To buy or not to buy a vacation home?

On the Money

Last updated on April 29th, 2022 at 08:47 pm

Maybe you’ve thought about owning a vacation home. Before putting in an offer for a cabin on the lake, a condo in the mountains, or an Estepona golf property for sale, consider these realities:

Can you afford it? Owning a second home entails expenses such as:

  • Furniture and other household items
  • Travel costs to and from the property
  • Annual repairs or improvements including hvac maintenance and plumbing. You may set aside a budget to hire professionals from a local hvac company like Nance Services and professional plumbing company like Sharp Plumbing & Heating. And if you need to replace your hvac unit, you may call for ac replacement in Mahomet, IL. If you have questions about hvac services, you may visit sites like https://alohaairmemphis.com/ac-services/tune-ups/ to learn more.
  • Recreational equipment (such as boats)
  • Utilities
  • A security system
  • Possibly a property manager, if your primary residence is further than a few hours from the vacation home, or if you plan to rent it out

Is the location right? You probably have a good idea where you’d like your vacation home to be. But have you given much thought to what this means in terms of year-round use? Homes in areas with harsh winters need snow shoveling and plowing, and perhaps monitoring to avoid frozen pipes.

Distance is critical, as you’ll be making the trip regularly. Finally, have you chosen a spot that will grow in value, or would it be hard to sell?

Would renting be a better option? You don’t have to buy a vacation home to get away on a regular basis. Short-term property rentals can provide the comforts of a home without the obligations of ownership. You aren’t tied to one place, either. You can search online for all types of accommodations, with rental options by the day, week or month.

Alternately, if you do buy a vacation home, you could explore listing your property as a rental. If your home is in a high-demand area, you might be able to generate an income stream. Keep in mind that you’ll still have to manage the property.

How will your taxes be affected? Different tax rules apply to owning a second home, and can be somewhat complex. You should consult with a tax advisor to learn how your taxes will be affected if you purchase another home.

Purchasing a vacation home shouldn’t be an impulsive decision. Consider working with a financial professional to determine how buying a second home will affect your longer-term financial plan.

No posts to display