Why Buying a Vacation Home is a Great Opportunity

Purchasing a vacation home is a great opportunity to ensure you always have a place to stay for a vacation while also creating a second income if you choose to rent it out. It becomes a home away from home, where you can invite friends and family to enjoy their vacations with you.

So does buying a vacation home make sense? We’re taking a look at everything you need to consider before buying, as well as any disadvantages to purchasing a vacation home.

• Things To Consider Before Purchasing a Vacation Home
• Benefits of Owning a Vacation Home
• Disadvantages of Owning a Vacation Home

Things To Consider Before Purchasing a Vacation Home

Purchasing a vacation home is a big investment in terms of time and money. That’s why before you make the decision, you should consider the below factors: 

Are you just starting on the property ladder, or are you approaching retirement and considering downsizing? Depending on where you are in life, your financial obligations may affect whether or not purchasing a vacation home is possible. If you decide to pursue buying a vacation property, even though you have other financial obligations, you may have to alter your financial goals to accommodate. 

Job security is very important. Without a consistent stream of income, owning a vacation property is very difficult. 

Are you confident  you have the money to buy a vacation home in the first place? Increasing your debt burden is never the best place to start. And what about annual budgeting?

Will you rent your property out? Income from rentals can contribute towards annual property costs. Do you know how much it will cost you each year to run? You need to allow for annual service charges to cover routine repairs and maintenance, utilities costs, and a reserve fund. And if you are renting, you will have rental costs such as marketing, laundry and housekeeping to consider.

How close is the location where you’re hoping to buy a property? How far you have to travel will affect how often you visit. If it’s too far away and you only see yourself visiting once a year for a week or two, it’s probably not worth buying.

Benefits of Owning a Vacation Property

Rental Income

There are a variety of benefits to owning a vacation home, including potential rental income. During the high season, you could bring in premium rents. It’s easily done and as some vacation developments offer rental and management programs, you won’t have to manage the property while away and will benefit from a secondary source of income. 

Convenience

One of the greatest hassles of going on holiday is the stress caused by baggage and extra fees. With a vacation property, you can make it your home away from home and travel far lighter by storing some items at the property. 

Share With Family and Friends

A vacation home offers the chance to share memories with family and friends every year in a space that’s comfortable and convenient for you all. Instead of worrying about renting different properties, you can invite any friends and family you’d like to stay with you in your beautiful vacation home.

Disadvantages of Owning a Vacation Home

If you choose to rent out your vacation home while you’re not there, you’ll be earning regular potential income which is a great advantage. However, there are also downsides to doing this. 

Maintenance

Alongside mortgage payments and homeowners insurance, you’ll also need to ensure your renters have everything they need to stay comfortably in your vacation home. There is also regular maintenance and repairs to consider. You’ll need to take lawn care, air conditioning, peeling paint and gutter cleanings into consideration.

Your vacation property will eventually require essential appliances to be replaced. As these kinds of things tend to break down unexpectedly, you might not have the time to shop around for the best provider. That means you may have to pay more than you anticipate.

Reserve Fund

The materials and labor required to maintain your property will add up quickly. Our advice would be to set aside a percentage of the total purchase price of the property for home maintenance each year. Many experts suggest budgeting 1% of your home’s total purchase price to replace appliances. To be extra safe, saving 3% is advised so you always have a reserve maintenance and repair fund.

Management Service

You’ll also have to consider whether you’ll be monitoring your vacation home yourself or using a management service. Maintaining a property can be a full-time job depending on its location, which is why it’s better to engage a property management service. 

Have you ever considered buying a vacation home in Bermuda? Famed for its sub-tropical weather and beautiful pink sand beaches, Bermuda is the perfect place to call your second home. To learn more about why Bermuda is the ideal destination, take a look at our download below.

Why Bermudiana?

Bermuda’s south shore is home to a hidden piece of paradise called Bermudiana Beach Resort. It’s a stunning oceanfront property featuring 94 fully furnished hotel condominiums, and we believe it’s the ideal place to purchase your second home. 

Naturally, you’ll have lots of questions you want to be answered before you buy. So to learn more, click the button below.