By Jim McKinley
Photo by Pexels
Thinking of making the leap and purchasing a vacation home? You won’t be alone. For many, purchasing a second home is an important part of retirement. However, it also comes with plenty of preparations and difficult decisions. Here’s a quick guide to planning and budgeting so you can enjoy your vacation home without worry.
Set a Realistic Budget
Before you start looking for homes, it’s important to figure out the maximum amount of money you can spend on a property. This will prevent you from stretching to buy a tempting home you cannot afford. Not only do you need the money for a down payment, but you have to consider monthly spending on your mortgage, property taxes, insurance, utility bills, maintenance, and property management for your vacation home. It’s safe to say your finances should be in solid shape before buying a second home. You should be mostly debt-free, have adequate savings for retirement, and cash for a 20 percent down payment. Look at your income and make sure you can handle monthly costs without making major lifestyle changes.
One way to help stretch the budget, as well as help pay for the mortgage on your second home, is to rent it out during times of vacancy. In order to increase your profits in the long run, ensure that your home stands out from the competition by budgeting for modifications. Guests will surely want Wi-Fi access during their stay, as well as their pick of extra amenities such as bicycles for exploring the area. You can also save money on water bills by installing motion-sensored faucets. Some of these modifications could be too costly and dangerous for you to take on, so have a contractor do them for you. Before hiring, figure out a detailed plan of what you want done and fully communicate it to the contractor.
Carefully Explore and Experience Your Location
Unlike the flexibility of vacationing wherever you want, the location of your new home is permanent. So, make sure it’s a place you really like for a vacation home. Consider the purpose of your second home to ensure you’ve chosen an ideal location. If it’s for family getaways, make sure it’s easily accessible for everyone and surrounded by activities for people of various ages. Before buying the home, try renting a place in your desired location. This way, you can make sure you actually enjoy the area and that it has everything you need close by. If you plan to move in permanently in the future, avoid purchasing an isolated home or one that’s too far from family.
Consider Choosing an Accessible Home
As you age, you may not be able to get around as easily as you used to. This is why retirees should look for accessible homes. Single-story homes are desirable for seniors because they prevent the need to use staircases. Wide hallways, entryways, and step-in showers will be easier to maneuver with a walker or wheelchair. Also, ensure your neighborhood is within easy walking distance of amenities or that there is a good transportation system near your home.
Decide Who Will Look After the Home
Since you won’t be staying in your vacation home full-time, you’ll need someone to look after it or at least check in from time to time. There are various options for house care, including property managers, house sitters, or local caretakers. According to House Logic, property managers take most of the work off your hands, but they come with a heftier price tag. House sitters may be willing to stay at your home for free. however, they might be hard to find and don’t have the professional experience of paid caretakers. If you plan on renting out your place short-term, a property manager may be best since they help check in guests and coordinate cleaning as well as regular maintenance tasks.
Keep Insurance Costs as Low as Possible
Cutting costs on insurance will help make your second home much more affordable. According to Insurance.com, vacation homes tend to be hard to insure because they are left unoccupied for much of the year, increasing the possibility that water leaks go undetected or that you’ll be a target of break-ins. You can reduce your insurance costs by installing alarms and hiring a property manager. for your vacation home Also, try to avoid homes in disaster-prone areas, such as places where hurricanes, tornadoes, or fires are a threat. Some insurance providers may refuse to insure homes with a pool or charge you higher rates, so you may want to avoid these properties.
There’s no doubt that purchasing a second home is a huge point of pride for any retiree. Just make sure that the house you purchase realistically fits within your budget and your lifestyle needs. Careful planning will keep you from making quick decisions based on temptation and convincing real estate agents!