8 Factors to Consider When Picking Vacation Homes
There are around 5.7 million vacation homes in the US. A percentage of Americans escape to these homes for skiing holidays, fresh lobster on the coast, and days on the lake.
If you’ve been dreaming about exactly that and are considering purchasing a vacation spot of your own, then there are some things to take into consideration. How do you choose the right one?
Check out our guide to 8 factors to think about when picking vacation homes.
- 1 1. The Location
- 2 2. Vacation Home Budget
- 3 3. Who Will Be Using It: Vacation Home Options
- 4 4. Are You Planning to Rent It?
- 5 5. Vacation Home Features
- 6 6. Retirement Possibilities
- 7 7. Required Maintenance and Upgrades
- 8 8. Prepare for Taxes
- 9 Picking Vacation Homes Should Be Fun, but Also Smart
- 10 Author
1. The Location
Possibly the most important thing to consider about a property for vacations is where you want to buy. Perhaps you already have a location in mind that you love and visit often. Or maybe you’re juggling a few ideas.
There’s a couple of important things to consider in terms of location. First of all, the proximity to your home. If you’re looking to buy a vacation home that serves as a weekend getaway spot, then you’ll want something that’s only a few hours away.
Another thing to consider is the type of vacation and activities you’re after. Do you want to be able to go boating on a lake, or skiing in the winter?
Once you’ve decided on a location (or almost have), spend some time there getting to know the area to ensure you’re making the right choice.
2. Vacation Home Budget
Buying summer homes, or any vacation home, is not a cheap expenditure. So you’ll need to outline a budget before you start your search. You don’t want to buy a vacation home only to land up in debt and more stressed than ever.
Crunch the numbers and speak to your accountant about whether buying a vacation home is possible, and what you can afford. Then you can start looking for the ideal home that fits your budget.
You can also consider keeping it affordable with a modular vacation home that has plenty of advantages beyond being inexpensive.
3. Who Will Be Using It: Vacation Home Options
Do you picture yourself living in log cabins on vacation with your partner, or gathering with the entire family in a sprawling vacation home? There are plenty of different types of homes to choose from. To help you make the choice, consider who will be using the home.
Will you need plenty of bedrooms and space for multiple guests or your family? Or are you looking for something smaller and more intimate for just you and one other person?
You want to purchase a home that suits your needs and lifestyle, so this is an important consideration.
4. Are You Planning to Rent It?
Many people choose to rent out their vacation homes part-time to cover the mortgage or expenses. If you’re planning, or hoping, to do this, then there are some important considerations to take into account.
You’ll need to ensure that vacation rentals are permitted in the area that you’re buying your home. Some communities don’t allow short-term rentals, and you don’t want to find this out after purchasing your vacation home.
You’ll also need to plan for rental expenses that include a management company, potential damages and repairs, and more.
5. Vacation Home Features
Your vacation home is an escape to relax, enjoy, and have fun. So, think about the non-negotiable features as well as the nice-to-have features. These might include WiFI access, lakefront or beachfront stands, a home theatre system, or a garden for backyard barbecues.
Besides the fun features, think about the non-negotiables. These may include security features, garages, and more.
6. Retirement Possibilities
What is the future of your vacation home? Many people buy a vacation home with the plan of eventually moving there permanently during retirement. If this is a dream of yours too, then you need to choose a home that’s not only suitable for vacations right now, but will also make a good retirement home.
Can you see yourself living there in the future? And what requirements or desires may you have during your retirement? Perhaps you’ll prefer to be close to activities and hobbies that you enjoy, or within driving distance to your family.
While it’s impossible to know exactly what you’ll want and need in the future, you can try to plan as best as possible.
7. Required Maintenance and Upgrades
Vacation homes can be a lot of work, and maintenance and upgrades are part of the reason why. It’s a second home that will require maintenance just as your current home does now.
This is an especially important consideration if you’re planning on renting the home as everything will have to be perfect. You may want to consider purchasing a newer home that won’t require upgrades or maintenance for years to come.
On the other hand, if you love a bit of DIY work and you’re happy to do some of the upgrades yourself, then a fixer-upper could be a great idea.
8. Prepare for Taxes
Taxes are inevitable when purchasing a vacation home, so it’s important that you take them into consideration and are prepared. Of course, there will be property taxes — but that’s not where it ends if you’re going to rent the property.
Remember to include federal income tax into your considerations and educate yourself on the IRS rules and regulations concerning vacation rental homes.
For example, if you plan on renting the property for more than a fortnight, you officially qualify as a landlord. This comes with a slew of regulations that you’ll need to abide by.
Picking Vacation Homes Should Be Fun, but Also Smart
Picking vacation homes is a fun process of making one of your dreams a reality. But it should be done with consideration. If you’re making a big investment, then you want to make sure you choose the best home for your needs and desires, as well as your budget and future.
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