People buy vacation homes for different reasons. One reason is so they can have a place to stay when they want to escape the busy city life. Another reason is to earn additional income by renting out the place whenever it's not in use.
Regardless of your reason for buying however, whether you see a vacation home as a potential source of income or are simply interested for the sake of owning one, there are things you need to know before you purchase one. The choice of where and what type of vacation house to purchase will always be up to you but there might be some aspects of owning a vacation house that you might not have thought about.
For example, if you are currently paying off an existing mortgage, you might not get approval from the lending institution for another loan. So to avoid potentially embarrassing situations, talk to the lending institution and seek approval first before you go house hunting.
There are many types of homes. Depending on the location, you can opt to purchase a cabin by the mountains or a cottage by the beach. Your vacation house might even be a condominium unit in another city. To save you time, narrow down your choices by determining what kind of vacation property you want to get.
If you choose to own a house near the beach, then consider its distance. The nearer the house is to the actual beach, the more expensive it is. Assess your budget if you can afford this type of property. If not, you may want to settle for a house that has a view of the beach, though not necessarily walking distance from it.
While house hunting seems fun and adventurous, there might be cities or places that you may not be familiar with. In this case, it's best to seek the help of a local real estate agent to help you get the best deal. A real estate agent can advise you about the neighborhood and the cost of property therein.
Consider the location of your vacation house and factor in the cost of maintenance. If you plan to rent out the property, you may need to hire a property manager to take care of your property and its rent. On the other hand, you may also need to hire a caretaker to come in and clean the property and have it ready for occupancy even before you arrive.
If you plan to rent out the property for weeks or months at a time, there are tax implications that you need to consider. A vacation home that is rented out for more than 14 days at a time is subject to income tax.