The best tips for fitting a vacation home into your retirement lifestyle
Reaching retirement is a major milestone, and now you’ve earned the opportunity to relax and enjoy yourself. Maybe fitting a vacation home into your plans is next on the agenda. Good planning and research are crucial to making it work.
When selecting your vacation home, there are several factors to consider. Here are some things you should know before you commit.
Know your location.
According to Forbes, your first priority is to become familiar with the area you are considering. Visit several times and make sure you enjoy the destination and will be comfortable spending significant amounts of time there.
Know your expenses.
Consider all the costs involved in purchasing your second property, including property taxes, utilities, property maintenance, insurance, and any fees such as trash pick up or condo associations. Remember that with ownership you will be responsible for things like electricity year-round, not just during visits. Also, insurance costs in some resort areas can be quite high due to occasional hurricanes or flooding; get quotes before buying. Learn about the tax rules that apply in your property’s location and what would constitute being a landlord.
Know who will be the caretaker.
You need someone to tend the property when you aren’t there, especially if you plan to rent it out and if you are away for any length of time. You’ll also want someone who draws and vets renters. Real estate agents or property management companies are perfect for this.
Know your finances.
According to Coastal Living, approximately 30 percent of second-home purchases are made with cash, and making a purchase with cash gives you bargaining power. Sellers typically prefer cash, since sales are usually quick and clean, while financed sales can be complicated and time-consuming.
Know your income.
Generally speaking, buyers can overestimate their income from vacation rental properties. Expecting to cover all of the basic costs of ownership from your current budget is wise.
Choosing a fixer-upper.
You might decide that the best way to fit your vacation home into your budget is through buying a property that needs some repairs. It’s a great way to get more bang for your buck if you have the time, money and energy. If you are considering a fixer-upper, some professionals suggest these key considerations:
Evaluate the neighborhood.
Consider the neighborhood in which you’re making the investment. The local market will make a direct impact on your home, and if you put more into your project than the going rate, you can lose money in the long run.
Decide what projects you can do and what the materials will cost, then look at the work you will need completed by professionals and get estimates. Prioritize what will be done and in what order, then make your timeline and budget. For example, many vacation homes need kitchens or bathrooms updated, and some experts say this can be an important draw for renters. According to HomeAdvisor, the average price to remodel a kitchen ranges between $12,047 and $33,852 and takes two to three weeks to complete.
If you are purchasing a vacation home, make sure your top priority is enjoying the property and location. According to the Wall Street Journal, “Rental income is so unpredictable it should be viewed as gravy … and buyers certainly shouldn’t rely on it to cover their mortgage and other expenses.” They suggest making lifestyle and pleasure your top reasons for making the purchase.
Your getaway awaits
Take into account the many factors that will affect your vacation home purchase. You might even want to buy a fixer-upper. Whatever route you choose, be realistic in your expectations. By following these tips, your vacation home will fit nicely into your retired lifestyle.
Featured Image courtesy of Pixabay
Michael Longsdon is the creator of ElderFreedom.net, which advocates for the rights and support of seniors.