What You Need to Know About Owning a Vacation Home

Thinking of owning a vacation home? Yep, me too! I love the idea of having a getaway home that is ready for me when I am ready to step away from the daily grind, but there are some things that you should consider before taking the leap to own a second home.

Let's start with the pros of owning a vacation home:

Always have a place to stay

No reservations are needed! You own the home and you always have a place to stay. This allows for flexibility to plan trips as far out or as last minute as you'd like. All you have to do is get there and then the relaxation starts.

Minimal Packing

When you travel it is likely that you need to bring clothing, sunscreen, toiletries, and everything else that you might like to bring for the comfort of home. However, when you own your own vacation home, your house will be stocked with these items so you will have fewer items to bring.

Potential Rental Income

If you are thinking of using your vacation home as a short-term rental for others to enjoy, then you have the potential of earning additional income. This can be super beneficial when looking at the cost of owning a second home but does come with its own set of challenges, which we will look at below.

Here are the items to consider before making the purchase:

Location

Location is everything. You will want to make sure your vacation home is in a secure environment. You will not be here all the time so you will want to make sure you are comfortable purchasing a home in an area that is safe. Also, you will want to consider that if your plans are to use your vacation home as a short-term rental then you are purchasing in an area that allows for short-term rentals and what rules and regulations they have in place for short-term rentals.

Amenities

You may want to consider purchasing a second home that is close to various amenities such as shopping, restaurants, and the scenic view. This will ensure that you are near all the activities, sites, restaurants, and shopping that you love and if you are looking at renting out the property it will give your renters the ability to access the great amenities. The amenities do not stop at just what is close by when thinking of this purchase as a potential rental income. You will want the amenities of a home such as great appliances, bedding, furniture, internet access, and either streaming services or cable.

Easily Accessible

If you are thinking of turning your vacation home into a short-term rental, make sure it is easily accessible for guests. There is nothing more inconvenient than going on vacation and it is hard to get to the vacation home. You want your guests to feel as if they are arriving away at their home away from home and make it as easily accessible as possible.

If this has you thinking more and more about purchasing a second home, here are a few more things to consider:

Maintenance Fund

You will not be at your second home all the time to keep up with the maintenance of a home, which you do at your full-time home. It is best to consider that you should save at least 1% of the home for annual maintenance.

Insurance

Insurance on a home in certain locations may be much more expensive than where you currently live. For instance, if you purchase a property on the beach you will likely have to have flood insurance, hurricane insurance, and other insurances that you may not be familiar with. It is important that you do your research so you know the financial obligations that come with a second home.

Obtaining a Mortgage

Obtaining a mortgage may not be as easy on a second home as it is for your full-time residence. FHA and VA loans are not allowed for second homes because you must certify that you plan on living at the home as your primary residence. You may have to go with a conventional mortgage so you will need more money upfront as your down payment.

Marketing

If you do plan on making your second home a rental home for others to enjoy make sure you take into account marketing for your rental. You may also want to include property management in this cost if you do not plan on managing the property yourself.

If you do decide on purchasing a vacation home in the Charleston Trident Area, please give me a call and I can help you navigate all the information that was outlined above.