As temperatures continue to fall you may want to escape to a warmer climate. If you’re looking to purchase a vacation home Deb Sarsany of The Deb Sarsany Team at The Real Estate Group has some advice.
While owning a vacation home can make logistical and financial sense, it’s not a decision to make lightly. As the owner of a vacation home, in Aruba, and her more than 20 years’ experience as a realtor Deb advises, before purchasing your home away from home, to consider the following:
Will you need or want to earn rental income from your vacation property?
If yes, you will need to be sure you can rent out your vacation home when you’re not there. Not all homes can be used as a rental, especially those that are part of a resort or community. If you plan to rent your property, it’s especially important to research all the rules before you buy. Some communities will put restrictions on rentals such as length of the rental period or they may charge a resort fee per person.
Have you considered all of the costs involved in purchasing a vacation home?
Financing a vacation home in the USA is much easier than purchasing on an island or in a foreign country. Some countries require cash payment or only allow local financing. Interest rates are often much higher as well. Language barriers can also add to the difficulties. Most US banks will not finance property outside of the US.
Will you have the time and funds to make regular visits?
If you don’t rent out your vacation home will you have ample time and funds to visit in order to make the purchase worthwhile? You don’t want the home to sit vacant for long periods of time.
Do you have access to a management company to keep an eye on the home?
If you purchase a property in the Caribbean, for example, you may need someone to come in and put up shutters or batten down the hatches if a storm is approaching. What if repairs need to be made?
What are your expectations when it comes to rental income?
Renting out a vacation home comes with its own expenses; cleaning fees, marketing, and property management.
Did you know that rental income is taxable on state and federal returns, though most vacation homeowners won't earn enough after expenses to face a significant tax liability?
What’s crime like in the area you are looking to buy?
Vacant homes attract thieves so if you do decide to purchase a vacation home take steps to keep it from looking empty. Consider lights on timers. Make sure someone collects the mail and fliers so it’s not obvious no one is home.
Will you go into a rental program, hire a management company or do it yourself via services such as Airbnb and VRBO (vacation rentals by owner)?
You’ll need great photos for marketing purposes. You also need to be able to take payments from tenants and have a way for them to get in. A reliable cleaning service is also essential.
A vacation home can provide the perfect opportunity for friends and family to gather together in the sunshine at Christmas, the New Year, or during a special celebration. But if you do decide to buy a home from home make sure you speak with an experienced realtor first – to weigh up all your options.
For more information about the Deb Sarsany Team at The Real Estate Group visit: facebook.com/debsarsanyteam or call (217) 313-0580.