unless you buy a cabin in the woods, renters want a place that’s close to local natural wonders (like the beach), shopping, restaurants, and family activities.
View it as an investment
Whether you’re going to use the vacation home solely for your family’s needs or rent it out is a big decision. If you want to view it as an investment, renting it out can help you make money for several months out of the year, which will certainly help when it comes to paying the bills. However, you’ll need to remember that a rental property may require different insurance, and you may need to make updates to the home to attract renters, which will cost some money up front. Look for ways to save money, such as making small repairs yourself rather than hiring a caretaker. You may be able to keep insurance costs down by looking for a home that doesn’t have a pool or buying in a city that isn’t prone to hurricanes or tropical storms in the summer. Read on here for some great tips on buying a second home.
Set a budget, then spend beneath it
Set a realistic budget for your vacation home and factor in everything you’ll need to purchase for it, including decor, furniture, kitchenware, and bathroom accessories. Remember to include taxes and insurance. When you come to a final number, start looking for homes that fall well beneath that line. You want to have some padding in your budget for maintenance and updates, unexpected repairs, and lawn care, so don’t make things so tight that you’ll be stressing about how to make the mortgage payment.
Buying a second home can be a lot of work, so make sure you and your spouse or partner are up to it. Once you find a good location, stay there for a week or two, if possible, to check out the community and get a feel for the type of people who live there. This may help you make a decision about whether or not to rent.