What You Should Consider Before Buying a Second/Vacation Home

Thinking about buying a second home or vacation home? Here are a few key points to consider.

Before you decide to purchase that second home to use yourself or to rent out as a vacation property, there are a few critically important things you need to consider:

First and foremost, you need to define whether the home is a second home or a vacation home. For example, if you’re renting it out, you may not be able to use it when you want to. You also have to follow certain rules and restrictions, and a lot of associations don’t let you rent out second homes.

Whether yours counts as a second home is less about the money and more about your lifestyle. Whether it counts as a vacation home depends primarily on its cash flow—what kind of money can it legally make in its area?

It’s an investment to either make more money or to enjoy yourself, but not both.

Purchasing a second or vacation home is different from other home purchases from the very beginning: It’s an investment to either make more money or to enjoy yourself, but not both. If you don’t define it as either an investment or personal purchase, it can cost you. Why? There are different tax implications regarding second homes and vacation homes. It’s also a good idea to familiarize yourself with the HOA and/or county rules and regulations in the area you’re purchasing the property in. For example, the Tampa Bay area is very restrictive when it comes to things like Airbnb rentals. Don’t hesitate to call the HOA beforehand to ask if having a rental like an Airbnb is allowed. Finally, be sure that you’re up for the commitment. Having an Airbnb or rental property can become its own job and requires a considerable amount of your time. It might sound cool to tell people that you have a vacation rental, but in reality, it can be a drain on your time and resources, and it might be cheaper for someone to just get a hotel room and save their money. If you have any questions about buying second homes, vacation rentals, or about purchasing property at all, feel free to reach out to us. We’d love to help you.

No comments :

Post a Comment

Note: Only a member of this blog may post a comment.