Vacation Home Market Heating Up
By: Suzanne Benson
The vacation home market has been heating up over the last couple of years. Vacation home sales were up 29.7 percent over 2012 with 38 percent of the buyers paying cash. according to NAR’s Investment and Vacation Home Buyers Survey. They report that vacation home sales accounted for 13 percent of all transactions last year, the highest share since 2006.
MarketWatch reports that Destin, Florida ranks as the 5th top vacation hot spot, basted upon potential return from renting, provided by VacationHomeRentals.com. It reports that the average rent in Destin is $900 to $2,500 for a three-bedroom/two-bathroom home with a private pool and access to a private beach.
Five things to consider when making a second home purchase:
1. Keep to your budget. Before you start looking make sure you qualify for that loan, unless you are paying cast. When making out your budget don’t forget to add in recurring expenses such as mortgage, real estate taxes, assessments, maintenance, insurance, flood insurance, furnishings, emergency fund for repairs and travel cost to and from your vacation home.
2. Determine how much you plan on using the home. Of course distance to your vacation home will be a big factor, a five hour drive will limit the number of times a year you can visit the home. How far will the vacation home be for grown children and grandchildren if they plan on using the property.
3. Pick the right location. This will depend upon what you like to do. Are you more interested in snow skiing or in swimming and diving? How is the fishing in that area or golfing facilities?
4. How will upkeep be accomplished? If the vacation property has a lawn then it will require a lawn service for upkeep whereas a condominium complex will take care of all that for you. Some communities offer homeowners landscaping services.
5. Do your research on potential rental cost. What is the rental season in your potential home location, how long is the season? If you need to rent the property make sure you are investing in a location that will appeal to a large number of people. Check the homeowners association to insure they allow renting of the property. If you need to hire a rental service company find out what they will charge. Think about resale prices and trends in the area you are considering making a purchase.
Source: “Best Places in U.S. to Buy a Vacation Home,” MarketWatch (Aug. 8, 2013)