If you’re thinking about making an offer on a second home in this frothy market – perhaps a property that’ll become your eventual retirement place – here are four things to keep in mind.
1. Never forget that the key to vacation homes is location, location, location. Sure, this is a cliché, but that doesn’t make it wrong. Before making an offer on a home, get to really know the area by visiting several times to explore the neighborhoods and check out the amenities; in-season AND off-season. Focus your search on destinations that are no more than two hours from your primary residence.
2. Assess the property’s true rental potential. Beaches, mountains and lakefront homes tend to be the most desirable locations to pick up rental income when you’re not staying in your vacation home, according to the National Association of Realtors. Be sure short-term rentals are allowed — before making an offer. Be certain, too, that the home you’re considering has the amenities renters expect.
3. Add up all the costs for buying and maintaining the vacation home. Mortgage rates are sometimes a bit higher for second homes than primary residences. That’s especially true if you’ll be counting on rental income to qualify for the mortgage. Renting a home to offset your costs will also mean paying additional fees, like the cost of professional property management. Managers can charge 15 percent of the rental rate to market the property, process tenant applications, manage payments and maintain the place.
4. Before making a bid, sleep on it. Purchasing a vacation home is often the first step toward fulfilling a retirement dream. Too often, though, this emotional desire causes buyers to rush into making offers. Do your due diligence! You’ll want to be confident that the home will not only suit your needs today, but in the future. It’s a good idea to consider the age-friendliness of the property, since you may be living in the place years from now when it might not be quite as easy to, say, handle flights of stairs.
Taken in part from: Jodi Helmer, Next Avenue, Huffington Post. Original full article here.Posted By Scott Freerksen “The Lake Guy”