At least 6% of Americans own vacation homes. That means they have their normal house and a second home.
Some of these people use their second home to vacation and relax, while others use it to rent out and make an extra income on the side.
Have you been thinking, “should I buy a vacation home?” For whatever reason you’ve been thinking about buying a second home, here are some important factors to consider before buying.
Think About the Pros and Cons
While a vacation home can seem wonderful, there are also drawbacks to having a vacation home. It’s never going to be all good or all bad – it’s a bit of both.
There are multiple pros to consider when thinking about buying a second home! And you shouldn’t overlook these.
- Save money if your family vacations a lot
- Rent it out to gain extra income
- Real estate values are on the rise
- You may one day want to live in this second home
- Potentially get tax breaks
- You could join a house swap club
The list goes on and on from here, but these are some of the main pros to owning a second home. Buying a vacation home to rent out can bring in extra income, but it means that you cannot always use it when you want!
While there are many reasons to want to buy a second home, there can be drawbacks. Knowing these before you purchase is crucial.
- You will need to pay the mortgage, property taxes, insurance, utilities, and more
- Prices, where second homes tend to be, are more expensive
- You have two homes to maintain
One of the main things to consider as a drawback is a financial burden it could cause.
Understand the Financing For Buying a Vacation Home
When it comes to buying a vacation home, there are more factors than just the price tag to consider. You have to take into account the actual cost of the home, the interest on a loan if you choose to finance the home, and insurance costs.
It’s also important to note that it is more difficult to finance a vacation home than a first home. All of that should be squared away before you start looking for a second home.
You also have to consider how much maintenance will cost, as well as buying new furniture and other needs for the new home.
Knowing how your second home affects your taxes is also important.
Answers to Your Question: “Should I Buy a Vacation Home?”
Now that you have read all of these topics to consider, you can stop asking yourself “should I buy a vacation home?” Instead, you know what you need to know. You’re ready to make a decision!
If you enjoyed reading about everything you need to know about vacation homes and buying a second home, check out more blogs on the site!