Are you thinking about purchasing a vacation home for you and your family? Not sure it is the right move? Here are 7 aspects for you to consider before making the decision to purchase a vacation home.
One of the biggest points to consider about purchasing a second home is the affordability. Do you have extra money every month to take care of another mortgage, utilities, lawn care, pest control, and repairs?
If you are thinking about renting it out when you are not there, you need to consider that the house won’t be rented out every day which means that your costs will most likely not be fully covered for the month. In addition if you do rent the house out, if you are unable to manage the property on your own there will be fees for a property management service.
- How Often You Will Visit:
Another point to consider is how often you will visit the home and take a vacation. If you plan on visiting a few times a year, it may be worth it. If you will only visit once a year, the cost and upkeep of the home may not be worth it – even if you rent it out when you’re not there. You’d probably get a better deal staying at a resort or getting an Airbnb.
- Re-Sale Potential:
Re-sale value shouldn’t be the first thing you consider, but it is important. Even if you don’t think you’d sell for years on down the road, if the home is in a desirable area, you will have a better chance of selling in the future.
- Rental Potential:
If you don’t plan on using your vacation home a lot, it would be a good idea to rent the home out when you are not there to offset some of the costs. Most likely, renting will not cover all of the costs. However, you have a better chance of renting out the home on a regular basis if it is in a touristy type of area.
- Appeal of the Area:
Good weather and plenty of activities available for entertainment are important things to look for. If the area you are considering has a good appeal, you will have things to do when you visit and it will help to draw in potential renters.
- Home Protection:
When you aren’t living in a home, a lot of things can go wrong, to which you may be unaware. Burglary, burst pipes, fire, flooding, etc. can happen. You can prepare by having a security system, insurance, an emergency plan, and a property manager that can periodically check the home.
- Have an Emergency Plan:
When considering purchasing a vacation home, you need to consider what to do in case of emergency. Whether the emergency is financial – like you lost your job and can’t afford the home, or if there is a burst pipe – who would go take care of it. It is important to plan ahead in case of an emergency.
Having a vacation home in an area that you like to visit can be appealing. But, it is important that you consider everything very carefully before making a purchase.