Buying a Vacation Home

What to know before purchase


JUNE 24, 2021

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It’s been more than a year since the COVID-19 pandemic hit, effectively changing the way people work. A recent PricewaterhouseCoopers survey found that remote work has been a huge success and that less than 20% of executives expect their offices to resume a pre-pandemic work schedule. Looser restrictions regarding when and where you work may offer the perfect opportunity for you to invest in a vacation home.

Maybe your family spends a week at the beach or a month in the mountains and you’d like to take advantage of the good interest rates to buy a vacation home. Perhaps you want to be closer to your college-aged child so you have comfortable digs when you visit. Or maybe you’re on the hunt for an investment property that you’ll fix up to eventually rent out.

Here are some key considerations to keep in mind before buying a vacation home:

Financial decisions

Before you figure out where to buy a vacation home, determine your motive for wanting to purchase a second residence:

  • Will buying a vacation home be worth it in the long run? Renting out your property when you’re not using it can offset costs of ownership, making it more financially favorable than owning a primary residence.

  • What are the other costs associated with that vacation home? Are there HOA or condo fees? How much will you pay in property taxes? Secondary homes often cost much more to insure than primary residences. You’ll also need to determine specific types of coverage, such as flood protection for your coastal abode or earthquake insurance for that cabin in the Pacific Northwest.

  • Are you prepared to handle (or hire out) maintenance while you’re away from the home?

  • Can you get tax breaks for your vacation property? Check the latest IRS guidelines, or consult your financial planner to determine which deductions you qualify for, such as the investment property depreciation deduction.

  • Do you see yourself eventually living in that second residence full-time after retirement? If the answer is “Yes,” make sure you consider amenities you’ll need as you age, such as access to a good health care system or a one-level home.

  • Will you rent out your vacation home? Many tourist-driven locales are full of rental income properties, but before you put in that offer, check local restrictions on renting.

  • If you do rent out the house, will you pay a property manager to deal with rental transactions and any issues that may arise?

Location, location, location

What’s the best place to buy a vacation home? A recent report from Evolve Vacation Management found that more rural areas had significant appeal in 2020, likely owing to the pandemic. Whether you’re looking to invest in a property in the mountains of Blue Ridge, Georgia, a more tropical locale near the Florida Keys, or an urban loft in Portland, Oregon, try the place out before you buy.

Rent a property in the area you like, and spend some time getting to know the local businesses, cultural scene, and real estate market. This will give you insights into everything from the best hole-in-the-wall restaurants in that area to typical weather and traffic patterns. After a one-week stay at the height of tourist season, for instance, you may decide that you’d like to focus your vacation home buying efforts in a quieter area.

Year-round maintenance

Like any home, your vacation home will still need its driveway pressure-washed, its grass mowed, and its leaky toilet fixed. Are you prepared to spend the money and the time dealing with some of these issues both during busy times and in the off-season? And if not, can you shell out the money to pay a reliable professional to keep up yearly maintenance on the home? Similarly, you need to have a plan and a good local contact in the event that there’s an emergency, such as a flood, hurricane, or snowstorm.

Furnishing your vacation home

How often will you be there? Will you rent out the property? Answering these questions will help determine what type of furniture and decor you add to the home. That may seem inconsequential, but if you’re spending six months out of the year in that downtown Charleston row house, you’ll probably want more luxurious furnishings and a fully appointed kitchen with top-of-the-line appliances. That ski condo you only visit once in a while and rent out the rest of the year? You might want to save your money and provide just the basics for guests.

Screening visitors

You wouldn’t just invite anyone into your primary residence. The same goes for your investment property. Whether you use a third-party rental service, a local property management company, or you plan to rent the place out yourself, you’ll want to make sure you communicate strict policies in your rental contract. These include renter age limits, pet restrictions, security deposit, rights and obligations of the renter, and cancellation policies. Clearly communicated terms and conditions in writing help mitigate issues that may arise with long-term and short-term renters.

Also, make sure you’re taking the latest CDC travel guidelines into consideration to keep both you and your renters safe.

Security considerations

Any vacation home you purchase is an investment, whether you’re looking for financial gain or simply a relaxing getaway space to call your own. Protect your investment the same way you’d protect your primary residence — with a home security system. Here are some components that can help keep your second home secure and help prevent break-ins:

Explore the Brinks Home™ Smart Center to learn more about home security, whether for your primary residence while you’re away or for buying a vacation home.

Jason Stevens is a senior writer for Brinks Home. He is a "tech guy" who enjoys sharing home security and automation tips with others.

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