What to Know When Buying a Vacation Home
Any buyer who is trying to decide where to buy a vacation home in California, or elsewhere, is probably very excited about the prospect of having a specific home to go to each time they want to get away for a while. Vacation houses are often on the beachfront or in the woods, or somewhere that is highly significant or sentimental to the buyer. While that all makes sense, there are practical issues that have to be considered when purchasing a vacation home, as well. Without taking a careful look at those issues, buyers could end up with a vacation house they really don't use much, or one that costs them much more than they were expecting to pay. Here are several things to consider before making a vacation home purchase.
Is the Vacation Home Affordable and Cost-Effective?
Vacation homes aren't affordable for everyone, so it is very important that buyers carefully consider their finances before they make their purchase. If it's going to stretch the budget too much, it may be better to avoid that second home. There are more costs to it than just the purchase price, too. There will be taxes and insurance to consider. In many cases the interest rate on a vacation house mortgage will be higher than a primary residence. The insurance may also be higher, and there won't be the types of tax breaks that are offered in some areas of the country to people who live in a home year-round. Those are all worth thinking about when thinking is a vacation home a good investment.
What Will Happen to the Home When You Aren't There?
When the vacation home isn't being used, what will happen to it? Will it sit empty? Will you rent it out? Those are important questions. Having the home sit empty has its own risks, just like renting it out. There are costs and benefits to both options, and if buying a vacation rental property it out is the choice then making sure it's insured against the risk of a renter damaging it matters. Allowing the home to sit empty puts it at risk of squatters, damage that isn't noticed right away (such as a water leak), burglary, and other types of problems, so having a vacation home rented out can seem like a better choice. Each individual buyer will have to weigh the pros and cons so they can decide which option is right for them.
Being Prepared for Emergencies is Important
Emergencies can happen at any time, and when a problem occurs with a home you're living in, it's something that can get taken care of right away. If a fire starts or a pipe bursts, there is someone at home to get help or otherwise address the issue. With a vacation home this isn't the case, though. Unless the home is rented out all the time the buyer is not there, the home will sit empty at least part of the time. Having a problem occur with the home when it's vacant could quickly turn that problem into an emergency, and no one would be around to notice the issue until it had become much worse. Being prepared for that risk and protecting the home as much as possible are both very important for any vacation home buyer.
A Vacation Home Should Be Treated As an Investment
Buying a vacation home because of a sentimental attachment to the home or the location isn't surprising, but keep in mind that vacation homes are also investments. They cost money, and they require upkeep. They may also be resold at some point, so they need to be worth what the buyer is paying for them—although a vacation home in Long Beach would likely have a great resale value. Allowing sentiment to get in the way can reduce the value of the investment, but working with a good real estate agent can help buyers find vacation homes that are right for them and that are still good investments, as well.