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Everything You Need to Know About Buying a Vacation Property

by Sterling Realty Group LLC 11/26/2018

Owning a second home or vacation home is the dream of many Americans hoping to retire in style. However, owning a second home can also be a huge financial asset and even an added form of income if you’re savvy with the rental process.

What stops most of us from buying a vacation home in our ideal getaway? The funding, of course. But, there are ways to plan ahead to ensure you’ll be ready to take the plunge and purchase a second home when the time comes.

In today’s blog post, we’re going to be talking about the steps to buying a home away from home and give you some tip on how to accomplish this goal in the most financially-sensible way possible.

1.  Location is Key

When you buy a second home, you take on all the responsibilities of homeownership a second time. Since you won’t be around every day to tend to maintenance tasks and troubleshoot problems, you risk discovering costly repairs that could otherwise be avoided.

The most common issues to be concerned with are frozen pipes in northern climates, flooding in coastal areas, and problems like pests that can be found just about anywhere.

Depending on your budget, you might want a home you can drive out to on the weekends, meaning somewhere close by to your primary home. This option also makes it easier to stay up-to-date on home maintenance tasks before they become an issue.

2. Try before you buy

If your ideal vacation home is in an area you’re not totally familiar with, it’s a good idea to visit the neighborhood, talk to the locals, and gain their perspective on the area before buying.

This trip will also give you a sense of what you can expect to spend each time you visit the home. And, if you plan on renting out the property when you aren’t using it, you’ll be able to gauge what a reasonable rent price is for the location.

3. Earning income from your vacation home

Making extra cash from a home that you get to use pretty much whenever you want. Sounds like a dream, right? It can be if done properly, but you’ll need to ensure a few things before you can start earning income from your vacation property.

First, be aware that investment properties often require a larger down payment (typically 30%). Lenders also charge extra interest on homes that will be rented out.

Finally, there are local and state-level laws you’ll need to adhere to. These laws are designed to protect your interests as well as the people who rent out your property, so make sure you use a standard rental agreement for your area.

4. Making an offer

You’ve been here before. Once you’ve decided on a home, it’s time to start crafting your offer and negotiating with the seller’s agent.

However, before you pick a number, do some research on all of the expenses you’ll be paying on the house in question. Property taxes, homeowners association dues, utilities, and any other costs should be on your radar before determining if it’s the right home for your budget.

You’ll also want to be aware of the stipulations of renting out a property you own. This includes reporting income from renting your home to the IRS.


Now that you know the steps you’ll need to take to move toward your goal of buying a vacation home, you’ll be better equipped to make decisions that are best for you and your family’s future.

About the Author

Author
Sterling Realty Group LLC

Here's what I can tell you as a tenured licensed associate real estate broker in Michigan. 

- Dedication and continuous real estate education keeps me at the top of my profession. 

*FOR SELLERS- Many qualified buyers are looking to buy a home like yours right now! We have more buyers than properties available.
Why don't you reach out to me and let me guide you in researching putting your home on the market? 

*FIRST TIME HOME BUYERS - Let me help you get pre-approved. Banks are offering low rates. Many loan programs are available, some Zero down. Owning a home could be cheaper than rent! Why don't you reach out to me and let's talk through the different financing options available. 

*INTERESTED IN PURCHASING A LAKE FRONT HOME? Sterling Realty Group LLC serves the hundreds of lakes in Hillsdale, Lenawee, Jackson and Branch Counties. Specializing in the "Irish Hills" (US 12 from the northeast corner of Hillsdale County, taking in the northern portion of Lenawee County and most of southern Jackson County into Washtenaw County) The beautiful Irish Hills contains many lakes, state parks, and Michigan International Speedway. What kind of lake are you considering? ( all-sports=speed boats/jet skis or a fishing=no wake rule) What acreage, depth, base, or lake chain do you want? Want kind of fish can be reeled in? Approximate distance from my metropolitan area? 

Here's what sets me apart from other real estate agents.

From saylesmm; Belle is fantastic, very personable, knowledgeable and she communicates in a very timely manner! She made selling our home an easy experience. We highly recommend her and would definitely use her services in the future.

From qlockwood; Belle did a wonderful job of managing the whole selling process for us. We had two houses listed with her and we closed on both of them at one location back to back same day. I recommend her to friends and family.

From user90038804; While it was a long drawn out process thanks to our lender, Belle hung in there with us and kept the sellers from pulling out. This was our dream home and it’s ours all thanks to her!

From misseann2003; I worked with Belle Stier to purchase my home and really can’t say enough good things about her. She is knowledgeable, approachable, personable, endlessly patient, and incredibly generous with her time (including mornings, evenings, and weekends over the course of several months 

From user14997761; Belle helped me buy a foreclosure home. Was very helpful and responsive. I actually recommended her to my grandparents when they were trying to sell their home. If I'm ever looking again I will definitely give her a call.

From Angie; We appreciate everything & have been giving your name out as a realtor.