Archive for the ‘buying a second home’ Category

Summer Finance Tips: Vacation Home Trends

Wednesday, August 11th, 2010

summer vacation, buying a second home, vacation homes, purchasing a vacation homeGiven the current stressful economic situation, most of us have been looking for a little TLC in the form of a summer vacation. Choosing to stay in a rental home rather than a hotel just might offer that extra dose of relaxation, or you might even decide to invest in a getaway of your own. Here are some finance tips on how to make the most of your vacation, whether it’s this summer or beyond, plus the latest buzz on purchasing a vacation home.

The unfortunate thing about a vacation is that the trip inevitably must come to an end, and that means we can be left with a bulky hotel bill that tends to linger around much longer than a tan. One way to reduce those costs and travel like a local is to do what recently suggested and rent a home in your destination city of choice. This could end up being much cheaper than booking a hotel room, plus you can buy food and cook at “home” rather than eat out, which will end up saving you more money and is healthier than rich resort food.

Want to take it a step further? In today’s real estate market, vacation homes are becoming more popular. The New York Times on information from the National Association of Realtors, which indicated that sales of second homes are up by 7.9%, compared to 7.1% for primary residences.

To make sure you are getting the maximum benefit from your vacation house purchase:

  • Be prepared to deal with pesky things like broken pipes and other upkeep costs that come up with home ownership. Many second-home owners opt to find a handyman who lives locally and can be trusted to fix the small stuff. For larger repairs, be prepared to travel and oversee the work yourself.
  • Figure out whether the time you plan to spend there makes up for the ownership expenses. This is a simple act of budgeting and being honest about how you’d like to use your time (and money). You might also want to look into tax for second homes.

If you plan to use it as a rental for the times you aren’t there, consider these tips before purchasing the home:

  • Location – Is the property in an area that offers lots of activities for vacationing families, and/or relaxation for couples and retirees? You’re most likely to have more luck renting out a home that is within walking or a short drive’s distance to: parks, beaches, lakes, shopping centers, a grocery store, etc.
  • Affordability – Choosing a property in a luxurious area might be great for your own travel, but will inevitably make it out-of-bounds for many potential renters. If you’re expecting to rent out the home for a good portion of the year, it might be best to pick a more economical spot to ensure that you have a wider pool of renters to choose from.
  • Weather – Is the home in an area that offers lots to do year-round, or are local activities strictly seasonal? If yours falls into the latter category, ask yourself whether or not you’ll be satisfied with limiting your use of the property to off-season times since you’ll likely need to rent it out when there is the most demand.

Because of historic and lower housing prices, buying a second home might be cheaper than you think. With home prices so low these days, in some places condominiums are selling for less than the price of a car! In this time of sunny, fun-filled days and long, delightful nights, you’ve got options when it comes to planning your vacation. Summer’s not over quite yet!

Photo credit: , Creative Commons 2.0

This post was written by LindseyJ

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