5 Questions That Can Help You Buy the Right Vacation Rental
5 Questions That Can Help You Buy the Right
Vacation Rental
Finding a
vacation rental that fits your wants and needs perfectly can take some work.
Most people think of more obvious questions, like whether to buy a beach
cottage or a mountain home, but forget to consider other crucial questions to
inform their process. That’s why we’ve put together a list of obscure but
important questions every buyer should ask themselves when looking for the
perfect vacation rental.
How Will You Finance Your Vacation Rental?
This should
be the very first question you ask when looking for a vacation property.
Finding the right rental in a perfect location and at the right price is a good place to
start, but you also need to research available funding options for your second
home. Conventional mortgages are often preferred by homebuyers because you
can choose between adjustable- and fixed-rate loans, and you may also be able to
avoid paying for additional mortgage insurance. Just keep in mind that you will
need a 20 percent down payment to forgo mortgage insurance.
Will You Use Your Vacation Home or Just Rent
It Out?
Just because
you’re planning to rent out your vacation rental doesn’t mean you can’t stay in
it yourself. The beauty of investing in a rental is that you, the owner, get to
enjoy it from time to time. However, if you intend to just rent it out, you
need to really think about what you should and shouldn’t do as its landlord. While renting can help cover
your mortgage and provide lucrative tax breaks, you will also be dealing with
the stress of being a landlord. If you want to reduce that stress, you should
also think about hiring a property manager to help out with your vacation rental.
Should You Buy a Brand New Home or a
Fixer-Upper?
If you want
to get creative with financing, you could use renovation loans to purchase a fixer-upper as an investment or
vacation property. An FHA 203(k) loan can be used for any of these two types of
home purchases and can allow eligible vacation home buyers to purchase their
second homes with less of a down payment. This is a huge incentive for buying a
fixer-upper, in addition to having more available properties to choose from and
potentially lower prices, but buying a fixer-upper, even as your second home, can be stressful.
So for many buyers, a finished vacation property may be the better choice,
especially if you do not want to budget for repairs.
How Will You Manage Maintenance for Your
Property?
If you
already own a home, you already know that home maintenance costs can really add up. Average home maintenance
expenses can run more than $16,000 a year, so you really need to include maintenance
costs in your overall home budget. In addition to figuring out how you will pay
for vacation home maintenance, you also need to determine how you will resolve
issues from afar. If you plan on renting your property, a property manager could be beneficial in managing unexpected repairs and keeping
your home in good condition for potential renters.
Will You Need to Invest in a Home Security
System?
If you plan
on living in your vacation home occasionally, installing a security system is a wise move to protect your investment.
Even from afar, you will have some peace of mind knowing that your vacation
home, as well as the contents, is better protected against potential break-ins
and burglaries. In addition to deterring crime, a comprehensive security system
can also provide added protection and alerts for other emergencies, including fires
and gas issues. Most security systems also allow homeowners to access features,
and even video, remotely, which can be a serious benefit for vacation property
owners who live far away.
With the
right research, the right financing, and the right moves, buying a vacation
rental doesn’t have to be stressful. Thinking about the small details involved
with owning a rental can help you make a more informed decision and make the
process of buying the perfect property much more enjoyable.