Buying a home is a major financial transaction, but it’s also very personal. And while a vacation home is certainly an investment, the prospect of finding your dream getaway can be pretty exciting too. Excitement is perfectly normal, but what you don’t want to do is let it drive your decision-making. This guide will help you through the process of buying the right vacation home – one that combines your vision with the practical matters that make it a profitable investment.
Choosing a Location
Most buyers already have an idea of where they want to own a vacation home, but it’s still important to learn all you can about the area’s rental market and other factors that will impact your bottom line.
Can you afford it?
The first question to answer is whether your desired location fits your budget. Doing some research online is the easiest way to get a better idea of how affordable the housing market is in any given area. For example, a simple Redfin search shows that the average home price in Spring, TX was around $251,000 in the past month.
What makes the area a draw for renters?
If you’re looking in a location you already love, this may seem like an obvious question. However, think about more than just what you look for in a vacation spot. According to MashVisor, it’s essential that you make sure the area has a high demand for vacation rentals so you don’t end up with a property that you can’t keep occupied. You also want to think about whether the location will remain popular long-term. Spend a little time researching not just what makes the area a draw for tourists, but also the area’s potential for growth and where tourism is trending.
What are the local regulations?
This is another essential question to ask before making an offer on a home. As the blog Living on the Cheap explains, some condo or resort communities have regulations regarding use of rental properties. Make sure to look into these possibilities before buying a home on the assumption that you can use it as a rental.
Choosing a Home
What’s the right size?
While your budget will determine how much home you can afford, you should still put some thought into the number of bedrooms and square footage you want. If your budget gives you room for different options, one thing to think about is the type of people who typically travel there. Are you catering to families, couples, business travelers, or other groups? If you’re mostly catering to couples or business travelers, you can get by with less space. However, a larger home would be better suited for accommodating families.
How much maintenance will it need?
Any home requires maintenance, so be sure to factor these costs into your overall budget. Along with regular maintenance, there are also major repairs that can pop up out of the blue. You can’t always anticipate these, but the home’s condition when you buy it will make a difference. A newer home in good condition is always the safest bet for keeping maintenance costs down.
Does it have the right amenities?
Along with the number of people that a home can accommodate, the amenities your home offers is another make or break factor for potential renters. Of course, you can add small details to any home, like stocking the kitchen with cooking tools and providing high quality linens. But what about the bigger things, like an open floor plan, a pool or hot tub, and outdoor living space? Spend some time researching what vacationers are looking for when they travel to your destination, and put those amenities on your list when choosing a home.
This may seem like a lot to think about, but all of these questions will affect your rental prospects, and ultimately, the home’s profitability. Buying a vacation home is certainly exciting. You may know right away when you’ve found “the one.” Just make sure it checks off these major requirements so you can be confident that you’re making the best investment.