Purchasing a vacation home will not only give you a place to rest and enjoy a relaxing weekend getaway. It can also be a potential income generator as you rent it out occasionally.
But before purchasing your vacation home, there are several factors to consider. These kinds of homes are a significant purchase. That is why one must seriously consider all factors in such a process. Below are some variables to consider and establish before buying your vacation house.
If you are currently paying off an existing mortgage during the time you decide to purchase a vacation house, seek for the pre- approval of your lender for another mortgage loan first before you look for your ideal vacation home. Lenders may deny you the loan so it is best to get their go signal first to avoid disappointments. However, it is always wise to completely understand and adapt to your budget at hand before thinking about purchasing a vacation home.
Find out what you want in a vacation house and determine its location, whether it be a cabin, a house or a condo. If, for example, your ideal vacation home is a cabin near a beach, decide if you want it beach front or a few minutes away from it.
Usually, the closer the house is to the beach and the more majestic the ocean view is, the higher is its asking price. Assess your budget, your savings and the pre-approved total mortgage loan to find out the price range you can afford.
View several units in different setting to give you a feel of how your vacation house can possibly look like, the location, the view, the size, etc. Ask the help of a local agent who has enough experience and contacts to set you up for viewing and meetings with different sellers. The cost of hiring an agent will be offset by the great deals you can get through such an expert.
Consider the environment where the house stands. Factor in the cost for maintenance when you are not around if you should need to hire caretakers or if have the time to visit it weekly. These many factors must be carefully considered before purchasing a vacation home.
If you have any plans of having the home up for rent on a regular basis, consider the tax implications. A vacation home rented for more than 14 days is subject to income property tax rather than a residence, bumping you into the next tax bracket.