Tips to Consider Before Buying a Vacation Home

 

 

vacation-home2

 

 

 

 

 

 

 

It’s all about location
It’s important to think through why you are purchasing a vacation home. How do you plan to use it? Is it a place for your loved ones to gather on a regular basis, or only once a year? If you’d like to use it regularly, you’ll want to choose a location that’s no more than two hours away. While a condo or house in another country may be desirable, you need to factor in travel time and expenses which could limit how often you can use the property. It’s also helpful to visit the location during different times of the year to learn what to expect based on local characteristics.

Think long-term
Determine what your long-term goals are. Is the vacation home going to be used as an investment? While assets often fluctuate in the short-term, vacation properties may appreciate over time if they’re located in popular areas.

Consider the home’s rentability
Renting out your home can help offset some of the cost, while allowing you to build equity. Be prepared to make some concessions, like using the property during the off season. When determining rental fees, analyze features and prices of similar vacation homes nearby. Check comparable rental listings in local publications and on Craigslist. See what other landlords are charging for homes and apartments that match your property’s size and amenities.

Set realistic expectations
Don’t underestimate the amount of time and/or money you’ll need to set aside for cleaning, maintenance and repairs. Working on the home may not be the most relaxing way to spend your time off, but it’s a necessity if you don’t want to pay someone to do it for you. Consider the costs vs. benefits of hiring a property management company to handle the upkeep. The cost of this type of service is typically around 6 to 8 percent of the rental rate.