4 tips for buying a vacation home
With summer just around the corner, many families are considering buying a vacation home. A vacation home can be a great way to get away from the city and enjoy cottage country – when it’s done right. Buying a vacation home doesn’t come cheap, though. You’ll want to consider how buying one will affect your overall finances. Here are four tips to consider when buying a vacation home.
Decide on a location carefully
They say the three most important rules in real estate are location, location, location. It’s important to choose your location carefully when buying a vacation home. You’ll want a property that’s far enough away from the city that gives you that “cottage country” feel. That being said, you don’t want to buy a property that’s too far away. For instance, while it may be nice to own a vacation home in Florida, you probably won’t be able to visit very often if you have a full-time job and live in Montreal. Thus, it probably makes sense to buy somewhere closer to home that all family members can easily visit without hopping on a plane.
Rent before buying
Once you’ve decided buying a vacation home is right for you, try renting before buying. You’ll want to make sure you’ll actually enjoy the area. You don’t want to buy and sell vacation properties too often. Not only are there tax implications, it’s also a hassle. Vacation homes tend to sell slower than your principle residence, so it could take months to sell if you end up getting bored with your vacation home after a short while (not to mention you’ll have to pay the real estate closing costs from buying and selling). You’ll (hopefully) be spending a lot of time at your vacation home. Try renting for a couple weeks and see if you’re fond of the area.
Consider amenities and activities
People often refer to their vacation home as their “home away from home.” Similar to buying your principal residence, you’ll want to buy a vacation home that offers plenty of amenities. Think about the activities that you enjoy. For example, do you enjoy fishing? Then you’ll want to buy a lakefront property. If you can’t afford lakefront property, at least choose a vacation home that’s within a short commuting distance of the lake or river. Think about the other activities you enjoy while you’re away on vacation. Does the vacation home offer those? If so, it could be a good fit.
Don’t stretchyourself financially
Before buying a vacation home, it’s important to look at the big picture and consider how it will affect your overall finances. Can you afford the monthly carrying costs that come with owning a vacation property? Sure, you can earn extra income from short-term rental services like Airbnb, but are you ready for the extra responsibilities that come with those? A vacation home is more than just a one-time purchase. Figure out how much the ongoing costs, such as utilities, home insurance, property taxes, repairs and maintenance, will be on a monthly basis and see if you can really afford it.