Five Need-To-Know Tips for Buying a Vacation Home
After years of hard work, it’s no wonder you’d like to take a well-deserved break. Those who are fortunate enough to reap the benefits of years in the workforce often do so by acquiring a vacation home.
If you think you’re ready to tackle a vacation home, consider the five tips below.
Make Sure You’re Financially Prepared
As buying a home is in the first place, buying a second home can be extremely difficult, especially when it comes down to money. In a recent survey, homebuyers cited their second most regretted mistake as not having enough money to support the purchase.
Assess your current financial situation and whether you have enough wealth and credit health to justify the purchase of your vacation home. Buy under your allotted budget and develop enough savings to make sure you’re being wise with your money.
Decide the Best Way to Pay
It’s critical that you know your options when it comes to financing your second home. The simplest method is to use hard-earned cash. Obviously, this isn’t a realistic option for everyone, but if achievable, it can prevent you from committing to another hefty loan.
Talk to a financial advisor who can lay out all the options there are for financing a vacation home so you can make the most educated investment.
Choose the Right Location
Once you make sure you won’t take a huge financial hit by purchasing a getaway home, you need to determine the perfect location. Not only will you have to love the home you’ll spend tons of time in, but you’ll need to be a fan of the surroundings as well.
To make the smartest investment, weigh the perks of your vacation home against the drawbacks of the surrounding area year-round to determine where your family (and your wallet) will be healthiest and happiest in the long run.
Consider the Rentability of the Home
Research shows that two-thirds of vacation homeowners rent out their vacation homes when staying in their primary residence. But, don’t assume that you’ll be able to rent out every property you look at, or that you’ll be able to profit off rental payments at all.
When thinking about rentability, keep your potential tenants in mind and be the best host you can. What age group visits the area most? Can you afford to offer rental-friendly accommodations like Wi-Fi or kitchen appliances for visitors to cook at home? Most importantly, remember to think about these details prior to purchasing so you can make an informed decision.
Prioritize Comprehensive Insurance
While you are familiar with securing a traditional homeowner’s insurance policy, insurance for vacation homes may be a new concept. Is there insurance specifically for vacation homes? Yes. Proper Insurance offers a commercial package policy specifically designed for the unique risks characteristic of vacation homes.
Designed to completely replace your current policy, there is coverage for building, contents, income, and liability. The standard vacancy clause is removed with no standard occupancy restrictions, and the commercial general liability responds to amenities such as animals and pets, liquor, pools, hot tubs, and more. There is also coverage for theft and damage caused by a guest. You deserve to have peace of mind knowing your property is covered with in-depth insurance for your vacation home.
Talk to your current insurer to determine the best policy for your scenario. A great question to ask your agent is: If I entrust my vacation rental home to a paying Airbnb or Vrbo guest for 3 days, and that guest damages or is injured at my property is their property and liability coverage in place to the limits of insurance?
