You work hard. You deserve a vacation. If you’d like to enjoy that blissed-out state of mind more than just two weeks a year, you may be thinking about buying a vacation home.
Owning a second property in a favorite destination may sound like a dream come true. But as with any real estate purchase, you’ll want to give this decision plenty of careful consideration.
There are many benefits that go hand-in-hand with owning a home in a coveted locale. For example, you can furnish it as you wish and leave all your vacation-related gear there year-round. So, if you’ve been lugging skiing or surfing gear back and forth, you’ll revel in the ease that comes with making the switch from renter to owner. You can also enjoy more getaways throughout the year at times that are most convenient for you as opposed to when it works best for your landlord.
At the same time, taking on a second home is a major expense. And, as you know from your primary residence, all properties demand near-constant upkeep.
If you find yourself wondering if buying a vacation home is the right move, take a look at some of the questions you should ask yourself before you put in for those days off.
1. Can you afford it?
Any time you buy property, it’s a big investment. Before you begin house-hunting and get your heart set on a place you can’t afford, take a look at your budget and determine what makes sense.
Don’t forget that in addition to your mortgage, you’ll need to pay property taxes and homeowners insurance. If you purchase a condo or townhouse, factor in homeowners association fees as well. And don’t forget there will be those ongoing expenses in the form of utilities and general maintenance.
Of course, you can choose to rent out this property and generate a little income. But before you count on this as a way to pay the mortgage, talk to local real estate agents to get a feel for what you can realistically expect in terms of annual rental revenue.
You’ll also want to speak with an accountant or real estate attorney who can provide accurate information on how this purchase may impact your tax situation.
2. How often will you use it?
Who wouldn’t love a beachfront bungalow in Maui? But if Hawaii is a long and pricey plane ride away, chances are you won’t get much use out of this vacation home. When you’re looking for a second property, consider those places that are easily accessible so you know you’ll be able to enjoy it as frequently as you wish. Most people who purchase a vacation home choose one that’s within a two-to-three hour drive.
Also, will your family’s schedule allow you to get away as often as you hope to? Will teens fight you about leaving friends behind or lobby to bring their pals along, which may mean you need additional space?
Before you buy, you may want to consider renting a home in your preferred destination for a full season to see if you will truly take advantage of the place as often as you think you will. This also gives you an opportunity to get a feel for the area as well as traffic and weather patterns to see if it’s as ideal as you imagine it to be.
3. Are you ready and able to handle an emergency?
Trees fall, pipes burst, a renter has an accident. All these unpleasant events can happen when you least expect them. In some cases, you may be able to send someone to handle the situation for you, but in others you may need to be there to deal with it yourself.
Especially in tropical locales where hurricanes occur, you can find yourself facing unforeseen expenses in the form of insurance deductibles or repairs as a result of Mother Nature. Are you prepared to drop everything to take care of this second home should the need arise?
It’s hard to imagine saying “no” to a vacation home if you have the means, but it’s wise to consider all aspects before you jump in. Before you make a purchase, just make sure it’s something you can comfortably afford, manage, and enjoy to the fullest!