If you're thinking about buying a second vacation home for vacation or rental purposes, then you'll need to do some homework before you get serious about shopping. Homeownership is a big deal, and buying two homes can either be a path toward long-term income or a mistake that will sink you financially.
Here are the questions you should ask (and answer) before you make any offers.
Why do you want a vacation home?
- I want a rental property for short-term tenants (Airbnb)
- I’ve always dreamed of owning a home in ________.
- I visit all the time and want a place to stay.
- I want to retire here; buying a home seems like a good first step.
What can you afford?
- Second homes usually require at least 20% down
- Mortgage rates are usually higher
- Taxes and insurance
- Utilities
- Maintenance and upkeep
- Cleaners
- Landscaping
- Property managers
Where will you buy?
- I’ve always known my ideal spot
- I’m really not sure
- Spend a week or two in different areas
- Make a list of pros and cons; compare
- Ask locals what it’s like
- Ask other vacation homeowners what it’s like
Is this the right home for you?
- Is the home conveniently located?
- How far to big attractions and public transportation?
- What are crime rates like?
- Does it have a yard? A deck? A garage?
- How does it stack up against other homes in the area?
- Will you have to make changes or upgrades?
- Can you afford to do that?
- Will it be rentable?
Are there natural hazards or events you need to understand?
- Earthquakes
- Mudslides
- Hurricanes
- Tornadoes
- Hail
- Snow
- Floods
How much time will you spend there?
- Consider tax laws
- Factor in to-and-fro travel expenses
What's your exit strategy?
- I want to retire in the home
- I need to figure that out
- After its value has increased by $_______
- After I’ve owned it ___ years
- After I’ve paid off ____% of the mortgage
Considering a second home? Talk to one of our expert agents to help navigate the process.
Pros And Cons Of Buying A House With A Friend
