Vacation homes can be great investments: They offer a much-needed getaway and can be turned into income-earning properties. And, if you choose wisely, they can deliver serious long-term returns.
But buying a vacation home also takes careful consideration particularly if you want to maximize the value you get from the home.
Here are some things to think about when you’re considering a vacation property:
- Will you use the home for income? When you’re not using the property, will you rent it out to travelers? If so, who will manage that business and handle all the bookings and cleanings? You may want to bring in a property management company if you need help.
- How will you maintain it? Maintaining your vacation property is critical if you want it to hold long-term value. Will you hire someone to care for it? Schedule regular maintenance trips? Make sure you have a plan before you buy.
- What are the tax implications? Owning another property is going to impact your taxes, as well as the deductions you’re eligible for. Meet with a tax professional early to ensure you’re prepared for these changes.
- Will there be extra costs? A vacation home will come with different expenses than your primary home. There may be HOA dues, taxes for operating a short-term rental, costs for traveling to the property, and more.
- What are the risks? Every investment has risks, so make sure you run through possible scenarios: The home could lose value, a renter could damage the property, or you might use it less than you think. You’ll need to be willing to take these risks or find ways to prevent those that are in your control.
Reach out if you have questions or need help looking for a vacation home that checks your boxes.
