A vacation home may be just the ticket if you love to visit sunny climes, the forest, beach, or mountainside.
These days, thanks in part to the sharing economy, more people than ever can afford a second home.
Today you can buy a home at relatively low interest rates, then rent that home out when you are not there.
Homeowners have successfully covered their mortgages and leases by renting out as little as one room thanks to sites like AirBnB.
According to John Banczak, executive chairman of TurnKey Vacation Rentals, for every $100,000 you spend to purchase a vacation home, you should expect yearly rental income of $12,000 to $14,000.
Vacation homes are appealing to owner and vacationer alike. The rate is often less than or equivalent to a hotel, but with the option to spread out more and eat meals in. For locations with popular attractions, owners can visit when they like and rent when they aren’t there.
In 2017, about 12 percent of home buyers purchased vacation homes. According to Economist Outlook, buyers wanted a second home for vacations (42 percent), for future retirement (18 percent), or because real estate prices offered good deals (12 percent). The median household income in 2016 for vacation home buyers was $89,900.
If you’re considering a vacation property, make sure to find a trusted local real estate agent to help you navigate the purchase. The agent will know the area and any local and state contract laws.
It’s also important to find a local person to keep an eye on the property, whether it’s your housekeeper, the agent, or a contractor. If you rent the property regularly, your housekeeper can be your second set of eyes, letting you know how the latest guests treated the property as well as how everything looks overall.
As part of your due diligence, factor in a higher insurance rate for a second home.
Consider installing a home security system for yet another set of eyes as well as a way to make sure the heat has stayed on.