When you think vacation home, you probably think of a house right on the beach on some beautiful island. You might not think of it, but a place in a big city or on a lake within an hour’s drive from your residence could be a very savvy investment. Here are some tips to help you find your perfect vacation home.
1. Extended Stay First
Before you even think about buying a place, it’s a good idea to stay there for an extended period of time first (7-14 days), explore the area and be sure it’s the right fit for what you are looking for in a vacation home. Craving a remote getaway that will offer some peace and quiet? Or a town with some nightlife so you don’t get bored? You’ll want to stay in the area to be sure it checks all your boxes.
Is it a relatively short drive you could easily make for weekend getaways? Or, would it be a four hour flight every time? Now unless you’re this guy, flight costs can add up.
3. Check the Rental Rules
Some communities’ HOAs don’t allow their homes to be rented out so it’s a good idea to double check the rules to make sure you can rent your property out if you plan on doing so.
4. Location, Location, Location
If you’re interested in renting your vacation home while you are away, you’ll want to be sure the home is located in an attractive area for travelers to stay. Are there multiple unique attractions that will keep travelers coming throughout the year or during certain seasons? And how close is your place to those attractions? To maximize rental income, you want your place to be in a high traffic area of travel and have as many advantages as possible over other places to stay in town.
5. Understand the Tax Laws
Before you buy, it’s a good idea to research the different tax laws that might impact your net rental earnings. Depending on the amount of time you rent out your vacation home, different tax laws might apply.
6. Consider a Property Manager
If you don’t anticipate visiting your vacation home regularly, it’s important to consider having a property management company help with home maintenance, especially if you plan to rent out your home. Chores such as lawn care and appliance repairs and tune ups are much easier to handle from afar when you have a property manager located nearby to assist. This is an important cost to factor into the purchase of your second home, especially if you’re purchasing an older property.
7. Check the Crime Rates
You’re not going to be there most of the year, which makes your house an ideal target for burglaries. It’s a good idea to check the crime rates in the area you plan to purchase and equip your home accordingly. Simple additions such as a home security system and lights on timers are easy ways to deter criminals.
8. Work with a Local Experienced Real Estate Agent
Does weather cause the streets to close routinely during certain parts of the year? Does the Fourth of July parade route go right past the home? These are questions that a local real estate agent with many years of experience in that area would be able to consult with you on.
Ready to pull the trigger on a vacation home? Where do you plan to purchase? Share with us in the comments below.