Five Simple Steps To Make Your Vacation Home Search Successful and Stress-Free
Since acquiring real estate (even two or three houses) has become a national pastime, buying that getaway property might be some folks’ idea of the American dream. That’s all well and good, but potential second-home buyers should use caution Second homes in resort areas and rustic locations aren’t like first homes in that they have inconveniences… and that they lack the access to services that would help one address inconveniences.
What’s more, second-home buyers can be paranoid about how they plan to use the place. Are they shopping for a vacation home solely for their own use, or to generate income? A little of both? Several different approaches should be taken when considering a vacation home as opposed to a real estate investment property.
If it sounds daunting, it doesn’t have to be. Check out these five tips for aspiring second-home buyers.
1. KNOW WHAT YOU WANT AND WHY
It sounds simple, but it can trip you up. There are three main reasons why people buy vacation homes:
- As a place to spend time.
- As an investment property.
- As a place to retire to.
A smart buyer will have a good idea of what he or she wants before they begin their search, says David Hehman, CEO of Escapehomes.com. While people looking for an investment make up the biggest portion of second-home buyers now, everyone should watch the market closely. Demand is high and so are prices, but with Florida home loans getting pricier, that could shift.
Buyers looking to rent out their homes should consider less expensive areas, as rents tend to be higher — as a percentage of purchase price — than in ultra-expensive regions like the Hamptons on Eastern Long Island, N.Y. On the flip side, it shouldn’t be in an undesirable location that makes it hard to find tenants. Vacation home buyers should also consider how often they really are to use the place regularly.
2. WATCH OUT FOR THE EXTRA COSTS
Buying a vacation home will include that might surprise even those who have bought primary residences and are familiar with the process. With rising concerns surrounding natural disasters in some vacation areas, property insurance can be a killer. Spokesmen from the National Association of Realtors state matter-of-factly that flood insurance and fire coverage will be serious issues for buyers.
A good way to stave off this (financial and physical) damage is to not buy in a remote or susceptible area, for one, and regardless of where you buy, to designate 1-2 percent of the purchase price for insurance and maintenance annually.
3. KNOW THE INFRASTRUCTURE
Again, this sounds self-evident, but it goes far beyond knowing your way around the area’s antique shops and ski trails. For example, do you know if the houses in your vacation spot of choice have septic tanks? And do you understand the implications of that possibility? If the water comes from a well, moreover, is it safe for drinking? What about fire hydrants?
All tough questions, to be sure. The best way to stay on the right track is to have contingencies in any contract that allow for a thorough home inspection. Work with a real estate broker with impeccable credentials to show you the ropes, too.
4. LOOK BEFORE YOU BUY
Obvious? Not always. Tim Richards, past president of the New Jersey Association of Realtors, says that visitors to a spot can “become immediately enamored with it” and opt to move before they have any sense of whether someplace would be appealing to live in long-term. Visitors should contemplate the goods and services, health facilities and other factors an area offers. If you “test” the market for several years, in order to get a feel for what you’re after, you’re on the right track.
5. TAKE CARE WITH THOSE WHO TAKE CARE
Two Florida real estate experts recommend securing good people to oversee the property when you’re not there. This is doubly important in a storm-ridden, prominent vacation-home destination like Florida. Broker Lynda Traverso, with the VIP Realty Group on Sanibel Island, Fla., believes it’s essential to meet the people managing your home, as they’ll know the best electricians and plumbers and will run the show in the event of severe weather.
Guy Trusty (yes, that is his real name), president of Lodging & Hospitality Realty in Coral Gables, Fla., says that because second-home buyers are often not present, they should think of it like a business and hire good people to manage it accordingly. Choosing wisely may mean that your weekend getaway will remain in good shape for the times when you want to make your escape. Now apply for a Florida home loan and make it happen!
