Tips for Buying a Vacation Home
Whether it's a family retreat in the mountains or a beach house to escape to over the weekend, purchasing a vacation home comes with a certain level of excitement and can be a lucrative real estate investment. However, before you buy, there are some things you should keep in mind to ensure the process goes smoothly and that you get the most for your money.
Checklist for vacation home buyers
Here's a quick checklist of items to consider when buying a vacation home:
If you don't want to do it yourself, find a reputable real estate agent who can help you find a vacation property that meets your needs and is within your price range.
Create a realistic budget for the property that factors in repairs, ongoing maintenance, and other expenses. You'll need this as a reference point when evaluating multiple properties - not only as they come on the market, but throughout the buying process.
Consider costs beyond the purchase price for long-term vacations to help offset your expenses. These may include annual taxes, insurance premiums, utilities, HOA fees, and deposits.
Where are you going to live when you're not using your vacation home? Keep in mind that other properties require their own expenses that should be factored into the overall budget.
Do your homework before you start looking. You should research the area thoroughly, learn about local zoning laws for second homes and familiarize yourself with other costs associated with owning a vacation home.
When you're ready to buy, make sure you have an inspection of the property performed by someone who knows what they are doing. He or she will look for things that could become expensive problems down the road, including structural issues, mold, or mildew.
Check with your insurance company about coverage requirements and costs before you purchase. Some companies may not cover homes in high-risk areas where hurricanes are common. Others may require you to increase your deductible if you want flood coverage.
Don't forget about maintenance. It may be a good idea to develop a plan before you buy that outlines the things you're responsible for as a homeowner, such as yard work and cleaning, as well as those your management company is responsible for, such as garbage removal and lawn mowing.
Additionally, if you're considering buying a vacation home, consider purchasing it through an owner association. This can give you access to amenities such as tennis courts and pools that you'd otherwise have to pay for separately.
It's also a good idea to find out if the property is located in an area where there could be environmental concerns. If it is, make sure you research current issues to avoid expensive headaches down the road.
Before signing any agreements, make sure you know exactly what you are getting into and how often you will have access to amenities. While some properties may have multiple owners who each get their own days, others are available only on an all-inclusive basis, so everyone shares the same amenities.
Taking care of a vacation home can be tough when you have to split time with family and friends. Be sure to evaluate your list of priorities before making a decision about buying one. If you're not sure, it may be best to put off buying until you are.
Last but not least, remember that your big decision is just beginning when you put contract ink on paper. You’ll want to decide if you’ll be purchasing the vacation home in cash or if you’ll be taking out a mortgage. If you will be taking out a mortgage, then you’ll want to decide which type of mortgage is best for you. You also still need to think ahead to what you're going to do with the property when you stop using it and what your ongoing costs and respon