Retirement

Buying a Vacation Home? 5 Questions to Consider First

Buying a Vacation Home? 5 Questions to Consider First. If you and your family would like to call your favorite travel destination “home,” you may be considering purchasing a vacation property. This can be an exciting milestone, but there are a few things to consider first. Your financial professional might be able to provide you with some resources to help answer some of the critical questions.

Buying a Vacation Home? 5 Questions to Consider First. If you and your family would like to call your favorite travel destination “home,” you may be considering purchasing a vacation property. This can be an exciting milestone, but there are a few things to consider first. Your financial professional might be able to provide you with some resources to help answer some of the critical questions.

1. How Will I Use the Home? Think about how often the home will be used - and by who. Will you be renting it out? Can family come and stay when you’re not there? Or will it only be occupied a few weeks a year? Did You Know 600,000 Americans use online marketplaces to rent out their property to vacationers. Source 1.

1. How Will I Use the Home? Think about how often the home will be used - and by who. Will you be renting it out? Can family come and stay when you’re not there? Or will it only be occupied a few weeks a year? Did You Know 600,000 Americans use online marketplaces to rent out their property to vacationers. Source 1.

2. Am I Rushing This Decision? When are you making the decision to buy a second home? Is it right after a relaxing vacation at a new location? Or have you been considering this for awhile? A second home is a large expense, you’ll want to avoid being impulsive when making your decision. Tip: Travel to your desired location during each season to get a better feel for what it’s like all year round.

2. Am I Rushing This Decision? When are you making the decision to buy a second home? Is it right after a relaxing vacation at a new location? Or have you been considering this for awhile? A second home is a large expense, you’ll want to avoid being impulsive when making your decision. Tip: Travel to your desired location during each season to get a better feel for what it’s like all year round.

3. Have I Calculated the Costs? Aside from the cost of the house, you’ll need to prepare to pay the ongoing costs of owning a second home. These include: Insurance, property taxes, maintenance, property manager (if renting), and HOA or Amenity Fees (if any).

3. Have I Calculated the Costs? Aside from the cost of the house, you’ll need to prepare to pay the ongoing costs of owning a second home. These include: Insurance, property taxes, maintenance, property manager (if renting), and HOA or Amenity Fees (if any).

4. Are There Rules About Renting? If you plan on renting out your vacation home, check local laws and guidelines. Some places cap the number of days a home can be rented out or provide further restrictions on renting to vacationers.

4. Are There Rules About Renting? If you plan on renting out your vacation home, check local laws and guidelines. Some places cap the number of days a home can be rented out or provide further restrictions on renting to vacationers.

5. What Will I Do in an Emergency? In some instances, an emergency might be a broken water heater or an electrical problem. In other instances, it may be more severe. What's your plan? Would your home be within driving distance, or will you hire someone to check on it periodically throughout the year? Did you know on average, the US is hit by 6 hurricanes a year. Source 2. Sources: iPropertyManagement.com, October 19, 2021, Insurance Information Institute, October 19, 2021.

5. What Will I Do in an Emergency? In some instances, an emergency might be a broken water heater or an electrical problem. In other instances, it may be more severe. What's your plan? Would your home be within driving distance, or will you hire someone to check on it periodically throughout the year? Did you know on average, the US is hit by 6 hurricanes a year. Source 2. Sources: Source 1. iPropertyManagement.com, October 19, 2021. Source 2. Insurance Information Institute, October 19, 2021.

Have A Question About This Topic?

Related Content

How Retirement Spending Changes With Time

How Retirement Spending Changes With Time

It can be difficult for clients to imagine how much they’ll spend in retirement. This short, insightful article is useful.

Should You Borrow from Your 401(k)?

Should You Borrow from Your 401(k)?

Does it make sense to borrow from my 401(k) to pay off debt or to make a major purchase?

Do You Owe The AMT?

Do You Owe The AMT?

If you want to avoid potential surprises at tax time, it may make sense to know where you stand when it comes to the AMT.