How To Finance A Vacation Home – Having a vacation home is not only a luxury, but it is a great investment to make. Whether you’re looking for a new place to spend your extra time, or you’re interested in investing in a property to rent out to other vacationers, here are four things you need to know about financing a vacation home.
Consider the Cost of Buying and Maintaining
Most people don’t consider the maintenance that goes into owning a vacation home. Sure, you might only be visiting a few times a year, but it needs to be maintained year-round. There will be an extra maintenance cost if you plan to rent out the property to a number of different residents.
Work with Lenders
It’s always a great idea to work with lenders on financing deals. They understand that this is your second home, and will be able to provide the best advice on how to finance it through every step of the process. Also, it’s important to keep in mind that most lenders require a 20 percent down payment on a second home.
Location is Important
When considering any home, location is one of the most important factors. When determining the location of your vacation home, think of places where others would also want to go. In the event that you choose to rent out your property, you’ll want to make it an ideal destination; which will ultimately provide you with a number of other benefits.
You always want to assess the potential of the second home you’re purchasing. How much time will you be able to reap the benefits of having the home? If it’s a roadtrip away, it will be more beneficial than a home that you can only get to by hopping on a plane. In addition, home amenities play a huge role in the potential of a vacation home. If it’s a mountain getaway, a hot tub and fireplace are a must. If it’s a beach destination, outdoor showers are a huge perk.
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