Buying or renting a vacation home has clear advantages over staying in a hotel. You get more space, more privacy, and more amenities. And now the economy is cooperating, too, with home prices at many popular vacation destinations falling during the nation’s real estate slump.
If you’re looking to buy or rent a vacation home, consider these suggestions.
Define your goals. Are you interested only in leisure, or are you looking for an investment property? If your goal is a place to get away from it all, start by looking in regions that offer the amenities you want. But if you’re planning to rent out your property, think of what others might want.
Ensure a safety net. Even if you are buying just for personal vacations, it’s still important to consider the investment aspects, says vacation home expert Christine Karpinski, director of OwnerCommunity.com. “What if something changes with the market or with your personal situation?” Karpinski asks. “You want to have a safety net, and that’s your ability to rent.”
To evaluate an area’s potential, find out who visits and why, Karpinski says. South Florida and Las Vegas, for instance, are primarily couples markets, so it’s fine to buy a one-bedroom condo there, because it should be easy to rent out. On the other hand, North Carolina, New Jersey, and Cape Cod, Mass., are family markets, so you’d be better off buying a two- or three-bedroom condo that bigger groups would want.
Check the amenities. If you’re renting, just make sure the property has the features that are important to you. But if you’re buying, make sure it has what prospective guests in the region are likely to crave. You may not like hot tubs, but anyone trying to rent out a property in Colorado had better have one, Karpinski says.
Consider proximity to attractions. You may prefer to stay in a remote spot, isolated from other people. But rental potential may depend on whether the property is on a shuttle route to a nearby ski resort, for instance.
Look at your overall financial picture. How will you finance a vacation home purchase? And can you really afford it? “Real estate is a long-term investment, and it’s always best to look at it in the context of your larger portfolio,” Karpinski says. If you’re considering a second home, we can help you explore all of the financial considerations before you make any commitment.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.