Is buying a vacation home one of your goals? It certainly sounds like a dream come true! Dreams do need to be grounded in reality, however. There are many things to research and consider when looking for a vacation home. Read our tips to help get you started.
Take the Time
It’s important to spend a lot of time at your favorite vacation spot before investing there. Renting a house is the best way to see if the location is really a good fit. Visit the area several times, during different seasons and holidays and during off-peak times too. Stay as long as you can, up to two weeks if possible. This way you can truly experience the location in a variety of different ways. You will get a more complete picture and it will be easier to determine if it is the place for you.
Convenient Location
A second home is a getaway for you and most people want it to be a gathering place for friends and family. According to the National Association of Realtors, almost 90% of buyers purchase a vacation home that’s less than 200 miles from their primary residence. If it is relatively convenient to get there, you and your guests will use it more often.
Be Realistic
Take an honest, non-emotional assessment of your travel habits. If you’re not already visiting your favorite vacation spot regularly, then buying property there may not change things. Owning a second home brings a lot of new and costly elements. Expenses such as property management, maintenance, cleaning, and landscape upkeep can really add up. Will you visit frequently enough to warrant the additional stress and responsibilities, or is renting the best choice?
Taxes
The tax implications of a second home can be tricky. If you plan on renting out your vacation home, you must pay taxes on that income. In some states, the property tax on a second home is higher than that on the first. Make sure you understand exactly how a vacation property will affect your taxes before making a purchase.
Other Factors
Setting your budget, choosing the right time to buy and hiring a property manager if you plan on renting to other vacationers are a few of the other factors to consider when deciding if a second home is right for you. Before making the final decision, you may want to explore alternative ownership options such as co-owning or see if you can make long-term reservations at vacation home you already enjoy. Good luck!
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