Its that time of year again! The cold has made its way in and we’re preparing for the wrath of old man winter. For some of you, the thought of buying a vacation home for the winter season has probably crossed your mind once or twice, but there are a lot of things to consider before making the final purchase. Here is a list of Do’s and Dont’s when buying your first vacation home:
DO: Have a Plan
What is your end goal when buying a vacation home? Is it an investment property or a getaway home? Maybe you’re using it for both – living in it part time and renting it out when it’s not occupied. Whatever your intent is, always plan ahead and leave room for hiccups along the way.
DON’T: Act on the Spur of the Moment
Selling a vacation home is a lot harder than buying one, so before you jump into anything, make sure you have a long-term plan in mind.
DO: Research, Visit and Take Your Time When Deciding on a Location
It may seem like common sense, but visiting the place you plan on living in for a good chunk of the year is a good first step. You want to be familiar with the area, know which amenities you’ll have access to and what the weather is like before deciding on a location. Most snowbirds have the urge to move to warmer locales such as Florida, California, Arizona, etc., but for a lot of us, that means it’s a long flight away. Make sure you are 100% positive that you love the town and have considered all of the outside factors before going any further.
DON’T: Take Anyones Word for it
Sure, you may have friends or family who have stayed in a great vacation rental or city, but everyone has different tastes. While it can also be a good idea to read reviews on the place you have your eye on, you must remember that there are people trying to sell that place as well. Experiencing it firsthand for yourself leaves no room for error.
DO: Calculate All Costs Before Jumping into Anything
Calculating all of your costs, taxes and ROIs is the most crucial part of the process. Just like buying a primary residence, you need to consider things like financing, maintenance and insurance. It’s a smart idea to buy under your budget so you’re not breaking your bank and turning your dream vacation home into a financial nightmare. Second homes can can be more complicated and have a higher tax rate than primary residence. You also might want to think about renting it out to guests while you’re not occupying it. Majority of second homes are purchased for investment purposes only, but keep in mind, if you rent it out for more than 14 days per year, you will have to declare your rental income on your taxes.
DON’T: Get Caught up in the Moment
Just because a good deal is on the table at the moment, doesn’t mean it will be good for you long-term. Don’t let the appeal of a tropical getaway home blur your vision of what you truly can afford.
While there is a lot that goes into purchasing a vacation home, in the end it could be the best investment of your life! By doing your research and covering all aspects, you can enjoy your vacation home worry free!