10 Things to Consider
When Buying a Vacation Home (Part 1)
Buying a home you will use as a second or vacation home is different than purchasing a primary home where you will spend all your time. There are a number of important considerations to give some thought to before getting too far along in the process. (Here's the link to Part 2).
There’s a lot to think about, so here is Part 1, in no particular order:
What lifestyle are you hoping to have in your second home? And how will it differ from life in your main home…or will it be much the same? Many people live somewhat differently when enjoying their vacation home than they do at home, depending on how long they are there and how often. Indeed, for many that’s exactly WHY they want a second home – to enjoy a vacation away from home and all the routines like cooking, shopping, and of course work.
I created a questionnaire I share with buyers that focuses on lifestyle issues, relevant for any purchase actually. Read more in this lifestyle post about issues you should consider.
The type and size of the home may be different, for example, or the condition (e.g., turn-key) may be more important if you don’t want projects during your vacation time.
Lifestyle issues should also involve some thinking about amenities you might desire - a pool, tennis, extra storage for beach items, secure parking for leaving a vehice there when you are not in residence, nearby shopping and dining, public transportation, and so much more.
Obviously budget is an important consideration, and as with any house purchase you need to know upfront what you can afford, plus make some decisions about either paying cash, or getting a loan.
Mortgages for second homes vs. investment properties can have some different rules so be sure to check with your lender, and of course get pre-approved BEFORE you start your search. If you are hunting for a second home in a hot market like ours, you will want to be ready to make a decision, and an offer, right away which includes having either your Proof of Funds or a current Pre-Approval letter.
Other financial issues to keep in mind are the costs of having an additional home – the mortgage (if you have one), homeowner’s insurance, HOA fees (if any), maintenance, repairs, furnishings, travel to and from the home, utilities (gas, electric, phone/cable, trash, sewer, water), and property taxes, among others.
There are a number of considerations here, and they may be different from what was important to you when purchasing your primary home. Lifestyle certainly is a big part of the equation – do you want to be at the beach, as most people do who are buying second/vacation homes here in Carlsbad or nearby along the coast, or do you prefer the mountains or desert, or perhaps being in a big city? Do you want great weather year-round (America’s Finest City, San Diego, offers a wonderful outdoor lifestyle year-round because of our weather) or is the change of seasons important, with snow for skiing for example.
You will also want to consider how far away you want your second home to be? Do you prefer a place that is just a couple hours drive so you can use it every weekend, or is a longer drive, or even a flight, ok? How often do you plan to use it and how much time are you willing to spend to get there.
Some buyers of vacation and second homes want the option to be able to rent their home when not using it. There are, of course financial and tax implications of doing this so you will want to have a chat with your CPA so you understand the issues about rental income and related matter depending on how must you rent your place.
The other important question, IF you want to be able to rent, is to understand what, if any, restrictions there might be around renting depending on the community the home or condo is in, as well as any restrictions from the city. In some places you can do vacation rentals, or AirBNB-types of renting. In others (and becoming more common in my area) you must rent for at least a month at a time.
The other consideration is whether you WANT to rent a place you consider your home, and how often. Or would it, perhaps, just be for family members and friends?
Maintenance issues are often important for those who are buying a second home. Your idea of lifestyle in your vacation may be “no maintenance!”
Do you want a property that is low or no maintenance, especially the exterior, or are you willing to take care of that yourself as needed, and pay for others to do so when you are not in residence or just because you don’t want to DIY? This might prompt a choice between a condo, where your HOA fees cover exterior maintenance and landscaping, versus a single family detached home.
Stay tuned for Part 2 for other important things
to consider in your second home purchase.
I am happy to help you with any questions or concerns you may have about purchasing a second home in the Carlsbad or North San Diego County area, especially along the coast. Please give me a call at (760) 840-1360 so we can discuss your particular needs and budget, and I can address any questions that you have before you get too far along in the process.
You can search for your second home in Carlsbad here, and elsewhere in North San Diego County by clicking on link below. Or I will create a custom search for you once we discuss your particular needs, budget and location interests.