Now that the housing market has picked up a lot of steam across much of the country, quite a few people have been hunting for a second home. This can be an attractive option, and a great investment.
However, it can also become a stressful money pit if you aren’t careful. You should be prepared to look for certain things before you purchase a second or vacation home.
1. Avoid impulse buying
Just because you had a great vacation in a beautiful area doesn’t mean you should come back for the keys to a house. Purchasing a second home should be a carefully planned decision during which you perform research, get your finances in order, and search carefully for a home that meets your precise needs.
2. Research the area
Look for a home in a great region. Since you won’t be living in this place year-round, you’ll want a home in a great neighborhood that has very little crime.
You’ll also want to take a non-tourist perspective when shopping. Will all the amenities you love still be available in the off-season? Talk to locals to glean essential information about the area.
3. See it before you buy it
“Under no circumstances should you buy a vacation home that (a) you’ve never seen in person, or (b) is in a destination you’ve never been to before,” declares a blog post by the expert property managers at Green Residential. “Just because you read an article about why X is the hottest vacation spot of the year, that doesn’t mean it makes financial sense to gobble up real estate.”
It’s always a smart idea to see the place in person before you purchase it. It’s an even better idea to stay a few nights in the area (and in the residence, if possible) before making a purchasing decision. This will minimize the odds of major buyer’s remorse.
4. Investigate resale value
For most people, a vacation home isn’t a lifelong investment. Many will sell one after a few years and get a different home in another prized area.
For that reason, it’s always a good idea to look into resale value. “To get the best resale value someday, you will want to consider a number of factors, such as its location, size and condition, the number of bathrooms and the layout,” says an article from Realtor.com.
Think about what future buyers might be interested in, not just what turns you on when choosing a home.
5. Rent your home when away
Chances are you won’t spend more than a few months in your vacation home, so you might as well make some money off of it. Renting your home when you’re not staying in it is the perfect way to help you keep up with payments and get the most bang for your buck.
Green Residential recommends carefully researching “rental rates, comparable properties, and associated risks” to ensure that you find a property that will rent easily while you’re away.
6. Factor in extra costs
Most houses will come with a few surprise costs, so include a contingency in your budget for those. Besides necessary updates, there will also be taxes, insurance, maintenance, utilities, and weather repairs.
When you calculate how much you can afford for the purchase, don’t forget to include these relevant extra costs.
7. Invest in security
Since you probably won’t know the area as well as a long-time local, and you won’t be staying in your home year-round, security should be one of your prime considerations. Besides installing a solid security system, you might want to consider smart-home automation.
In today’s world of modern technology, it’s not difficult to monitor the security of your vacation home across the country from your smartphone. The peace of mind will be worth the investment.
Finding the perfect vacation home won’t be nearly as easy as going on vacation, but the effort will be more than worth it when you find a property you love at a price you can afford.