There are many things to take into consideration before you invest in a vacation home or a second property of any kind. While an additional home is a very exciting prospect, it will become a permanent part of your financial livelihood, and that’s not something that should be taken lightly. Here are six things you should keep in mind when you’re thinking about investing in a second home.
1. Mind your budget. Think about talking to a loan officer and qualifying for a loan before you go out looking. This will help you understand home much home you can afford and will help you avoid the shock of discovering that the home you’ve already found is out of your financial range. Consider the cost of the additional monthly mortgage, real estate taxes, regular maintenance, insurance, and furnishings. Vacation homes range from massive mansions to cozy cottages, so there’s surely something out there that will fit your budget.
2. Determine frequency of use. The amount of time you spend in your home will depend on each individual, the investment, and the rental potential of the home. Distance will play one of the biggest factors in how often you’re able to retreat to your new home. The home’s distance from family and friends will also play a part if you’re imagining this spot as a place for gatherings.
3. Location, Location, Location. Find a location that’s going to work for you not just now but also in the long run. Are you sure you’re a beach person, a mountain person, or a ranch person? Do you think you’ll feel the same way in 20 years? Even though a 4-hour trip may not seem like long now, it could play a part in how you feel about your home down the line. Also consider the home’s proximity to certain attractions and amenities.
4. Understand upkeep. A big lawn needs mowing, lots of square footage means more cleaning, a pool requires maintenance- make sure you have a realistic idea of the upkeep that your property will require. Consider how much time, energy, and money you’re willing to invest in keeping your home in top-top shape.
5. Research rental potential. If you’re buying this home with the hopes that it will bring in some income, you should know that demand will fluctuate with the economy, weather, location, number of bedrooms and bathrooms, and amenities. Think about what types of homes, decor, and locations will appeal to the widest audience rather than just focusing on what your want for yourself. Also consider the costs of having renters- repairing damages, renter’s insurance, cleaning expenses, etc.
6. Think about resale and changing needs. Talk to your Realtor about the past, current, and possible future market for your home and its location. While there’s no way to predict the future, you should know that the market is bound change at some time or another. Also think about the future of your family. Will it grow or shrink? Do you expect your home to host future generations?
Having an in-depth knowledge of your second home’s market and an understanding of what types of homes will meet your expectations will allow you to find a vacation property that fulfills all your dreams!
For North Texans, one of the most popular types of vacation home is a lake house. With so many lakes within a short drive of the Dallas-Fort Worth Metroplex, owning a lake house can provide for year-round vacation opportunities – from holiday gatherings with family and friends to quick weekend escapes. Below are some of our current lake house offerings:
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