As the number of people purchasing vacation homes is on the rise – many a result of the social limitations caused by the coronavirus pandemic – we offer this helpful guide for those looking to buy a getaway property of their very own.
Benefits of a Vacation Home
If you’re a frequent traveler and enjoy escaping to one very special spot each year, investing in a vacation home can save you money in the long run. Even better, properties in popular vacation areas often increase in value over time.
Making such a purchase all the more attractive, you may also be eligible for a tax break from the mortgage on your second home.
And should you choose to move when you retire, your vacation home could become your primary residence in that special location you already know and love.
Simply put, vacation homes are a great idea. But what should you consider before investing in one?
What’s Your Budget?
We aren’t saying it’s all about the money, but, of course, the cost of a second home is one of the most important factors to consider. In addition to a second mortgage, you will also need to factor in the cost of taxes, insurance, utilities, possible HOA fees, and furnishings for the home.
And that’s just the beginning. As you maintain your vacation home, you may want to consider how it will be cared for when you’re away. Will you need landscaping services? Will you want a security system to protect your unattended home? And don’t forget the cost of traveling there and back.
While these costs aren’t supposed to discourage you from investing in a vacation home, they are essential considerations when looking for the home that’s right for you and your budget.
To get a better idea of what your payments will look like, check out our mortgage calculator!
Where Do You Want to Rest and Relax?
Location is another essential part of finding the perfect vacation home. Where do you picture yourself escaping for a week away? Where do you want to spend your weekends? You may love the beach, or the city, or the mountains, but do you like that locale enough to spend the majority of your vacations there? You want to choose a place that won’t lose its appeal after a visit or two.
The second consideration with the location regards distance – in addition to how much it costs to get there, consider travel time. You may choose a vacation home in your DREAM location, but if it takes a half day’s drive to get there, or you need to catch a flight every time you want to visit, then you may not end up spending as much time there as you intended. So, the takeaway here? Decide on a getaway that’s not too far from home!
Is Rental Income a Must?
Many people consider buying a vacation home and then look to rent it out when they aren’t using it. While renting can bring in extra income, it does offer a few challenges. For instance, sometimes renting out your property can have implications for financing and taxes, or homeowner associations may have rules and limitations for renters.
Also, if you plan to occupy the home during the typical vacation months, consider that there may be fewer available renters during the “off-season.” Renting your property also comes with additional considerations, like how to advertise and who will take care of any significant issues that occur while guests are present.
If consistent rental income is a must, then do your research on what to expect given your budget and vacation schedule.
Finding the Vacation Home That’s Right for You
Purchasing a vacation property is an exciting venture, and the professionals at MortgageRight are dedicated to making the home-buying process an easy one – whether it’s for your primary residence or that perfect vacation getaway. Whether you’ve just started looking or you’re ready for a quote, we can help!