Buy a home near this Maui beach this year and vacation for less money.
If you have always wanted to own a home in a luxury area to vacation with family or friends? Now may be the time to buy a second home in areas such as The Hamptons, New York or Maui, Hawaii. Perhaps you want to get active in Aspen, Colorado or enjoy the southern culture of Asheville, North Carolina, but calculation of your budget suggested otherwise. With home prices dropping throughout the country and interest rates still low, this is a great time to buy a home to enjoy your vacations.
Tips To Buying A Vacation Home
Buying a second home can be more difficult than buying a first home. Use these tips when making a second-home purchase:
- Figure your budget in detail. The second-home purchase should not tax your budget or your vacation spot will never be a place to relax.
- Expect a downpayment cost of at least 20% and sometimes as much as 25%.
- Consider location, location, location…it’s still important to get the most financial gain from your purchase.
- Rent out your vacation home when you are not planning to be there to generate extra income. Don’t, however, base your affordability projections on this income just in case it has a high vacancy. Plus, the prime rental times are during major holiday when you will probably want to be relaxing at your vacation home, too. Factor in use of a property manager, as this service can be as much as 60% of the rental price, if you choose to use one.
- Ask your tax advisor about writing off mortgage interest rates and other expenses.
- Don’t rush into a decision. With the slower market, you have the time to think through all facets of your vacation-home purchase.
Barron’s just announced the top 10 vacation-home destinations based on several criteria, including outdoor sports/activities, views, and fine dining. It is reported that home purchase prices have dropped from 11% in Palm Beach, Florida to 45% in Park City, Utah where actor/Sundance Film Festival originator Robert Redford could be your neighbor. Look into buying in these areas to make vacationing more affordable and fun.
Photo Credit: PatricSmithPhotography at www.flickr.com.
