Thinking of Buying a Vacation Home?

Thinking of becoming one of the 1.13 million homeowners who owns a SECOND home? (source)   Now may be the perfect time to take the leap.  Mortgage rates continue to remain historically low, but there is speculation that they may start climbing as we move farther into 2016.

Buying a second home can be a scary and exciting endeavor.  There’s lots of information to consider.  Here are our top 3 tips to help you on your way.

1.  LOVE the destination.  Many times people end up with a second home in a location which is a frequent vacation destination for them.  If, for example, you rent a condo at your favorite ski resort several times per year then you might consider buying a second home/condo there for
convenience sake. This makes perfect sense!  What you DON’T want to do, is buy a second home some place you have only visited once or twice.  What if the location loses its luster after a few visits?  Make certain you love the location enough to make your investment worth-while.

2.  LOCATION, LOCATION, LOCATION.  Will you be renting it out while you aren’t using it? Make sure your location is desirable to a large demographic.  When people are searching for good vacation rentals they typically want to be close to the action.

3.  Hidden costs.  Consider ALL costs.  Some costs are obvious; mortgage, property taxes, insurance, utilities, etc.  Don’t forget the not-so-obvious costs; things like lawn upkeep and home maintenance/repair.  Will you hire a property management company to take care of your home when you aren’t staying there?

Do your homework prior to jumping in.  Buying a second home is a big commitment and warrants the same amount of research and investigation as a primary home purchase would.  Hire a realtor, shop mortgage rates and talk with your personal finance professional so you are able to make an educated, informed decision.