It’s everyone’s dream to own a vacation home that is away from a crowded city in a quiet place. However, finding a vacation home is not an easy task. It is recommended to take help from professionals like N Property Group to make the task easy. If you are planning to buy a vacation home, then here is a guide that will surely help in analyzing your options and making a well-informed decision.
Match housing choices and your lifestyle
Most people believe that they must own a residence before investing in a vacation home, but that’s not completely true. For people, it is important to match their housing choices to your lifestyle. Owning a big space in a city to live in, is not what everyone can afford.
However, renting a modest condo in the city and owning a big vacation home outside the metro area. Or, you can have a large country house to enjoy the city life as much as you can and buy your vacation condo in the city, the choice is yours.
Decide property’s purpose
Before you plan on owning a property, it is important to decide for what purpose you are going to use your property from a financing and tax standpoint.
- If you are planning to use your property as a primary residence, then you can buy it for as low as 3 % (for a loan under $417,000) and get vital homeowner tax benefits.
- If planning to use the property as a second home, then buy as low as 20-25% to qualify for maximum loan benefits. However, the mortgage rates and tax benefits are the same in the case of the primary residence.
- If planning to use the property as an investment and use it when not rented, then the rates are a bit higher than that second home option. In this option tax benefits are less, but the extra income can make this property more affordable.
Calculate the total owning cost of the property
Buying a rental property is a huge investment and it is best to calculate the total property-owning cost and make a well-informed decision. After determining what you can afford, it’s time to take a look at your financial condition and how much amount loan you are eligible for. While calculating the overall ownership cost of the property you should also add the personal budget items to have a complete overview of the expenditure. Add these basic items such as:
- Gas, electric, cable TV, and internet.
- furniture and housewares
- travel cost
- property maintenance, cleaning, landscaping, and pool/spa upkeep.
Analysis monthly and transactional cost
There are additional monthly expenditures and transactional costs that a property owner should know about. It doesn’t matter that you are planning to buy a primary residence, second home, and investment property all these factors are counted in:
- Mortgage payment
- Insurance
- Property tax
- Down payment
- Lender fees
and other expenses too. Make sure you have a clear idea about all the involved expenses before moving on to the next step.
Hire a local real estate agent or lender
Hiring a local real estate agent or a lender will surely save you from any trouble as they know the neighborhood well. A local real estate agent will give you a clear idea about the transaction fee, taxes, and commission involved in the process and other important property rental rules. These local real estate agents can guide you well as they know the well and negotiate on all aspects of the deal for you. Similarly, the local lenders are satisfied with lending and appraisals in less populated areas as it is hard to find comparable sales.
If you follow the above-mentioned steps one by one, then you will surely end up buying a vacation home without spending your relaxing evening before you know it.
