8 Factors to Investigate Before Purchasing a Vacation Property

Know All Your Costs

Before you sign a contract, do your homework and know exactly what the true carrying costs of your vacation home are going to be every month. The carrying costs should include: mortgage, home owners insurance, property taxes, HOA fees, property management fees, pool service (if you have a pool), lawn service, monthly utility bills, etc.

I recommend after you have calculated all your expenses, you should make sure you have no problem paying these expenses even if your vacation home brings in zero monthly income. I have talked to too many investors over the years who bought a vacation home they could not afford and whose home became an anchor on the family’s finances.

Find a Good Property Manager

A good property manager is key if you are going to be owning a vacation home. After all, the manager is the one who is going to be looking after your investment when you are not in town. A vacation home can deteriorate very quickly if the house does not have proper care.

I recommend driving around the neighborhood where the house you are looking to purchase is located and find homes that have good curb appeal. Then find the property managers who manage those homes. Chances are if a property manager is taking great care of the outside of a vacation home, then the inside is usually very nice as well.

Travel to the Vacation Home Location Before Purchasing

You will want to travel to the vacation home location quite often and make sure this area is where you and your family will want to travel and spend most of your vacations. You should also make sure that the area is easy to get to. I’m sure it is nice to have a vacation home in the mountains, but if it takes you a plane ride and a 3 hour car ride to get to, chances are you probably will not be visiting your vacation home too often.

Learn About Peak Time

If you are going to looking to get rental income from your vacation property, you should be aware that the most popular travel times will bring you the most rental income. So if you need income from your vacation home to make the deal work for you and your family, then you will probably need to use the house during the off season when the demand is not as great.

Know That Owning a Vacation Home is Not Always a Vacation

If you are pretty handy or if you want to save money, just be aware that when you visit your vacation home there will probably be a couple of days that are dedicated to doing general maintenance and repairs to your property.

The National Realtor Association has stated that the annual upkeep on a house should be around 2% of the value of the house. So if a house is around […]

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