5 things to know about buying a vacation home

In the spirit of the best vacation season, I want to inform you on 5 things you should know about buying a vacation home. There are lot of good reasons to buy one beside from being financially good investments. As with any real estate, location counts more than any other single factor. The best vacation properties offer something special - a view of the ocean, a mountain vista, a dock on a lake. For maximum appeal to potential renters or future buyers, look for a place within three hours drive of a major metro area. Longer distances or difficult roads make weekend trips a pain, and that limits your market. Lets jump right in

NOW is a good time to buy:

You hear me say this all the time but seriously - in many second home spots, prices are still close to their five- year lows. According to Fiserv, single-home prices in Napa, California, are down 47% from thier 2006 peak for example. The average house in Ocean City, NJ costs 24% less than it did in 2006.

A HOME is a better deal if it's rent-able:

It's a smart idea to shop as if you're going to the place out. That's because home's rental potential can affect its resale value.

Before you make a bid, make sure that the home owners association or township allows short-term rentals (many do not). And keep in mind that renters prefer homes with at least one bathroom for every bedroom.

DO NOT count on rental income to pay your bills:

According to homeaway.com the typical rental property rents out just 17 weeks a year. Including management fees also cut into your profits. TO get a handle on a property's income potential, ask a management company for a history of rental dates and rates for homes comparable to the one you're considering. If you monthly loan payment is less than or equal to one peak week of rent, you're likely to break even.

Lenders raised standards:

If you use the property primarily as a second home and you'll pay about the same mortgage rate as you would on a primary residence. If you need rental income to qualify for the loan, however, the house is treated as an investment property - so you'll have to put down as much as 25% for the down payment and pay up to one percentage point more in interest.

TAX Benefax

Stay there for less than two weeks or 10% of rental days and you can deduct operating cost!

Call or email us to find you a perfect vacation home.

Sincerely,

Team Sohail