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.

Photo Credit: Pexels

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