It’s something everyone who has taken a picturesque trip to their favorite ski lodge or beach resort – buying a vacation property. You can just imagine how much simpler your life would be without having to drag along all of your skis, snowboards and other essential gear. You aren’t the only one with that dream in mind. According to the National Association of Realtors, investment-home sales jumped 7 percent to an estimated 1.09 million across the country from 2014 to 2015.
It’s something that is very popular with people, but that doesn’t mean that there aren’t some things that you should know before diving in head first. This article is going to go over some of the most important factors to consider before buying a vacation property.
Make Sure You’ve Spent Enough Time In The Area
[pullquote]Unless you’re a billionaire, you shouldn’t even toss around the idea of buying a vacation home until you’ve visited the area a few times.[/pullquote] It might seem obvious, but you want to make sure you’re absolutely in love with the region and can’t get enough of that resort town or mountain village before committing to buy there. You wouldn’t want to buy a home in a place you’re unsure about, don’t make the same mistake for a vacation property where you’ll likely be spending a lot of time.
Understand All Of The Associated Costs
As with your main address, the total cost of the property doesn’t necessarily end with paying the price point. There are property taxes, repairs or maintenance costs and insurance premiums among a variety of other factors. It’s also important to note that you are paying for the home, even when you aren’t there. You will still be charged for electrical, gas, trash, water, and other services related to maintaining the property. These overhead costs must be factored into your overall budget. You don’t want to watch what was supposed to be the ‘dream vacation home’ turn into a money pit and flip you upside down.
Also, you’ll want to find a local property manager to maintain your home. It is going to cost a bit of additional money but will save you long term if your pipes freeze over or your roof caves in and you aren’t there to notice or fix it.
Be Realistic With Your Rental Income Expectations
While technology has made the lead generation real estate process easier, renting out your vacation home is not without costs. There are cleaning costs that come between tenants, advertising, and if the property is part of a complex or a resort rental program, they will also take a chunk of that income.
How far away is the property from your primary address? Is it possible to get there by car? While it is certainly romantic to have a cozy cabin in the hill country of the Carolinas, if it is going to take a four-hour flight and a two-hour drive to get there, it isn’t exactly convenient. You can be assured that the effort that has to go into simply arriving will directly impact how often you utilize the property.
Investing in a vacation property is, ironically, not nearly as much fun as the vacation itself. Make sure that you’re spending adequate time doing your research and know what you’re getting into before investing!