The Pros And Cons Of Buying A Vacation Home
Buying a vacation home as an investment can be a great way to bring in some income while having a vacation home ready for your enjoyment anytime you want to use it. Vacation homes are not only good for you and your family but a great investment.
If you are considering investing in a vacation home, you will want to do some research before you begin to ensure you make the best choices for you. There are definitely some factors you will want to consider before you decide to invest in a vacation home.
The first thing you need to consider is funding. If you do not have cash to purchase a vacation home and are planning to get a loan, you will want to talk with a few lenders to see if you can get pre-approved for a loan. If you currently have a mortgage you are paying on either for your own home or another investment property, getting pre-approved is crucial as you may not be able to get a loan or you may be limited to the loan size you will be granted.
You will next want to consider what kind of vacation house you will be investing in. There are many different types such as beach condos, mountain cabins, or homes located in vacation hot-spots. You will want to decide which locations you are most interested in and determine the type of investment you want to purchase.
Once you have been pre-approved you will have a better idea on what type of budget you have to spend on your vacation house and this may help you determine the type of properties you can consider. Since homes and condos with ocean views or on the water are usually much higher priced than a cabin in the woods, you will need to know you budget before you decide on a property type.
You will want to look at several different types of properties to see what they are like and which are best for you. Vacation homes come in a variety of styles, locations, and sizes so looking at several is a great way to get a better idea of what is out there. You may also want to consider enlisting the assistance of a local agent in the location you are considering who can help you set up viewings of various potential properties.
If you are considering purchasing a property that is not located in close proximity to where you reside, you will want to ensure that you can have the house serviced or maintained while you are away. You may need to hire a caretaker or a property manager.
Before you make your final decision, you will want to determine the goal of your vacation house. If you want a vacation home for you and not necessarily an income property, you will want to make sure you understand the restrictions for renting out your home. In many states, renting out your home for more than 14 days in a one year period will classify your vacation home as an income property, not a residence, and therefore you will be subject to income taxes, which can have a strong effect on your budget so make sure you are knowledgeable about how owning a vacation home will affect you.