There’s a cold nip in the air. The festival lights that flicker like a pack of fireflies with the setting sun as the backdrop create a bokeh of memories that lead our thoughts in one direction- a holiday to a land far far away. Our hypothesis for such strong emotions is that these colourful lights seep into the essence of our being and stir deep seated emotions that are tantamount to relaxing holidays in far flung places; reasons that definitely push financial considerations into the background. And why not? The best vacation properties offer something right out of a Hollywood film (in our minds at least) – a view of the vast expanse of the sea, a mountain vista, a wooden cabin overlooking thick groves or a dock on a lake. Also a great retirement head start and an awesome, low cost destination for gatherings.
But flowery, quixotic dreams apart, before you invest in a vacation home keep in mind that you don’t have to buy the ultimate beach house with the high ceilings and French windows. It’s OK to start small. And also, it’s better if you don’t flow with emotions and spend more than you have to spare.
So what should you keep in mind before buying that ultimate vacation home which you would like to revisit every year?
Look for a place within three hours’ drive of a major metropolitan area or where you stay. Longer distances with difficult roads make weekend trips a pain. And this might turn you off from a visit to your vacation retreat.
Overenthusiasm could be a curse in the long run. Sometimes an investment opportunity seems so tempting that you can barely contain your enthusiasm. But buying a vacation rental property involves real estate, and it’s not like online shopping of shoes with 30-day return policies. So keep in mind your cash flow, the location, resell value etc.
The allure of vacation investment property is unmatched. One of the reasons is that whether you’re a skier, a lover of the beaches, or someone who dreams about fishing for 12 hours a day and scuba diving for the rest, there are homes available to meet a wide range of budgets/interests. Also vacation homes have long term profits. While all assets fluctuate in value in the short term, these properties retain their value mostly and even appreciate, simply because they are located in touristy/beautiful areas. So if you want to come back home with more than just a tan, a few souvenirs, instagrammed stories and a big hole in your pocket, take a soulful dip into the real estate world of vacation homes.
Here are some investment tips that you should keep in mind before buying a vacation home:
Buy only what you can afford even if you consider your vacation home as a potential way to earn income. View the home as a form of recreation, not an investment.
Buy an existing home instead of land.
Work with an agent who knows the area.
Research all four seasons before you buy.