With the summer season kicking off, most of us have vacation on the brain. With that being said, it’s important that if you decide to purchase a vacation home, you take your time to do research and consider every aspect of this investment rather than making an emotional decision.
It can be tempting to make a big decision like this, especially after returning from a vacation, but here’s what you should keep in mind before purchasing a vacation home.
The Pros and Cons of a Vacation Home
This may seem like a short list that favors the “pros,” but there are some factors that can have big implications on your life. Here are some of the most common and negative aspects of buying a vacation home.
Pros of purchasing a vacation home:
- It’s an investment, and just like your primary home, it will likely increase in value (especially if you settle near popular areas like a beach or mountains).
- Your own vacation experience can be enhanced as this property will allow you to save money on a place to stay and allow you to stay for longer than you may stay in a vacation rental. Plus, it will give you a place to invite loved ones for some R&R!
- Make money by renting out this property during the months you won’t be there or even renting it out to other vacationers.
Cons of purchasing a vacation home:
- Vacation properties are expensive! You’ll be paying another mortgage, property taxes, insurance, and utilities. These costs could mean less savings for other areas of life like a college fund or retirement.
- Must consider the maintenance and security needed when you’re not there. Even with today’s technology, you can monitor your property from afar, but if your vacation home is far away from your primary residence, what will you do in the case of an emergency?
- Will you get sick of the scenery? This is why it’s especially important not to make an emotional decision when purchasing a vacation property. Do you think you’ll find yourself wanting a change of scenery in a few years? Will you stop yourself from taking vacations elsewhere because of your investment in this home?
Important Things to Know Before Buying a Vacation Home
With the above pros and cons in mind, there are still some need-to-know factors that you should consider when looking to purchase a vacation home.
- Be specific about what you want from your vacation home. Where do you want to be? How do you envision yourself and your loved ones using this property? How often will you be able to visit? You should be able to provide detailed answers to each of these questions and use them to help you find the right property.
- Get clear on the financial impact. As mentioned above, vacation homes are costly! Oftentimes many buyers don’t realize that mortgage rates are higher on a second home, and the rules for financing a second home differ from those of a primary residence.
- Research the area. While buying sight unseen has become more and more common in today’s real estate market, but with an investment this big, you don’t want to go in without knowing the area. Does the home have good wifi, access to restaurants, shops, etc.? These are all things that will be important for you to know whether you’ll be living there or renting out.
Owning a vacation home is an exciting idea, but be sure to do your research and crunch the numbers so that you find the best fit! Ready to purchase? Check out Land Hub’s current properties.
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