What to consider when buying a vacation home.
With the unpredictable Minnesota weather, it’s easy to fantasize about that vacation home of our dreams. Maybe for you it’s on the beach somewhere…or in the mountains. Or up north tucked away in the woods. Regardless of where you dream about that vacation home being, you will need to consider a lot of things before pulling the trigger. Here are some tips for buying a vacation home.
Tips for Buying a Vacation Home
Location – The majority of second home-buyers choose a vacation home within driving distance of their primary residence and near a metropolitan area (for conveniences). But many too, opt for a place in a warmer climate or in the mountains. Consider the risks regardless of where you choose to look. Beachfront homes obviously have the risk of hurricane or storm damage. Any river or lakeshore property has flooding potential. And picturesque mountain or cliff-side residences have snow removal issues and a mud-season. Just do your research and know the risks before buying.
Rent Before You Buy – You may think you know exactly where you want to be – maybe it’s a special place that you’ve vacationed to every year and you are SURE that is the place for you. But have you spent time there in the off-season? And as a resident vs a vacationer? You need to do that first – many owners of vacation homes rented for an entire season or year prior to purchasing. This allowed them to really determine where they wanted to be and where they didn’t want to be – based on traffic patterns, shopping options, restaurants, etc. You might be surprised what you learn while renting.
Investment Commitment – Generally you should be able to commit to 5-years for a purchase such as a vacation home. Although there is always the possibility of the unexpected, it’s important to walk into the purchase with a solid time commitment to the property.
Dollars and Sense – Remember that it’s not just the purchase price! A second set of taxes, insurance, utilities, and all the maintenance costs (landscaping, repairs, etc.). You need to furnish this new place, too, with not just furniture, but another set of dishes and towels and linens. Don’t forget that there are transportation costs as well, to get you to and from your dream get-away.
Rentable – Many vacation owners don’t plan to use their property as a rental, but sometimes it’s a necessity to help make the finances work. Are you okay with the possibility of renting your prized vacation home to strangers? It can be work to be a long-distance landlord, but it can also be quite lucrative as well, and really help financially.
If you do your homework, save your pennies and practice some patience while you shop for the vacation home of your dreams, you will find the perfect spot that will create memories for you and your family for years to come.
The Minnesota Association of REALTORS® is the largest trade association in the state with more than 17,000 members. MNAR is the voice for real estate in Minnesota.