A summer home away from home can be a relaxing way to escape from the daily grind and enjoy quality time with friends and family. A vacation home is a large investment and some individuals may be on the fence about buying a home strictly for summer or winter seasons. However, there can be several pros to making a purchase, and taking several financial and personal factors into consideration may help consumers make the right decision for them.
Would the home get a lot of use?
Individuals who don't plan to rent out their vacation home should consider how often they may actually the property before deciding to buy it, according to AOL Real Estate. For example, Americans with busy work schedules, family obligations and other circumstances may find that they can only get away two weeks out of the year. In these cases, they may decide that owning a second home that is not used as an investment property may not be in their best financial interest.
In other cases, however, buyers who already spend months at a time at their favorite vacation spot may find that owning a property will give them more freedom and flexibility when it comes to planning family trips.
Other factors that come into play are distance and convenience. For example, home seekers should determine if they are willing to drive or fly a long distance for seasonal upkeep and home maintenance. Will they be able to get to their homes quickly or hire out a professional to deal with emergencies? Determining how to manage a property that is a great distance away can ease homeowners' stress.
Is it affordable?
The interest rates and down payment requirements differ based on how consumers plan to use the property, according to Kiplinger.com. Financing rates and requirements for those who will use a second property as a residence will be similar to those of their primary home. However, those who plan to use their home as a vacation property will be required to pay a higher interest rate and make a larger down payment, sometimes ranging between 20 and 25 percent, the news source explains. For these reasons, it's important to consider the financial implications of being a vacation homeowner.