If you're thinking about buying a vacation home, you undoubtedly want to make the best choice you can with your investment. To help you get there, here are four key things to do before you put down your money.
Test Drive the Area. Buying a vacation home in an area with which you're not intimately familiar can be a recipe for a disastrous purchase. While you may have visited the area to vacation, owning property and returning over and over again can be a very different experience. Be sure to do a thorough test drive of your target location by spending time at a longer-term rental property for a full season or during the off season. You'll get to know more detailed aspects of life there, such as amenities, local services, local ordinances, the amount of tourist traffic, and the neighborhood feel when the tourists are gone. You may find that things look quite different at different times.
Consider Renting. When you buy a vacation rental property, you generally have the option to rent it out when you're not using it. This can be a tricky decision to make, though, because it can change how you view the home. Your vacation turns into a bit of a business that may require attention throughout the year. But, if you want a home that can pay for itself, renting out to short-term lodgers or as a summer rental property is the way to go. If you think you may want to rent the unit out, it's wise to consider how it will be viewed by potential guests and what amenities are there to appeal to them.
Expand Your Options. When you go house shopping with your real estate agent, try to be flexible and open to properties that may be a bit different than you initially planned on. For example, if you want a beach property, you could save considerable money by expanding your search from the popular destinations in Florida (like Miami or the Keys) to less well-known ones, such as the Tampa area. Similarly, if you want a ski-friendly town, consider less expensive and less competitive property markets in places like Idaho or southern Colorado instead of the obvious locales in Colorado or Utah.
Consider Your Budget. Even if you're planning to rent the unit out, you should plan to cover all the necessary expenses of the vacation home in your normal, monthly budget. This includes more than just the mortgage, though. Be sure to research the costs to account for insurance (including any flood insurance necessary), property taxes, repairs and maintenance, landscaping, and association dues.
By thinking about these items as you meet with a real estate agent and while house shopping, you can help ensure that your vacation home is the best decision for your family. Talk to a representative from Pace Real Estate Services to get started.
