If you are someone who enjoys staying at vacation rentals instead of hotels, then you might be wondering whether you should buy a vacation home. It has an investment potential and gives freedom of ownership and the opportunity to stay anytime you feel like it. Although buying a vacation rental may seem like a dream come true, you should not plunge into it without considering all the pros and cons. If you leap without understanding the key details, it could feel like a bad dream. Let’s take a look at the mistakes to avoid if you are planning to buy a vacation property.
Exceeding Your Budget
Irrespective of the type of home purchase, it is easy to be swept up in the dream of a vacation home. The fond memories of a beautiful vacation can convince you to spend a little bit more so that you can buy a home in a particular neighbourhood. There are times when you catch a sunset while touring the property, and it might look like an ideal place to spend your weekends in, however, you must keep the price tag in mind. Besides the mortgage, you need to consider all the ongoing costs because you will have to pay the utilities throughout the year, even if you use the home only occasionally. Take as much time as you need and look for a place in your budget. This is not an urgent decision, and you can take the time to find something you love while also ensuring it has the right price tag.
Depending on the Rental Income for Bills
People looking to buy a vacation home start to think of the property as a revenue-generating asset in no time. Several people plan to rent out the property when they are not using it so that they can generate income from it. However, you must keep in mind that the property might not be rented out for all the days when you are not using it. Additionally, you will need to manage the aspects that need repairs in the home. This is going to cost you, and there could be unhappy renters you may have to deal with. You will also have to pay the local taxes and budget for the wear and tear of the space. Such things come with rental ownership and while it works perfectly well for some, it could be a headache for many others. If you are planning to buy a home you want to use, you must ensure that it is in the best condition at all times.
Buying Without Enough Research
Those who have visited a destination only once or for a very short period in perfect weather conditions are not prepared to handle the geographical and seasonal surprises. If you often vacation in Florida and plan to buy a vacation home there, you must be prepared for the weather conditions. If you are looking for Oceanfront outer bank rentals, you need to understand that the direction of the home will have an impact on how the rain or storm affects it. Hence, before you buy a vacation home, you must do thorough research and understand the location and weather conditions well.
Avoiding Insurance
There is insurance for vacation homes and the policy works slightly different from the standard homeowners policy. A lot of companies think of a vacation home as high risk if it remains vacant for a large part of the year. If you are not visiting the property for long periods, there could be some damage, and nobody would notice it for months. If you own a vacation home in an area that often has hurricanes and floods, you will require supplemental insurance for natural disasters. Lastly, if you want to rent out the home, even part-time, see if the policy will cover the damages related to your property.
Not Considering the Cost of Maintenance and Utilities
Yes, it is true that you only use the vacation home for a few weeks in the year, but you will still have to pay bills. Based on where the property is located, you will need to maintain the minimum level of utilities so that it functions well all year. There will be fixed costs like the internet and sewer but there will also be costs associated with someone looking after the garden or keeping the gutters clean. Do not forget to consider these costs when you budget for a property.
Owning a vacation rental could be one of the most beautiful experiences of your life, but you must not make these mistakes when buying a home. Take as much time as you want for research and look for a property that fits your requirements in terms of location, type and budget.
ABOUTME
We overland. We eat plants and fungi. We live outside as much as possible. We are all connected. A female travel blogger overlanding and writing about ecotourism, ethical and sustainable travel, socially conscious travel and housesitting. An online travel magazine since 2015.
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