Like many people, you may have spent years dreaming of purchasing vacation property on a beautiful beach or in majestic mountains. Now that you have decided to make your dream a reality, don’t rush into the decision without first taking these four very important factors into consideration.
Know What You Can Afford
Before looking at locations and features that you want in a home, sit down and figure out just how much money you can afford to spend on vacation property. In addition to the mortgage or investment loan cost, you also need to what your current income and credit score will allow you to get approved for.
In addition to the monthly mortgage or investor loan cost, additional costs for the property should be considered. For example, property taxes, insurance, utilities, furniture, and other things associated with your vacation property.
If the home is for you and your family to visit throughout the year, also consider the costs of traveling to the vacation home. These costs not only include flights to and from a nearby airport but also what type of activities you plan to do while you’re there. For example, if you plan on skiing at your vacation property, then consider the costs of a seasonal pass or renting skis.
Renting Out the Property
If your vacation property will be for investment purposes only, know what comes with renting it out to others. For example, if you are obtaining a mortgage for the purchase, your lender may require you to obtain an investor loan, rather than a traditional mortgage.
There is also a cost of getting tenants into your property. For example, the cost of listing your property on multiple websites, advertising, preparing the property for new tenants, cleaning up after past tenants. One thing you can do is contact professional property management companies to ensure that you are aware of the cost of cleaning and repairs between tenants.
When finding a property management company, consider looking at local listings so you can learn about typical repairs in that area. Also, ensure you are aware of any restrictions the locality or state where the property is located may place on using the property as a rental property. Finally, be realistic about how much rent you can charge. If you go too high, you’ll just have a property that’s collecting dust.
Pick a Great Location
Even if the vacation property you love looks fantastic and can be bought at a great price, it won’t do you much good if it is in an undesirable location. Besides looking at Facebook groups and Reddit forums about the location, take the time and money to visit the location before agreeing to purchase the home.
When visiting the location, consider the ease of getting through the airport, how long you have to drive from the airport to get there, and how accessible the roads are. Also, consider the time of year that you plan on spending there. If you plan on going there for the winter season, then consider visiting the location in the winter season to see if the roads get cleared regularly or if you’ll need to consider getting chains for your rental car.
Protect Your Investment
Protecting your property should be considered before purchasing a vacation home. Many people choose to install a security system with cameras and motion detection devices. In addition to this, you may want to look into the cost of hiring someone to stay in your home while you aren’t there. This not only makes the home seem occupied throughout the year, and thus less likely to get squatters, it also ensures that if there was a security breach, someone will be on-site to take care of any inquiries with local authorities.
Also, you may want to hire a property management firm to make sure maintenance issues are taken care of immediately. After all, you don’t want guests arriving at your vacation property, only to discover a broken toilet or leaking pipes.
No matter what type of vacation property you choose to invest in, keeping these four factors in mind will help to ensure your investment will be stress-free and profitable.
About the Author
Anica is a professional content and copywriter who graduated from the University of San Francisco. She loves dogs, the ocean, and anything outdoor-related. She was raised in a big family, so she’s used to putting things to a vote. She recommends Skye Management when it comes to vacation property management.