Purchasing your own piece of paradise is undoubtedly an exciting opportunity, but there are several critical factors to take into consideration prior to taking the plunge. Here’s a checklist of key questions to ask yourself that can help ensure your success.
Questions to ask before purchasing a vacation home
What kind of travel are you committing to?
It’s time for you to embark on vacation, so you drive a couple of hours to the airport for a three-hour flight, pick-up a rental car, and then drive two more hours to your dream cabin in the woods. Really?
Now take into consideration hopping in the car and driving only 3 or 4 hours to your dream cabin in the woods. The enticement of owning a vacation home is basically that you would actually go on vacation – easily and quite often.
The location, ease of access and how often you’re planning on using it are paramount components in this endeavor. If it’s too far away, then you might not use it as much as you originally thought you would.
Take a moment to plan out your traveling logistics of the special getaway spot. Traveling far away may be welcome from time to time, but think about why you are buying this vacation home, and would you like to be relatively close to it?
How are you going to take advantage of the vacation home?
Is it going to be a yearly summer spot for extended family or perhaps a romantic weekend getaway? Will you need three bedrooms or perhaps is 500 square feet enough space?
Research the four seasons. Will it be too hot to go golfing in July? Do you wish to participate in the local, yearly half marathon? Developing a clear idea of what you would like, who’s going to use the home along with the purpose of it will be extremely helpful in the overall process.
Hire a local real estate agent to find out all the ins and outs of a particular area.
Sure, you know how great it is in the summer, but did you know that every winter they shut down the roads on account of flooding? What about the naked bicycle club organization that meets up once a month next door?
Or think about the new sewer plant that’s being built down the road? Real estate agents are invaluable, and your local expert will share insights and interesting facts about the neighborhoods.
To rent or perhaps not to rent?
Many owners are open to renting their vacation home whenever possible. If this is appealing to you, do your homework.
First, talk with a property management company. Find out the rental amounts, and the rules and regulations for the area. Do they have a peak season? Will you need to give up some of your vacation time to enable you to make some money when rents are hot?
Some associations and resort communities don’t allow rentals – so do thorough research. If you’re not planning to rent it, who is going to keep an eye on it?
Property management companies are excellent sources of information and provide different services including lawn care, monthly check-ups, etc. You’ll need to make sure someone is looking in on the house because sometimes roofs leak, water tanks crack, etc.
How are you going to finance it?
Make sure you completely understand the financial implications of purchasing a second home. Seek advice from your certified public accountant and your financial planner.
There are different tax rules that apply depending on the breakdown between personal and rental use. Remember that there’ll be maintenance costs for upkeep and repairs on the home. Create a budget, and be prepared for the costs.
Taking time to research the necessary elements is smart and will go a long way in protecting your investment. It’s your investment in creating experiences and unforgettable memories for you and your loved ones for years to come. Now, isn’t it time for a vacation?
Nick & Cindy Davis can assist you with your purchase of your vacation home here in the Tampa Bay and surrounding areas. We also have a property management department within our team and can assist you with renting your home out if that is something you would like to do. We are always available to answer your questions by calling us at 813-300-7116 or simply click here and we will be in touch.
