Tips for Investing in a Vacation Home After Retirement.
Photo by Wkedersha
Buying a second home is the dream of many Americans. After so many long years of work, you want to have something to show for it all, as well as a place where you can get away once in awhile. It’s no small feat, however; investing in property is a big leap, and it takes quite a bit of time, money, and patience if you want to do it right. With some careful decision-making, you can find the vacation home of your dreams and make the process as smooth as possible.
Thinking about the details will help immensely, since there are so many of them when it comes to buying property. Factor in all the costs rather than only looking at the big picture. How much will you need to furnish your second home? To secure it when you’re not there? If you live quite a distance away, who will take care of the maintenance and upkeep? These are the things you need to ask yourself before making any big decisions related to the property.
Follow these tips to get the process started.
Consider hiring a property manager
A property manager wears many hats, but for the most part, they make sure your vacation home is taken care of when you’re not there. Keeping the house clean and taking care of upkeep is an important step in protecting it from potential thieves and ensuring that the property value doesn’t decrease. Not only that, a property manager can assist with renting out the house so you can earn the majority of your rental’s income when you’re not using it yourself. The ideal property manager will give you 24/7 access to information on your property either via phone or through smart technology, be upfront about all fees and costs, and will be able to carefully vet tenants so you know there are reliable people using your rental. While this does cost you, the peace of mind is worth the investment.
Do some research on insurance
Buying insurance for your vacation rental can be confusing and costly, especially if you’re going to rent it out for a portion of the year. You’ll want to make sure you have the property covered inside and out, and the policy should also cover loss of income in case of a catastrophic event. Keep in mind that the cost of insurance will be lower for you if you use the property more than you rent it out. Look online to compare prices before making a decision.
Factor in all the costs
Investing in a second home obviously requires funding, but it’s important to make sure you’re aware of all the costs involved. You should be prepared to pay for utilities (and the deposits to have them activated), furnishings and decor, and security features such as an alarm system or, at the very least, motion-sensor lighting to help deter would-be criminals from entering the property when it’s not in use. Insurance, property taxes, and the cost of maintenance throughout the year should also be added into your calculations. If you have partnered with a management company, they can help with the financials.
Research the location
The location of your vacation home should be carefully researched and considered; after all, you don’t want to make such a big investment only to find out that the area isn’t right for you. Check out the nearby attractions, shops, and restaurants, and look online for information about crime statistics. Get to know the area as thoroughly as possible so there will be no surprises down the road.
Partner with a local expert
Your REALTOR is a valuable partner during your vacation home search. Not only do they know the local market but your agent can help you make the process move along smoothly. For example, if you are planning to build, your agent can coordinate with a builder on your behalf so you can view, buy, and even build your dream property even if you live in another state and cannot be on site during each step.
Buying a second home is a big decision, so make sure you’re as informed as possible before you commit. Planning well ahead of time will help you avoid mistakes down the line, and it will also ensure that you have everything you need to make your investment a successful one.