Buying a Vacation Home? Here is What You Need to Know

Posted on January 15, 2019 by in Real Estate

Buying a Vacation Home_ Here is What You Need to Know(1)

As we grow our families and get to see more of this world, an idea arises: would buying a vacation home make sense for our family?

In some cases this is a huge waste of money, since you’d be better off renting in the area than owning a home. Not to mention that you might stop liking the location after a while and you’re stuck with a home.

There are also cases when a vacation home is not too expensive and you can use it for decades to go, which make good reasons to try and buy one.

Since we already took the plunge 3 years ago (and still don’t regret it), I’ll share with you some of the things you need to know, before making this move.

You need to really love that location

When you travel, everything is easy: look for a good spot, get a room, enjoy. Next year, look for another spot and repeat the process.

If you are buying a vacation home, you really need to make sure you absolutely love that place. Since it’s not a tent or a RV to move around to new locations, the place you’ll buy a home has to be absolutely perfect for you.

And not just now or 2-3 years from now on: but for decades to come, since your family dynamics will change sooner than you think.

In our case, we bought a derelict country home, but in a superb location near our main city. We see ourselves there in 30 years from now as well, so it made sense to pay money to buy and restore it.

It shouldn’t be too expensive

In our case, the home was about 10,000 dollars. A very small price to pay for a pretty decent land (over 30,000 square feet) and a sturdy home, even if it needs serious renovation.

If we paid over a hundred grand for the house alone, we’d probably have thought it’s cheaper just to rent an apartment there for the few weeks we’re staying in every year.

Which brings us to the next variable in our calculation: the time you actually get to spend there, to make it worth such an expense.

You should spend enough time in that location

If you’re spending few days / year in your vacation home, you probably just wasted money on it. On average we’d stay about 80-90 days/year in our country home, so it made sense to pay for it.

The vacation home should be within reasonable distance as well. In our case it’s less than an hour drive.

Can you rent your vacation home?

When the vacation home is empty, you are losing money, so it makes sense to rent it at least few months every year. This way you can cover most of your costs and still enjoy your home away from home, when needed.

Are the taxes big or small?

Just paying for vacation home is just the tip of the iceberg, there are countless other taxes and fees you need to cover. Some areas have big property taxes, you’ll need to pay for a home insurance plan as well.

Not to mention regular maintenance costs to keep it in good condition and hefty repair prices, when something breaks.

How expensive are the utilities?

We haven’t yet discussed utilities yet. Electricity is one you cannot easily switch on and off, since you’ll probably have appliances that need to be plugged in 24/7 (a video surveillance system, for instance, maybe a fridge etc.)

These are just few of the things you need to consider before going and buying a vacation home. What else would you add?

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