Five Important Questions to Ask Before Buying a Vacation Home
Call it a home, not a vacation.
There are two reasons to own a second home for vacation rentals:
1.) As a luxurious alternative to hotels in places other than your hometown
2.) As a rental space for travelers
Having a second home to be used solely for holiday purposes is the epitome of luxurious living. Real estate prices have been increasing over the years, and, as a result, adding a second home to your primary one would be quite exorbitant. It is because of this that vacation homeowners often rent out their second property whenever they are not using it. With this in mind, it is important to consider not only your personal tastes, but those of your potential clientele as well. Remember, what may be best for you and your family may not make the most successful rental. Here are some questions to ask to make sure you are buying a suitable vacation home and potential vacation rental property.
1.) Where is a good place to buy?
Suppose you have always wanted a place in a tropical location, so you choose a vacation home in a remote area of the Philippines, or an Ayala Land House in Bataan. It may seem like a feasible decision at first, but suppose the novelty of the area wears off? What if work begins to occupy too much time, and your availability to visit your vacation home decreases? The most practical solution is to rent it out, but this would prove to be a challenge if vacationers do not frequent the area a lot. When it comes to choosing a vacation home, select a place that is a popular hub for tourists, and one that you can afford. In this way, you can be assured that there will be a steady stream of potential renters for your vacation home.
2.) Can you afford to buy a vacation home?
Considering your current financial situation should be the initial step you take before even surveying the market for a potential vacation home. Failing to budget properly could result in you accumulating debt over the years – which could turn your dream vacation getaway into a horrendous financial nightmare. Look beyond the attractive fetching price of a vacation home and do the calculations for the actual cost of ownership. Remember, you are not only paying for the house upfront, but for additional fees including insurance, upkeep, and maintenance. Although utility bills are relatively cheaper for vacation homes (considering you are not there for most of the time), financing a second home is still an economic burden. Make sure to purchase a place that is well within your financial means.
3.) Is this a smart investment?
Do you really need a second home? Do you think you would be able to rent it out quickly and easily? Is your current home in dire need of repairs? Before jumping the wagon and acquiring a vacation home, it is imperative that you consider its potential return on investment. After all, you would not want to buy a home that you only use from time to time, leaving it to collect dust and tighten your wallet the rest of the year. Look for a home that has value as a part-time rental property and be sure that it is something that would entice vacationers.
4.) Who will manage the property?
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Since you will be spending more time in your primary home than your vacation home, one crucial question to keep in mind is, “Who will be managing my property while I am not there?” You might think that nothing much would happen to a house if you visit from time to time. But you will be surprised how much can change in the time between visits: plants become overgrown, some appliances break down from lack of use, and there is always a possibility for rodent or insect infestation. With this in mind, consider hiring a property manager or caretaker who would serve the dual function of taking care of the home as well as renting it out.
5.) Will the property have valuable amenities?
Having all the necessary amenities in a home would give your property more allure and appeal to potential renters. Amenities such as a fully equipped kitchen and a shower with hot and cold water are just some of the basic necessities. If you truly want to lure in the renters, add extras such as an access path to the beach, or a small pool. Remember that first and foremost, it is a vacation home. So, whenever you are there, you should feel like you are indeed unwinding.
If you are interested in owning a vacation home or investing in vacation rentals please see our worldwide real estate listings. And if you own a vacation home or apartment please list your vacation rental on our real estate site.
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