With the recent rise in remote work, vacation markets all across the country are experiencing a surge in demand that’s driven by buyers who are taking the leap to become second homeowners. If you’re considering purchasing a vacation property, here are a few of the pros and cons to keep in mind.
It’s a vacation home!
Let’s get this out of the way first and foremost: there’s nothing like having your own vacation home to escape to on a moment’s notice without having to worry about bookings. It’s all about personal enjoyment and creating a place where the whole family can have fun together.
When you’re not using it, there’s always the possibility of renting out your second home to offset the costs. Furthermore, depending on how often you rent it out, you may be able to deduct all of the operating expenses.
With the unprecedented shift in our work-life balance, real estate in vacation markets increasingly looks to represent a long-term store of value. For this reason, homes in exclusive destination markets are a safe bet to appreciate over time.
Double Your Home Expenses
It’s no secret that homeownership is expensive, and taking on a second property is a significant decision that needs to be carefully discussed with your financial advisor. After all, the last thing you want is for your vacation home to be a source of stress.
Maintaining a second home can be even more difficult than your primary residence because you’re not always there to oversee the property. Something simple, like fixing a leaky roof before it causes extensive water damage, can easily go unnoticed.
Higher Mortgage Rates
Mortgage rates for a second home are slightly higher than they are for a primary residence and, in addition to this, it’s quite common that lenders will request a larger down payment, which is important to factor in before you fall in love with your next home.