A vacation home lets you escape winter snow or hot, humid summer weather. It could also bring you closer to your favorite recreational destinations, such as beaches, golf courses or ski resorts. Are you considering purchasing a vacation home? This quick guide will help you get started.
Never judge an area based on a single visit. Rent a small house, campsite or hotel room for a half-month at minimum. Make sure you don't mind paying the prices at local stores and eateries. Discover if the area experiences too much crowding during the highest points during tourist season.
Homeowners' association rules apply to many vacation homes. Remember to learn about them before making an offer. Some HOAs forbid renting, recreational vehicles or clotheslines. Only buy a property if you're willing to follow the rules of the HOA.
Think about buying a second home that remains easily accessible throughout the year and has the right equipment for full-time living. These features will prove desirable if you decide to retire in the house or rent it out to other vacationers.
Carefully determine if you can truly afford to buy and own a vacation home in your desired area. Don't mistakenly overestimate rental earnings or underestimate maintenance and insurance costs. On the bright side, you may deduct some expenses on your tax return if you earn rental income.
People normally need sizable down payments to purchase vacation properties. Most lenders will expect you to pay at least one-fifth of the selling price. An alternative is to use a home equity loan on your main residence to finance a second home.