As you work to become more financially secure, leisure time might feel more precious than ever. This is why many professionals choose to purchase their own slice of paradise: a vacation home.
Whether this is a new idea for you or you’ve been dreaming of a sunny property for years, this is certainly not a decision that you should take lightly. There are plenty of factors to consider when taking this step.
“Whether people are looking for a spot to enjoy themselves, rent to others or resell for a big profit, there are many mistakes that could bring them big headaches or cost them a lot of money,” Jeff Brown writes in The Wall Street Journal. “Experts and homeowners warn newbies, for instance, that they may end up putting in a lot more work than they expect and taking on a lot of frustration to keep renters happy.”
To prevent any headaches, it’s important to feel absolutely confident in a variety of factors before you make a purchase. Remember that 78% of home buyers consider their real estate agent to be a reliable information source, so find a realtor you trust and work with them to answer the following questions.
Do you actually like the location?
While this may seem obvious, you might be surprised at how many buyers make impulsive location decisions. You want to make sure that you have spent enough time in this place to want to own property there. This is why many buyers purchase homes in locations where they frequently vacation.
How do you plan to get there?
We all dream of vacation homes in quiet, remote locations, but you want to be able to get there. Since private jets fly in a network of 5000 airports in the United States, commercial flights use 550, you might be limited by your flight choice. And of course, you might also prefer to choose a location that you can drive to.
Have you calculated all the costs?
Simply put, vacation homes require a ton of maintenance work. This is why the 3% of U.S. households who own timeshares get overwhelmed by maintenance fees. But when you own your own vacation home, you need to put in the work. Be sure to include upkeep when calculating the overall cost of the home.
Is this a good time to buy a house?
Work with a local realtor to assess the housing market in the area where you want to buy. You might have to wait for an upswing to make an offer, but it will be well worth it for your finances. The same goes if you ever decide to sell the property.
How much will you be really be renting?
Many people buy vacation homes with the intent to rent. While this can be an excellent opportunity, it’s important to be realistic. Get to know the renting market where you are buying and calculate how much you can charge for rentals, as well as how often you expect to rent. This can give you an idea of how much of an investment you can make on a home.
Seasoned vacation homeowner all have advice on what to know when buying a vacation home, but you need to consider your needs first. By taking your financial situation seriously and being critical of your purchase, you can find the right time to make this financial jump.
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I have many friends with two or more houses, one even owns an entire island! Needless to say they have “slightly” larger net worths than I but I could afford a vacation home if I chose. I just don’t get it though, as a long time home owner why would anyone want a second money trap to take care of that is, naturally, not located nearby? Plus who wants to be locked into the same location or the hassles of being a long distance landlord? We decided a couple of days ago to ski all next week in Colorado. From start to finish we planned the whole trip, found and rented a condo, got all our equipment and tickets in less than two hours using VRBO and websites. Half of the resorts out west have very little snow but because I can pick anywhere I got to choose one with lots of white stuff. To me the idea of a vacation house is the ultimate example of a possession owning you rather than the other way around.
Oh and I forgot to add, absolutely love you on Podcasts, great advice and awesome comic timing!
I totally agree. I prefer the financial, schedule and geographic flexibility that comes with renting or paying resort hotel rates.
And thank you for the nice words regarding the Stacking Benjamins podcast. Please forward them to Joe; maybe he’ll give me a raise. But seriously, I have a lot of fun doing them — Joe is constantly cracking me up!
“why would anyone want a second money trap to take care of that is, naturally, not located nearby…”
Yeah…THAT right there Steve.
Friend of mine bought a ‘beach house’ on SC coast (we both live in TN), and I think he is on his second hurricane related rebuild of it….been a pure money pit. Just like folks that buy a big ole Class A motorhome for use two weeks out of the year, kinda silly.
Personally,
I’ve never seen the attraction in buying a vacation home located far away, or, as Triandy pointed out, a hugely expensive camper. In my opinion, if you need a second home as a place to get away from your primary home, then perhaps its time to reevaluate your living arrangements. Don’t get me wrong, I enjoy the time that I spend away from work, and a healthy work life balance is important. If traveling is something that a person gets great enjoyment out of, they should allocate their resources to that end. I, however, have structured a lifestyle in which I can get a great amount of happiness, for far less money, in my own neighborhood. In my opinion, if you can’t enjoy an entire vacation in your own locality, you live in the wrong place.
I wonder, how long would a vacation home last if you built it out of fruitcake?
🤣 🤣 Probably until the end of time …
I’m surprised the Three Little Pigs didn’t think of that!