Do you dream of owning your vacation home? But are you afraid of the thought of purchasing one? It is actually much easier than you might think.
Let's start with the benefits. These are the top benefits of purchasing a vacation home.
· If you travel often, you could save money over the long-term. Your annual mortgage payments for a vacation home can be as low as what you would pay to rent for two weeks if you spend two months at the beach each summer. You'll also be building equity over time and not giving your money away to anyone else.
· Your vacation home may be able to generate rental income while you're away. This could make your home a major moneymaker in popular vacation spots. This will be discussed in more detail later.
· The value of realestate, especially in popular areas, tends to increase over time. Your vacation home can help you build wealth even if it isn't rented out.
Your lifestyle and housing should match.
People often assume that they need to own a primary residence before purchasing a vacation home. However, this is not always true. It is important to match your housing needs with your lifestyle. It is possible to live in a large city but still need lots of space. A small condo could be rented in the city, and a larger home can be purchased outside the metropolitan area. You may want to live in a big country home but still enjoy the city. You could also purchase a condo in the city and own your country house.
In either case, the tax and financing implications are nearly the same.
Cost to own it
You can determine what you can afford in seconds. Next, you will need to find a lender who can help you determine the cash that is available for closing costs, down payment, and reserves. The total monthly cost of your current home, whether it is a rental or owned, and the total cost of the vacation home will be calculated. Plan for personal expenses that lenders won't include in your qualifying calculations.
Gas, electric, cable TV, and internet
Furniture and household ware
Your vacation home will have travel costs
Make an offer to a local lender
There are many vacation properties in local markets that are highly specialized. It is best to contact local lenders and real estate agents.
Local transaction fees, taxes, and commissions will be clarified by your agent. They can also advise you on local zoning regulations and property rental rules. The town of Sonoma does not allow vacation rentals, but other Sonoma County towns do.