If you’re thinking of buying a vacation home, researching what you need to consider when buying is the best first step to avoid any stress further along the process. From how much to budget to where you buy, there’s a lot you need to know before you even begin looking at properties to ensure you make the smartest investment.
Here’s everything you need to think about before you make the leap to becoming a vacation homeowner.
- Travel to the Property
- Type of Property
- Plan When You’ll Visit Your Vacation Home
- Do Research into Renting Out Your Vacation Home
- Prepare for Taxes
Budgeting is one of the most important things to consider when buying a vacation home. Knowing your budget will help you avoid falling in love with properties you perhaps can't afford. Or it may even allow you to search for more premium options because you know you can afford it.
It’s vital to take time to review your finances and decide what your budget is for your second home. It’s not only the price of the home that you have to consider, but you’ll also have to be aware of the following costs:
- Associated taxes
If you feel that purchasing a vacation home by yourself is too much of a risk or you'd like extra financial support, you could also consider buying the property with another party, such as close friends or family. You must consider all of this before you begin to look for a property.
What exactly are you looking for from your vacation home? Would you like to be by the beach, in the mountains or near a busy downtown area with restaurants and vibrant nightlife? Are water sports a priority or spa days? Would you like to be near a good hospital?
It’s also a good idea to look at crime rates in the area you’re looking to buy so you can have peace of mind that your property will be safe throughout the year.
Remember, this is a long-term investment and will be a getaway you look forward to visiting. Use your budget and select the ideal, affordable locations before whittling down the property options.
Travel to the Property
Next, consider how easy or difficult it will be to travel to your potential vacation property from your main home.
Are you looking for somewhere that’s close enough to drive? Or are you happy flying there? Will you need to hire a car when you arrive or is there good public transportation?
You must consider all of these things before you buy so you aren’t left frustrated or disappointed. The last thing you want is to invest in your vacation home, only to realize the travel doesn't make it an enjoyable getaway.
Find out the travel specifics so you can continue removing or adding possible vacation homes to your shortlist.
Type of Property
Once you have your budget, location and have confirmed the travel won't be an issue, the next consideration is the type of property you want to buy.
Would you be more comfortable in a luxury condo? Or is a single family home more your style? Pick an option that suits you without compromising so you have a vacation home you're genuinely excited to visit.
By choosing what type of property you’re searching for, you’ll narrow your search to types of properties that suit your taste and requirements the best. You shouldn't have to compromise, so outline all of your unique requirements before cross-referencing with your options.
Plan When You’ll Visit Your Vacation Home
One of the great benefits of owning a vacation home is you can get up and go whenever you feel like it. All you need to do is book flights and pack and you can be on your way. Although this is true, it’s still beneficial to take a look at when you’ll want to visit so you can see what’s on offer that season.
By understanding what’s happening in the location and when, you can better prepare for the best time to visit, ensuring you won’t be disappointed on arrival.
Although vacation homes encourage regular use, that’s why we buy them after all, the average amount of time we spend in them each year is typically just over six weeks. If you only plan to use your vacation home for a few weeks each year, you should consider choosing a resort with a powerful rental service that will rent out your vacation home when it isn't in use.
Doing so means you'll not only have a vacation home, but you'll also earn extra income without lifting a finger. That’s income that will contribute towards property costs or provide you with spending money when you are on your vacation.
Do Research Into Renting Out Your Vacation Home
If you’re planning on renting out your vacation home, don’t automatically assume that you’ll be able to do it. It’s important you discuss this with your mortgage specialist first if you’re financing the property and not paying cash for it. This is because a lender may require you to obtain an investment loan rather than a conventional mortgage.
You’ll also need to check with the rules and regulations of the resort you are buying in and also the laws of the State or country for any restrictions on rentals.
Conduct thorough research before signing a contract so you avoid potential issues down the line.
Prepare for Taxes
It’s very likely you’ll need to pay property taxes on your vacation home, so being prepared is essential.
You can do this by speaking to your mortgage specialist or real estate agent, who should tell you what to expect in terms of property tax. For example, some states charge buyers a conveyance tax when a property is sold to an out-of-state resident.
Being prepared for taxes is good practice to avoid any surprises later on. By reading through the small print and being fully prepared, all you need to focus on is selecting the right location to buy your vacation home.
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.
Bermuda’s south shore is home to a hidden gem called Bermudiana Beach Resort. This stunning oceanfront property is set to open April 1st 2022. With 90 fully furnished condo residences available, it’s the ideal place to purchase your second home.