Airbnb is great, and hotel rooms provide some awesome doses of luxury, but after a while, not having your own space in your favorite (and often frequented) vacation spot becomes a bit of a drag. Cue an ingenious idea: Why not purchase your own vacation home and rent it out for extra income while you’re not there? It seems simple, but it truly is anything but. Despite the challenges that face second house purchases, vacation homes now make up about 21 percent of all home sales. If you’ve decided to make an investment on a vacation space, keep the following tips in mind.
3 Tips For Buying A Vacation Home
Take A Hard Look At Your Budget
Costs for a second home go far beyond the initial purchase price. You must also take into account the following: insurance costs, property taxes, homeowner fees, furnishings, utilities, and more. If you do plan on renting out your home, you may be required to pay a fee to the city or homeowner’s association. Many second homeowners make the mistake of assuming their rental fees will cover the cost of their investment, but this often isn’t the case. Unless you have a steady stream of renters built up, and a bevy of cash to sit on while you wait for profits to roll in, you may be sitting in a pile of debt for an extended period of time.
Securing The Best Financing
To make your vacation home dreams a reality, you’ll need to have an airtight plan as to how you’ll fund your purchase. [Continue reading]