Tips on Buying a Vacation Home
Author: Reid Colson
You'd like to buy a vacation home, but you're not sure where to
begin. Perhaps the single most important point to determine up
front is why you are buying a vacation home. Are you trying to
generate income by renting the property? Would you like to have
a place to take your family every year that will likely
appreciate in value? Would you prefer some flexibility in
location and like to vacation at a different spot each year?
Once you determine your needs in a vacation home, it is wise to
understand some of the options available to you in buying a
second home. Probably the most straight-forward is to consider
purchasing a home outright. If you can't afford the full price
of homes in the area you desire, there are still a couple of
options available for you. One is to consider purchasing a home
with friends or family, while another is to look into
timesharing. All these options have nuances to consider in
relation to your needs and means.
By purchasing the home yourself, you have the most control over
the property and can capture all of the gains and benefits
associated with owning real property. You may also be able to
offset some of your expenses by renting out the home in peak
seasons. Be sure to investigate federal income tax laws so you
can make the most of any potential tax breaks. Also ask about
zoning, covenants, land use in areas surrounding your property,
and property management fees. In some areas these restrictions
may prevent you to use your property as you wish. Additionally,
be prepared to pay as much as 25% of your rental income in
property management fees for weekly rentals.
If you decide to purchase a home with friends or family, make
sure to put the agreement and all terms in writing. You may want
to do most of this in advance as many homes go quickly and it
will help target your search to the right kinds of homes. You
may also want to consider homes with features that allow all the
owners to be at the home at once (multiple masters, separate
living spaces, etc). Again, the questions and concerns above
should be considered.
If all this is too complicated, inflexible or expensive and
you've come to the conclusion that timesharing is right for you,
be aware that a timeshare purchase is not an investment. Most
units depreciate over time and the resale market is tricky to
navigate. If you are buying with a resort developer, make sure
they are financially stable. Also be sure to find out what they
offer for buying through them as opposed to the resale market.
At times, the resale market will offer the same unit and season
at a fraction of the price the developer is offering. You'd also
be wise to arrange for your financing in advance, as developer
financing is usually offered at above market rates.
Lastly, don't buy on a whim. You didn't buy your primary
residence that way, and you shouldn't buy a second home without
due diligence. Research the location. Make sure the area has the
amenities and recreation you desire, allows you to use the
property as you wish, and is within your budget.
About the author:
Reid Colson is a Principal in Bridlewood, a custom home builder
serving the Central Virginia market. Bridlewood builds custom
homes and vacation getaways for discriminating buyers. They are
committed to providing the highest levels of professional
service and consistent communication throughout the design and
http://www.bridlewoodproperties.com for more information.