The point of this post is that when you live in an expensive place like New York it is very hard to buy a house and even if you try to buy you are not going to get a good and spacious place for under a million. So it is always better to rent in a city like this but it is better to buy a vacation home somewhere else where you can venture out on weekends or some summer months when the weather in the city is just too extreme. Doesn’t that sound so promising?
Before we get too carried away with this idea, let’s talk some facts. A vacation home is not just for leisure you could potentially turn it into a business if you do some work on it. The “work” I mean potentially get permits, create an LLC, take professional pictures stuff like that. We can definitely talk about that in another post as it is pretty extensive depending on where you choose your vacation home. Back to some facts, contrary to some beliefs vacation homes can be quite expensive. So you definitely need to calculate first how much you can afford to pay for a house before even thinking about where you want to have one.
After getting your pre-approval from the lender you can finally start your search process. One thing you need to consider here is that since this is a vacation home you might need to get a different kind of mortgage. It’s a specific category just for vacation homes. Vacation homes can be quite pricey to upkeep so this is also something you need to consider depending on how many times of the year you will be using it and if you were to rent it short term what licenses or permits you might need to get which again adds up to the overall cost of keeping/running the property. Trust me even if you were to buy a primary home, you are still bound to have a couple of issues especially in the beginning. It is just something you need to accept.
There are lots of benefits of having a vacation home so let’s list them. First, you would always have a place to escape, you could save money on vacations, you might be able to get a tax break for your mortgage interest and property taxes and lastly, this could be your permanent home when you were to retire later in life. It can have a lot of upfront costs, but if you play things right it would be a great investment and even a good business.
What I mean by playing right is don’t buy a place I mean any place not even just a vacation home if you are planning to sell it in less than 5 years. It’s just not worth it and you would end up paying a lot of money to lawyers & realtors. Save yourself a headache. In terms of business, you can definitely rent out your vacation home so it’s not considered an investment property and in this way, you can deduct the property taxes and mortgage interest. To do this, you need to make sure you are at this property for at least 14 days a year or rent it out for 10% of the days so it can be considered a vacation home.
These were some of the things that you should consider before getting a vacation home. There are definitely a lot more things to talk about depending on where you choose your home, but these are just some basics that you need to know. Good luck with your search!