Before Buying a Vacation Home - 2/13/2020
There's a fine difference between a second home and a vacation home. If you are going to primarily use the home for yourself, then, it is probably a second home. If you're going to use it some during the year and rent it out the rest of the time, it is probably a vacation home.
There is another possibility. If you use it for 14 days a year or less, the property could be a rental property which means you may have some benefits that are not available to vacation properties. These may seem insignificant, but the tax laws require that they are handled differently.
Try to be realistic about what your expectations are for the property. Are you looking for an investment that will earn rental income and go up in value? Are you trying to find a way to lower the costs of vacations by owning the property? How do you feel about strangers using your property when you're not there?
Vacation rentals are short-term which may realize higher rents, but they could also have higher than normal vacancy rates. Maintenance and management are usually more than on long term rentals.
If your objective is to have an investment, you could analyze the property as a vacation property and a long-term rental to see which might provide you the best results.
It would be a good idea to do some research on the area you're considering investing to find out about appreciation trends and the local economy. A local REALTOR® can provide you with valuable information before you invest as well as revenue and expense estimates.
There are a lot of things to consider besides it being a nice place to recreate. If you'd like a recommendation for a real estate professional in the area you're interested in, let me know and I'll put you in touch. Send me an email at Alex@ExitGolden.com or call me at (201) 997-4200.