4 May 2022
Are you exploring the idea of purchasing a vacation home this summer? If so, there are many things to consider. How will you use the home? Will it be your primary residence or a supplemental source of income? You must also consider how much it will ultimately cost you before and after purchasing it. Create a wish list of characteristics and desired locations as well. Don’t forget to find professional help to get things rolling once you’ve made up your mind.
It’s important to be mindful of all the pros and cons that may come with owning a second home. Below, is an informational guide on how to help you buy your dream vacation home.
Decide How it Will Be Used
If you’re currently looking for a new primary residence, it’s important to consider how the home will be used. If you intend to use it as a secondary home for vacations, think about how many times it will likely be occupied in a year. Perhaps you realize that it’ll be used less than three times annually, there are financing options to navigate. Renting out the home when you’re not occupying it would be a great extra source of income. Consider becoming an Airbnb host, to benefit from short-term rental profits. This could prove to be a great source of passive income, especially if you choose a popular location to purchase your vacation home.
Explore the Costs
Now that you have an idea of how you’ll use the home, it’s important to explore how much it will ultimately cost you before and after you purchase it. You might be wondering, “How much house can I afford?” Buying a second home can be a huge undertaking. It’s critical to stay realistic when you’re considering all the costs associated with this purchase. Hunting for homes in your budget, and sticking to it, will help the process go much smoother. To find out how much you will be able to afford, find a home affordability calculator and enter in your location, yearly income, monthly debts, and how much you’ll have for closing costs and a down payment. If it is your second home, be prepared for a heftier down payment.
Now that you have an idea of how much you’ll be able to spend, create a personal budget for all the costs that come with a home after purchasing. Gas, electricity, furnishings, renovations, and property maintenance such as landscaping and interior cleaning are all things to include in your new home's budget.
Create a Wish List
It’s time for the fun part – creating a new home wish list. Some things to consider when you're house hunting include location, size, and style. When you’re hunting for a vacation home, location should be at the top of your priority list, especially if you’re planning on renting it out while you’re not there. Choose a location that you enjoy spending time at or a new place you wish to explore. A few ideal location ideas are beachfront, lakefront, in a populated neighborhood, or on land with acres and a view.
Size is also something to consider because the bigger the home, the more expensive it will cost. The number of bedrooms, bathrooms, and floors the home has are all things you’ll need to evaluate and compare to your budget. Don’t forget about the style of the home. Different options to explore are traditional, contemporary, farmhouse, rustic, Cape Cod, colonial, Mediterranean, ranch, or Victorian. One significant thing to remember is the older the home, the more renovations you might need to make.
Hire a Real Estate Agent
No matter where you decide to buy your vacation home, all areas tend to have their own specialized markets. It’s encouraged to find a real estate agent in your desired location to help you buy a vacation home. A local real estate agent is helpful because they will let you know of any location taxes and fees the area might have. Once you’ve found a reliable agent, it’s time to make an offer on your new home. Don’t be discouraged if the seller doesn’t accept your offer the first time around, especially given the dynamics of the current real estate market. Your dream vacation home will fall into your hands at the right time, just keep looking.
The buying process can be overwhelming, but using the tips above, will have you enjoying your vacation home with your family or setting it up for your first rental!