Knowing what to look for when buying a vacation home means budgeting, choosing a location, knowing your needs, and figuring out insurance.
September 30, 2017 ·
by Nicholas Wilson
Knowing what to look for when buying a vacation home is not as easy as it might sound. Sure, you are positive that you want a relaxing and fun place, but there is much more that goes into the process in order to guarantee that the place is right for you. Whether you are an experienced home shopper or relatively new to the process, you can benefit from a bit more information on buying a vacation home and doing it well.
In this article, Step 1 covers setting a budget, Step 2 outlines choosing a location, Step 3 evaluates your family’s needs, and Step 4 goes over your insurance situation.
Step 1: Set a budget. This is probably not the first thing you want to hear, but it is the most important detail to figure out before you jump into the process of researching actual homes.
For one, if you start looking at vacation homes before you set a budget, it is much more likely that you’ll exceed what you can afford. We naturally gravitate to the highest end of the spectrum in terms of luxury, so when your budget finally reins you in, you’ll be disappointed with the home you can realistically afford.
So, determine your budget before anything else. Keep in mind all your various financial obligations and any potential obligations that might come up soon. Do you have a child starting college soon? Are you going to need a new car in the near future? Questions such as these will help you develop a financial plan going forward.
Finally, don’t forget about added costs such as homeowner’s association fees, insurance, and other recurring fees down the road. These can add up.
Step 2: Choose a location. There are a lot of factors at play when choosing the location of your home, so be sure you keep these in mind.
The first is, of course, your own preferences. Do you prefer the mountains or the beach or neither? Is your vacation home intended as a once a year getaway or a common gathering place for your family? Do you want to be able to drive after work on a Friday or will it take longer to travel there? This will affect the proximity of the home.
Finally, do you have worries about weather or tourism? If you want a vacation home on the beach in North Carolina, for example, is the threat of a hurricane too much of a hassle for you? Or does the fact that tourist season will totally change the region sometimes during the year bother you? These questions will help you settle on a location.
Step 3: Evaluate your family’s needs. What you plan to do with your vacation home will affect what exactly you decide to purchase.
Do you have a large extended family who comes to visit? Do you want to host regular holiday gatherings? Or do you want the vacation home as a simple getaway for you and your spouse? Or perhaps you are thinking somewhere in between? Regardless, figure out what you want so you can be sure you’ll be as happy as possible with the purchase.
Step 4: Figure out your insurance situation. Depending on where you end up purchasing the home, it is very important to look into insurance.
You may need to carry much more insurance than you are used to depending on where your home will be located. Flood insurance could be needed in addition to a normal homeowner’s policy, for example, so be sure to look into any official guidelines based on the county and state your home is located in. It is imperative that your investment be protected against every possible threat.
Knowing what to look for when buying a vacation home is not difficult but you should approach the issue with as much prudence as you can. Looking to any possible pitfalls or benefits of decisions you make now is important, and a financial investment as serious as this deserves your careful attention every step of the way. If you can balance your wants with your needs, you’ll end with a wonderful home that is a place your whole family enjoys.
by Nicholas Wilson
by Cheryl Knight
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