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BUYING A VACATION HOME: WHAT YOU NEED TO KNOW

A vacation home can be an excellent investment, provided you examine the investment from all angles. Find out the fundamentals you need to plan for when considering a vacation home.

With favorable interest rates still at hand, you may be considering the possibility of a vacation home. A vacation home can be an excellent investment, providing you with a tangible asset you can also enjoy when you want to take a little time off.

Here are some tips to keep in mind before you start your search for the ideal vacation home:

1. How far do you want to travel? A remote cabin in an unspoiled wilderness might be a lifelong fantasy, but how much fun will it be if it takes half your vacation time to get there? Ask yourself how often you might use this vacation home and how much time you’re willing to spend to get there.

2. Have you spent time there before? Don’t buy before you try. Certain locales may sound romantic or exotic, but if your only experience with the place is on the Travel Channel, do yourself a favor and spend some time there first. Choose a living arrangement for your visit which will be most like the sort of home you’re looking to buy (i.e a condo, in a neighborhood, etc.).

3. Understand “the high season.” Almost every vacation destination will have a time of year where crowds flock. Ask yourself if you want to be there during this season or if you’re more interested in the lucrative potential of renting out your property.

4. Build in a renter’s mindset. A significant way to offset expenses and build equity is planning to rent your vacation home out when you’re not around. Talking to local property managers can help you understand the seasons, occupancy rates, and the market for rentals. It will help inform your financial picture.

5. Understand total expenses, not just the mortgage. There will be costs, and you need to see the big picture before you commit. This includes utilities, maintenance, property taxes, and insurance for starters. You want to invest in what you can actually afford.

Proper planning can make owning a vacation home a profitable joy. Your local REALTOR® will be happy to help you plan for your first vacation home. Let your agent represent your interests as you search for that perfect "getaway investment".

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