Buying A Vacation Property

For many people, owning a vacation home is a dream come true.  Having a place to get away and relax can be wonderful, but it’s also a big investment that shouldn’t be entered into lightly.  If you are in the market for a vacation property, make sure you know what to expect.

Consider Location And How Often You Will Visit

One of the biggest things to consider when it comes to buying your new vacation home is where it will be located.  Take into account how far you can reasonably drive for weekend visits.  Since most trips out to a vacation home will encompass a Friday through Monday round trip, look at the time you will spend on the road, allowing for Friday evening commute traffic as well.

A longer drive means you probably won’t visit as frequently, so another important thing to consider is whether it is worth the cost if you can’t go as often as you’d like.

Will You Rent It Out?

Many people help offset the cost of owning a vacation home by offering it as a vacation rental when they aren’t using it.  While this can be a great way to help pay the mortgage, there are a lot of things to consider before you jump into the Airbnb game.

Homes that are not fully owner-occupied have different insurance needs, so make sure that you have the right coverage.  Also make certain you’re permitted to use the home in this manner; some condo and homeowners associations don’t allow it.   You will have to consider whether you will use a service like VRBO or handle rentals yourself, as well as who will do the cleaning.  Finally, bear in mind that homes used as vacation rentals will need to be furnished and stocked in a different manner; you may not be able to leave your personal items there, which means more hauling back and forth.

Consider All Of The Costs

Owning a vacation home means you will have a lot of added costs to think about.  In addition to another mortgage-unless you are able to pay cash-you will have a second set of property taxes and homeowners insurance bills to pay.  You will also have to pay maintenance costs on two homes, both interior and exterior.

While it’s not uncommon for a vacation home to be sold furnished, it’s not always the case.  Keep in mind the potential cost of having to furnish an entire second home.  That includes everything from beds to silverware, and can add up fast.

Owning a vacation property can be very rewarding, both for short-term enjoyment and as a long-term investment.  Before you buy, however, make sure you have done your research.

As a mortgage consultant, I help my clients make informed decisions about buying, building, and refinancing their homes.

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