Are pine trees and the mountain vistas whispering in your ear? Or are ocean sounds making you relaxed Whatever type of vacation location is running through your head before you plunk down your hard-earned cash or sign on the dotted line for that dream of a life, there are some things.
Have a budget and know what you are able to afford.
This is the most important element in preparing to purchase a vacation home. Take time to review your finances and determine what your budget is to your property. The Price of owning a vacation home isn't only what you pay for it, but additionally:
HOA and condominium fees,
Other items you may need such as furnishings or gear like snow and water skis, kayaks, jet skis, boats or other toys.
There's absolutely no point in running around touring properties if you'll be financing it with price tags that are beyond your reach just to discover that you don't qualify for the purchase.
Are other family members planning to go in on the purchase with you?
Have a chat with a Blue Water Mortgage agent who can help you find great loan programs, rates, if you need help setting a budget and see what works best for you.
What exactly do you expect or want from a holiday home? Do you need quiet and peace where neighbors are few and your privacy is a high priority? Are you looking to be near the hustle and bustle of a busy downtown, nightlife and restaurants? Is proximity to urgent care office or a hospital important?
Is a key factor to consider in this decision-making process as after you have it you can't choose up the property and move it! Unless, of course, it is a mobile home or house boat.
Choose a place that you'll visit and that you love.
Perhaps you are looking for a change of scenery and already own a house near the sea. If that's the situation, big city condo or a mountain log cabin may be the best way to change things up.
How easy or difficult is to get to your holiday home? Is train or boat access necessary? Are you willing to suffer through sitting in a traffic jam and will it be more than worth it to get there? These are questions to ask today before deciding on the location.
Then narrow your search, if you are more comfortable in a quaint cottage than you're in a high-rise condo.
If you can't possibly survive without valet should the power go out, be sure you have the creature comforts important to you.
Plan to relax.
It may sound silly, but sometimes, when you're able to take advantage of your holiday planning the calendar year home will help you enjoy it and relax more. Plus, it gives you something to anticipate.
How can you use this home? Can you expect to use it multiple times annually or maybe every weekend? Will this ultimately become your retirement home? During the time that you're not using it, do you intend to rent the property out? More on this in another section.
According to a survey performed in 2015 from the National Association of Realtors®:
37% of holiday home buyers plan to use their property for vacations or as a family retreat
16% plan to convert their vacation home into their residence in the future
13% purchased because of real estate costs and the buyer found a deal that was Great
42 percent of investment property buyers bought the home through renting the property to generate income
16% bought because of the buyer and real estate costs found a good deal
14% for price appreciation
Do not assume you are able to rent out your vacation home.
If you wish to rent the house out while you're away and are thinking about buying your vacation home for investment purposes, this may have implications for funding. You will want to discuss this with your mortgage specialist if the property is not being financed by you rather than paying cash for it.
A creditor may require that you obtain an investor kind of loan rather than a mortgage. The lender may consider this to be a rental community, while you may not anticipate renting out your unit.
Additionally, it's important to consult the neighborhood, town, and state for any restrictions on using the house. A real estate professional can help you with getting all the information you need to make an informed decision.
Be realistic about leasing income.
Be aware of what the market commands in the region decide to rent it out. There are many things that influence prices and you don't want to come up short if you're counting on that income to offset the cost of the property.
There are costs associated with renting out your house to consider such as property and advertising management. You may not be there to fix the refrigerator or air conditioner if it goes on the fritz at the center of your renter's long-awaited vacation but it will need to be taken care of quickly.
Protect your investment.
There will be times when you won't have the ability to break away for your holiday home. Life happens, but it's never good to leave your house away from home unattended for extended periods of time. You might wish to take into account surveillance or home security systems or a property manager that can give peace of mind to you when you are gone.
A pipe or a leaking toilet can do considerable damage in a brief amount of time. Who will plow or shovel the driveway, if it's in snow country? Additionally, it helps to make friends with neighbors that are trustworthy so that they can keep an eye on things.
Taxes are a certainty.
So why not be ready you will certainly pay taxes? Review with your mortgage specialist or real estate agent what to expect with respect to property tax, but consider consulting an accountant for any additional tax problems if you reside in a different state, such as purchasing it, regarding your vacation home. Some states charge buyers and/or sellers a conveyance tax when a property is sold by or to an out-of-state resident.
Be prepared for company!
The old adage about owning a vacation home comes true. You may find yourself entertaining more relatives and friends than you knew you had after you close on your vacation home.
Be ready to embrace an open door policy or set guest visits with limitations and have a polite way of saying no at the ready. Also give consideration to appliances like a refrigerator, barbecue grill or washer/dryer's size and stocking the pantry.
Get the ball rolling.
Inventory of vacation homes is low and this has helped push the median vacation and investor home purchase price higher.
According to NAR, the typical price was $192,000 for holiday buyers, up from $150,000. Investors typically purchased a median-priced property of $143,500, up from $124,500. While others financed their purchases, 39% of investors and vacation buyers paid cash.
If your goal is to own a holiday property, then now may be one of the best times to jump in the holiday home market because mortgage rates are quite low and costs of homes might continue to rise.