Every time you drive past a beach house for sale, you probably dream of one day owning one for yourself. The good news is that this dream might be more affordable than you think. But before you start looking for beach vacation homes in your favorite getaway spot, there are a few financial facts you should keep in mind that can help you choose your dream house the smart way.
Buying a Home Provides Ongoing Benefits
Buying a vacation home provides you with many of the same financial benefits as buying your first home. Tax breaks including mortgage deductions, closing cost deductions and property tax deductions can all ease the burden of your monthly payments, and you’ll be building equity instead of pouring money into hotels or rentals every summer vacation for decades.
It’s important, however, that you not be overambitious when looking at a vacation home. It’s best to use a mortgage calculator before you ever set foot in an open house to figure out exactly what you can afford and avoid falling in love with a house that’s simply not in the budget. From there, you should try to estimate your complete cost of living.
Income Properties Should Be in Certain Locations
The best part of buying beach vacation homes is that you can almost always count on being able to rent them out when your family isn’t using them so that you can break even or make a profit owning a second home. Keep in mind, though, that this means you should browse listings and go to open houses with not only your family, but also your potential renters, in mind.
If you have a large family vehicle, it might not be a big deal to load up beach gear and drive a mile or two; for a family who flew into town and rented either no car or a small sedan, being right on the beach might be important. You may not care about nightlife; your renters may only be looking at places within walking distances or restaurants and bars. When you’re working with your Realtor, make sure he or she knows that it’s important that whatever property you end up buying be in an area popular with vacationers.
Property Management is Generally Worth the Cost
Renting our beach vacation homes can easily cover the cost of your second mortgage. But if you have a full-time job in another city, trying to coordinate those rentals and ensure that the property is being well cared for can be difficult. Real estate property management companies can turn out to be good deals in this situation.
It’s true that paying for property management services will cut out of what would have otherwise been your profits. But you’ll probably also have more consistent rental traffic, spend less of your time trying to track down payments and spend less on maintenance and repairs. And what good is a vacation home, anyway, if it adds more stress to your life?
Are you thinking about buying a vacation home and renting it out the rest of the year? What would you prefer about this arrangement over a timeshare? Join the discussion in the comments.