Is there anything like being on vacation and dreaming of the home you would buy in a place that touches your heart? Whether it's the mountain views of the perfect cottage or a house on the beach that piqued your interest, owning a vacation home can be a great investment.
A vacation home can serve as a getaway for you and your family as well as become a secondary source of income. However, before you dive into a second-home purchase, make sure you do your research and consider all the factors involved, to avoid these common mistakes:
Location - For many people, a vacation home is just as much a business investment as it is a personal property. While it is your vacation home, and you want it to be in a location that you will enjoy, if you plan to use this property for rental income, its location must be one that others will want to rent. Additionally, you will want this home to be accessible by car from your primary residence. As alluring as an exotic location may be, if the home is not easily accessible, you will use it less and be further away if something goes wrong.
Affordability - For most people, the primary purpose of purchasing a vacation home is having a place where you can escape to unwind and reduce stress. If you buy a home that you cannot afford, however, you may end up increasing your stress. Make sure to discuss your financial situation and future financial goals with a professional before making a purchase.
Buy for you - Vacation homes should be purchased with the goal of having a vacation oasis for you and your family. Due to the ever-fluctuating housing market and economy, rental income is certainly a benefit of owning a vacation home, but this should be a secondary factor in your purchase decision. If you buy based solely on having secondary income, you could wind up disappointed if your rental income isn't as high as expected or tenants don't take proper care of your property.
Research - Before purchasing a vacation property in any location, do some research. Investigate what kind of insurance you will need, based on the weather conditions of the area. After determining if renting is allowed, determine the area's peak seasons if you plan to use the property to generate rental income. Make sure to explore all facets of the home and the area before making your final decision.
Think you may be interested in purchasing a vacation home? Call me today; I would love to go over your financing options. If you need a financial advisor or real estate agent to help you throughout the process, I can refer you to some of my trusted partners.