Today’s low interest rates have made it the most opportunistic time for homeowners to invest in a second home. And while there are lots of things to consider, including that home equity loan or HELOC you may need to take out on your first home in order to be able to afford it, there are other things that you need to consider as well.
The first is location, and whether or not you actually want to use it for your second home. Too many people go away on vacation somewhere and come back thinking that it’s the perfect spot for their vacation home. Of course! You’ve gone in high season, all the shops and stores have been bustling, and there have been an influx of services, activities,and amenities tailored just to tourists. Not surprisingly, those same things won’t be there in the middle of the off-season and you might find that it’s a much different place to live – and one you’re not too much interested in.
Because of this, you need to make sure that you research the area fully and that you know as much as possible about it before you go. Be sure to visit the area when it’s not peak time so that you can get a good idea of what life is like when the area is not packed with non-locals, and see if you like it.
Next, consider if you want to rent out your vacation property when you’re not using it. Not many people buy a vacation property to live in for most of the year, and so renting it out can be a great option. However, this option will also mean a great deal more research done on your part. Being a landlord is a huge responsibility and if you don’t fully do your research, you could actually be burned for thousands of dollars.
If you’re not interested in renting out your vacation property, you have to consider additional costs that will come with it including winterizing the property if needed, the costs involved with opening it up for the season, and transportation costs – especially if your vacation property is far away from your primary home.
When buying a vacation property you might be most concerned with getting a second mortgage to help you pay for it. But you must also take into consideration these other things so that you can make sure that you get the property you want, and that will perform the way you had hoped it would.