By Theresa McArthur of guidesforseniors.com
Buying the Right Vacation Investment Property is as Easy as Following These Steps
Have you ever dreamed about owning a home in your favorite vacation spot? Is retirement on the horizon, giving you more free time to enjoy your favorite getaway spots? Perhaps you’d like to rent it out most of the year while enjoying a few weeks of vacation time there annually with your family. If you’re ready to find your ideal vacation rental, real estate pros Peg and Jeremy King can help you get the keys to your new property in the center of Wine Country! In the meantime, these tips will help you prepare for your search.
1. Should You Buy a Vacation Home “As Is”?
If you want to save money on your investment from the start, look into buying a home “as is.” Basically, this means that the seller won’t be responsible for carrying out any renovations or fixing maintenance issues before they turn over ownership to you. Furthermore, they will not be responsible for covering the costs of these projects.
If you’re going to buy a vacation home “as is,” make sure to have it inspected first, and determine whether or not you can reasonably cover the cost of repairs on your own. If the repairs are extensive or too big of a headache the costs in time, money, and sanity might outweigh your initial savings.
2. Find a Real Estate Agent for Your Perfect Investment Property
Working with real estate agents like Peg and Jeremy King can make house hunting easier, especially if this is your first time purchasing an investment property. Although you’ll be staying in your vacation home from time to time, you’ll still want to look for a real estate agent who understands the specific needs of investors. Buyer agents who have experience working with investors and possess extensive local knowledge are ideal for those looking to buy an extra home. They will be able to clue you in on potentially lucrative properties with local connections and data!
3. Proper Real Estate Market Research is Key
Your real estate agent should be an expert in the area you’re house hunting, providing you with the most valuable information to make your big decision. But you should also do some independent market research to identify your preferred neighborhoods and figure out a general price range for investment properties and get a temperature of the local housing market. MillionAcres recommends looking at macro trends in the national market first and then researching supply, demand, prices, occupancy rates, and rental rates in the vacation area where you want to buy. You can also ask your agent for a monthly market report.
4. Visit and Explore the Local Neighborhoods
Naturally, you don’t want to buy a vacation home sight unseen. Spend some time exploring the area and setting up viewings, getting a feel for the local businesses and activities. In between viewings, it’s a good idea to simply walk around neighborhoods you’re curious about and assess what you see. Kiavi states that you should look for neighborhoods with ongoing redevelopment – if developers are upgrading construction in certain areas, they expect an influx of interested buyers and tourists soon.
5. Make an Offer
You’ve visited the area you want to buy in, and you’re pretty sure you’ve found the ideal vacation property. It’s got all of the amenities that visitors would be interested in, and the location makes it easy to access popular local activities. Now, you’ve just got to put in an offer!
If you have enough equity in your current home you’re likely able to refinance your home to generate needed funds and finance your investment property. As you research how to refinance, you’ll discover that the process essentially replaces your current mortgage with a new one that allows you to access home equity and possibly secure a lower interest rate. There may also be other perks to refinancing, such as eliminating PMI, reducing the length of your loan or switching to a fixed-rate loan. There are even options to buying with low or no credit!
But how can you ensure your offer is competitive, especially if you’re investing in a hot market? Approach the negotiation with confidence, and get ready to prove to the seller that you have the necessary income and cash reserves with proper documentation. You can also offer earnest money and cover the closing costs to make the deal even better. An experienced Realtor will work with you to present the best offer that you’re comfortable with.
Owning and managing a vacation home is a major undertaking. That’s why it’s so important to choose an investment property that will provide you with the returns you’re hoping for from short-term renters, as well as fulfill the need for your perfect getaway. By following these guidelines and with the help of expert Realtors like Peg and Jeremy King, you’ll be able to make an informed investment and enjoy your vacation home for years to come!
Theresa McArthur knows firsthand that the life changes we encounter as we age can be difficult to navigate. From taking care of your health and choosing from numerous insurance options to deciding where you’ll spend your golden years and detailing your end-of-life wishes, the decisions that come along with aging can be overwhelming. She created Guides for Seniors so there would be plenty of information available to guide seniors through these processes and bring them peace of mind.
Main Photo via Unsplash