It’s unsurprising to all that 2020 and 2021 were intense years, in more ways than one, of course. However, the real estate market globally saw lots of changes as people experienced job shifts and reevaluation of how they wanted to live their lives.
The pandemic led to many millennials and Americans of all age groups getting priced out of the metro areas they called home, and while COVID had a lasting impact on the job market, many first-time buyers have found a workaround to purchasing their first property.
Finding a place in the housing market
Many young renters have pushed a trend of purchasing investment properties or vacation homes that are typically recognized as a “second home” before even buying their first.
Why? The truth is, prices have been skyrocketing long before the pandemic hit, but with COVID came a shift, and first-time buyers are finding ways to continue living in the urban areas they like while also getting their foot into the market. With remote work becoming more common, having a secondary residence in a less competitive area can be more sustainable and attainable — plus, having a place to escape to for regular breaks or vacation doesn’t sound so bad.
Pros of buying a vacation home first
What are some of the benefits of buying a vacation property before a primary residence? You can continue to build equity while primarily living in the city you love, all while making cash on the side from renters.
The Mortgage Reports puts it best, “This strategy is best for buyers located in high–cost housing markets, where buying a primary residence just isn’t feasible. You can build wealth through real estate, without having to bust your budget or move outside the city.”
Considerations to keep in mind
It can be easy to get swept up in this idea because it seems so perfect, but even though it’s not your first home, this is still a huge purchase, and there are many factors you should consider before making any final decisions.
Will renting be a part of your plan? There are tons of things to consider if you will be renting (e.g., what platform will you use, will you allow long-term renters, who will clean and perform upkeep).
Speak to an accountant first about any tax implications
Will you be okay paying to maintain a home you don’t primarily live in?
These may not seem like total deal-breakers, but as you dive into your first major property purchase, these questions and reminders can help you make the best decision for yourself.
With all of this in mind, why not start taking a peek at what types of properties are out there? If you’re not tied to the idea of purchasing a vacation property near where you live, here’s a list of some of the most popular locations for vacation properties in 2022:
Grand Lake, Colorado
Coeur d’Alene, Idaho
As you can see, there is potential all over! You just have to sit down and look at what works best for you. We hope these tips help as you get started. Take a look through Land Hub’s current listings to see if any match your ideal home lists!
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