Purchasing Paradise

It happens a lot. The dream vacation on the beach suddenly morphs into a dream of buying a piece of paradise. But what’s next?

According to a 2018 Investment and Vacation Home Buyers report by the National Association of Realtors, 72% of vacation property owners and 71% of investment property owners believe now is a good time to buy.

Forty-nine percent of vacation home buyers plan to use their property for vacations or as a family retreat. Vacation home buyers also tend to favor relaxing by the water: 33% purchased in a beach area, while 21% purchased on a lake front. Fifteen percent of vacationers prefer to leave their flip-flops at home, choosing to unwind in the country.  

If you’re motivated to do the same in your dream getaway area, here are some preliminary steps to take before you embark on your property search:

• Decide whether you want the place to be primarily for your use or also serve as a rental property. If you will try to recoup some of the purchase and maintenance costs through renting, the property you purchase should have a broad appeal and include popular amenities. Also, consider utilizing a professional rental management firm.
• Speak to your accountant about potential tax advantages or obligations involved with your vacation property. Second homes and rental properties are subject to specific tax rules, so be sure you know what’s expected and what you can deduct.
• Think about location, location, location. Yes, it’s a cliché, but no less true for vacation properties than for other real estate. Homes near beaches or mountains tend to attract the greatest number of interested buyers or renters. Check out all four seasons in your targeted area because the atmosphere can change dramatically based on busy or slower seasons. Finally, if you plan to use the place often, consider something within a few hours’ drive or flight. Anything much farther tends to discourage personal frequent visits.
• Consider renting first, then buying. This will give you time to get to know the development, the area and the turnover rate among your future neighbors. All these factors are crucial to your enjoyment of the place – and its resale potential.
• Working with a loan originator who lives and works in or near your targeted community is your best bet. Determine your loan options and obtain a pre-qualification letter from a lender prior to beginning your second-home search. The letter gives you an idea of how much house you can afford – so you can easily eliminate vacation properties not in your price range – and lets sellers know you have been vetted financially. Remember, being pre-qualified does not guarantee a mortgage, and no loan is one-size-fits-all.

Experienced loan originators in the Motto Mortgage network are ready to help make your vacation homeownership dream a reality. Your Dream. Our Expertise.*

Source: www.nar.realtor/infographics/infographic-investment-vacation-home-buyers-2018

* Your Dream. Our Expertise. is a registered Service Mark (SM) of Motto Franchising, LLC.