Purchasing a vacation home can be both exciting and rewarding. Not only does it give you the stability of a retreat to escape to whenever you wish, but it also can be a lucrative investment. However, to find a property that will function as both a sound investment and ideal getaway for your family, you’ll need to look at all your options carefully. The following are a few tips to help you get started.
1. Decide if this is a good time to buy.
One of the first steps to buying a vacation home is to think about whether this is really the best time to buy. Think carefully about your goals; whether you’re mainly looking for an investment property or something for entertainment purposes. Defining what your primary and secondary goals for a property are can help you narrow down your choices. You’ll also want to think about the current market conditions, your personal financial situation, and the affordability of house prices in your preferred location.
2. Spend a season renting.
If you’ve fallen in love with a particular resort community or remote beach village, it’s worth spending a full season there in a rental property before you take the plunge. Those planning on using the home throughout the year will want to visit during different seasons, to see how the community differs over time. Just as you would test-drive a car before purchasing it, it’s a good idea to give your vacation community a test run first to make sure it’s a good fit. You can use your time in a rental to talk to locals, get a feel for the community, and scope out the area’s amenities.
3. Research locations carefully.
Location is one of the most important factors when it comes to purchasing a holiday home. One of the safest bets is to choose a property located near a major metropolitan area. For example, if you’re thinking about buying a house with Homesales.com.au in Australia, you might want to look at beach properties in close proximity to Melbourne or Sydney. This would give you the benefits of both a beach community and urban centre, increasing your chances of making money on the investment. Isolated locations have their own appeal, but they also limit your potential for resale.
4. Know the tax implications of a second home.
Financial planning is also important when purchasing a secondary home. Naturally, you’ll need to consider whether or not you can afford the monthly mortgage payments. However, other fees like utilities, maintenance, and insurance also come into play. Taxes can be a significant expense for holiday home owners. These will vary depending on whether or not you plan to rent out your property, as rental income will need to be declared. However, you can also potentially deduct operating expenses including repairs or management fees. Researching these tax implications in advance will help you avoid a major accounting headache after buying.
5. Consider alternative options.
If you only plan on using your home for a certain time period every year, you might want to consider a timeshare or other alternative option. Condo hotels or part-time ownership are a way to buy into a vacation home at a lower cost. However, be sure to research these options thoroughly. They can be difficult to sell, and financing may be harder to come by.
Whether you’re looking for a family holiday retreat, an investment property, or a potential retirement home, researching your options carefully will help you find the best fit.