According to the National Association of Realtors, in 2014, 1.13 million vacation homes were sold in the United States, which was 21 percent of the total residential home transactions during that year. Today, buying a vacation home is still a popular choice as it provides your family with an enjoyable location to spend more time together. But, before you decide on a vacation home, here are three tips that can help you get through the process.
Choosing a Smart Location
When you are shopping for a vacation home, there are several things you need to consider when you choose its location. First, choose a location that you and your family enjoy and would want to visit often, such as a home near the beach, near a lake, in the mountains, near a popular theme park, or at another attractive destination. This will make the home a good investment to your family, because you will be more likely to use the vacation home several times each year. Choosing an optimal location will also help make the vacation home attractive for vacation renters, if you choose to rent it, to help you cover the costs associated with your vacation home.
You also should consider the distance your vacation home's is from your primary home, as it will affect how often you can travel to it. For example, if you select a vacation home in Fiji, make sure you have the extra income to pay for air travel to get there each time you want to use it. You don't want to buy a vacation home in a location that requires you to save up for close to a year to pay for the travel expenses.
Deciding to Place It on the Rental Market
When your budget is tight while buying a vacation home, keep in mind you can rent out your vacation home to help with its costs when you are not planning to use it. For this reason, owning a vacation home in popular destination will help attract renters to help cover your mortgage and other expenses with the vacation home's upkeep. Make sure any location you choose will allow you to rent out your unit, as some condominiums and planned communities might prohibit this practice. Then, you will also want to offer the property as a furnished unit to help attract potential renters. When renting your vacation home, keep in mind you will need to plan your vacation dates in advance so your vacation home isn't rented to other vacationers and to reserve the home for your use.
Do some research on your potential vacation home's location to find out information on the rental market. Talk to the manager of a local property management company to find what size of homes are most attractive to vacationers. Ask how much rent you would be able to collect for each size of home. Then, you can use this information to help select an appropriately-size of home for your family's vacation property. Although this home will be for your family's vacations, it will also be considered an investment property that can potentially pay for itself with its rental income.
Selecting a Property Management Company
When you buy a rental vacation home for your family, the last thing you want to do is worry about managing it. Especially if the vacation home is in another state or country. For this reason, consider hiring a professional property management company. The property manager will handle such tasks as the property's maintenance, advertising and qualifying renters, showing the unit, collecting rent, and cleaning the unit. Shop around to find a reputable property management company that offers good recommendations from other clients and a high rental rate.
A property management company will usually charge a management fee based on the percentage of your vacation home's rental income. Expect to pay a management fee to the management company of anywhere from 20 to 50 percent of the property's rental income.
Use these tips to help you choose a vacation home. For more information, consider sites like citycreekliving.com.