Vacation homes are a great option for those who like to vacation in the same area on a regular basis. A vacation home will ensure that you always have a comfortable place to stay and relax in your off time. Whether you want a vacation home at the beach, in the mountains, or in another type of location, a vacation home can be a worthwhile investment. However, there are a few things you should know before taking the plunge on a vacation home. Here are three things to consider.
1. Financing Can Be Difficult
The first thing you should consider when it comes to buying vacation homes is financing. Of course, if you are buying in cash, this won't be an issue. But if you need a mortgage, buying a second home may be a little different. In fact, it may be more difficult to get financing for a vacation home than it would be if you were buying a primary residence. Lenders tend to have stricter rules for secondary homes. In order to qualify for financing you will likely need a credit score in the mid-600s or higher as well as a down payment of at least 10 percent. The higher your credit score and the more you put down, the better interest rates you will qualify for.
2. Rental Income is a Possibility
When it comes to your vacation home, it's likely that it will be empty for at least part of the year. One popular way to offset some of the costs of owning a vacation home is by renting it out when you are not using it. If this is your plan, it's important to keep that in mind when looking at potential properties. You will want to make sure that you purchase a home that has rental potential. You will also want to make sure that you buy in an area where renting out your home is a possibility.
3. Additional Costs Should Be Factored In
When buying a vacation home, it's also important to factor in the additional costs that often come with ownership. If you plan to rent out your vacation home, you may want to hire a property management company to take care of things when you are not there. The cost of a property manager is usually around 10 percent of the rental income. You also have to factor in the cost of additional taxes, insurance, and in some cases HOA fees as well.
When purchasing a vacation home, there are a few things that you should consider. Financing may be harder to get for a secondary residence than it is for a primary residence. While rental income is a possibility much of the time, you need to make sure that you can rent out a property before buying. It's also important to consider the additional costs that come with a vacation property.
Contact a company like New Spirit Vacation Homes for more information and assistance.Share
20 April 2018
I have always been someone who is passionate about making the world around me more beautiful, which is probably why I was drawn to real estate initially. I really wanted to create a place where me and my family could spend a lot of time together in a peaceful, relaxing place, so I started looking for places in my area that were fit for the job. Within a few months, I was able to find an incredible property that was within my price range, so I purchased it as soon as possible. This blog is all about choosing beautiful real estate.