If you're thinking about buying a second vacation home for vacation or rental purposes, then you'll need to do some homework before you get serious about shopping.
Homeownership is a big deal, and buying two homes can either be a path toward long-term income or a mistake that will sink you financially.
Here are the questions you should ask (and answer) before you make any offers.
Why do you want a vacation home?
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I want a rental property for short-term tenants (Airbnb)
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I’ve always dreamed of owning a home in ________.
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I visit all the time and want a place to stay.
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I want to retire here; buying a home seems like a good first step.
What can you afford?
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Second homes usually require at least 20% down
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Mortgage rates are usually higher
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Taxes and insurance
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Utilities
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Maintenance and upkeep
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Cleaners
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Landscaping
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Property managers
Where will you buy?
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I’ve always known my ideal spot
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I’m really not sure
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Spend a week or two in different areas
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Make a list of pros and cons; compare
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Ask locals what it’s like
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Ask other vacation homeowners what it’s like
Is this the right home for you?
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Is the home conveniently located?
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How far to big attractions and public transportation?
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What are crime rates like?
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Does it have a yard? A deck? A garage?
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How does it stack up against other homes in the area?
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Will you have to make changes or upgrades?
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Can you afford to do that?
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Will it be rentable?
Are there natural hazards or events you need to understand?
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Earthquakes
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Mudslides
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Hurricanes
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Tornadoes
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Hail
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Snow
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Floods
How much time will you spend there?
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Consider tax laws
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Factor in to-and-fro travel expenses
What's your exit strategy?
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I want to retire in the home
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I need to figure that out
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After its value has increased by $_______
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After I’ve owned it ___ years
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After I’ve paid off ____% of the mortgage
