Things to Consider Before Buying a Vacation Home
Closing the deal on a vacation home is not the easiest of tasks. The vacation home market is, at present, booming, with the last few years seeing year-on-year price increases in second homes for sale and a very rapid recovery being observed after the Covid-19 pandemic. This means that buying a vacation home involves quite a bit of competition from other buyers. And the ones that tend to make it are those who are pretty sure of what they want. Owning a luxury vacation villa like Greek Villas can give you a good source of income if you can manage it well.
On the other hand, the surge in an increase in vacation homes also means that you are far from alone in embarking on your search for a getaway. Hot Springs Village, a vacation home resort in Arkansas, have noted the uptick in sales that is making the market so hot right now, and they are reporting that increasingly more customers are coming from further away. If you find yourself in the position of assessing a potential vacation home remotely, it is even more important to make sure that the choice is for you.
But, by “for you”, we don’t just mean aligning with your tastes; a great deal of financial planning, logistical considerations, and housing market data should be involved in the selection and acquisition of the vacation home.
What to Consider First
It has been noted that the home office trend, accelerated by Covid, is in a large part responsible for the surge in interest in second homes. This makes a lot of sense, but it does mean there are many inexperienced buyers on the market purchasing a second home for the first time. Yet there is a definite way to go about buying a second home. Here’s what to account for first:
Weigh the Pros and Cons
In order to do this properly though, you need to go a bit beyond the pro of “it’s a lovely property” and the con of “it’s expensive”. Instead, you should be more in-depth in your analysis. Luckily, you don’t need to come up with all of it yourself. Some very common pros for buying a vacation home include the investment potential in a vacation home market characterized by rising prices, the ability to earn money by renting it out, and the fact you’ll have vacations that are both longer and cheaper.
Some cons to consider could be the need to maintain the home and keep it secure (which is much more difficult when you’re not there) or the possibility that you might not see so much use out of your holiday home. Weighing the pros and cons should be done first – and done properly.
Work Out the Costs
Two big things make vacation homes different here. The first is that you will see no revenue from the sale of any previous property (and, by extension, that you will be paying two mortgages) whereas the second is that you have the possibility to earn money by renting out the property later. This means that your budget calculation should go beyond the price of the property.
Read the Market
Or, better yet, have a professional real estate agent do it for you. Essentially, the question you want to answer is, “is right now the best time to buy a vacation home?”On the national level, we can say that it is, but there is no substitute for detailed local market knowledge – and there are many factors from your own financial situation that will influence your decision too.
These are the things you need to work out before even starting to look. Get these straight, and you’ll make for a much more forthright, and ultimately successful, buyer.
