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Factors to Consider when Buying a Vacation Home

By Sadiya Anjum

Buying a vacation home or a second home is a dream for most people and judging the market condition over the past few years, this dream is being realized by more people every day. With easy financing and zero down mortgages, buying vacation homes has become easy. Vacation homes can prove to be very useful to get away from the city or spend some quality time with your family. But if you consider it as an investment the returns are questionable unless the value of the property increases steadily.

If you are thinking of buying a vacation home, then there are several factors to consider before shopping for one. Whether you choose it as an investment or as your personal retreat, these general guidelines should head you in the right direction.

You need to first analyze your financial condition; ask a financial planner or accountant to advise you in this matter. Think if your down payment amount cannot obtain better returns on other kinds of investments. Apart from your mortgage, you need to have several thousand dollars in savings for repairs and maintenance. Maintaining a vacation home requires money: money for repairs, insurance, taxes, homeowner’s association fees, etc. Even if this is your personal getaway, you may consider renting it out to cover charges for utilities, insurance etc.

With your finances in order, consider the location you are looking to purchase. In real estate, location is of prime importance so keep this in mind when purchasing a vacation property. It is important to consider your own accessibility to the home. If it is too far or too expensive to travel, you will not use it. Climate plays a major role when selecting a vacation home, so make sure you know the various seasons and how it will affect your holidays.

If you cannot afford to buy a house on the beach or in the heart of the town, consider buying a property in the nearby areas. This will not be a problem as long as the area’s amenities are easily accessible.

Unless you want an isolated cabin in the woods, you should consider the various amenities available in the area. Recreational activities like a theme park, ski resort etc. will keep you or your renters occupied. Cultural activities are also a plus point: museums, centers on local culture, film fests etc. Decent restaurants and food joints should be a priority. Look at the recent and future developments lined up for the area; this will give you insight into the value of the property in the future. Most importantly consider the crime rate of the area; vacations are supposed to be fun and no one wants to fret over their safety.

If you are looking to rent the home in your absence, then you will have to do some research. Find out about the location’s peak seasons and the general crowd that you can expect. Talk to other owners who own rentals in that area to get a better idea of the whole picture. When you rent out, you can expect certain risks like damage to property but at least you will have money to pay for your mortgage, utilities, maintenance etc. If you cannot maintain the property yourself, then you may consider hiring a management company to do the job for you.

So before you head out to buy your dream vacation home, you need to do a lot of research on the location and the property itself. Buying a vacation home is a good option since you can expect good returns if you pick the right location. But most of all you can expect some great holidays and weekends ahead of you.

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