Seven tips for buying your vacation home
When it comes to purchasing a vacation home, emotions can run high. The process can be overwhelming and a logical decision, based on economics and the long-term goals of the buyer becomes increasingly difficult. The process for choosing the right second (or even third) home can be boiled down to seven suggestions.
Choose the location carefully.
Conrad Hilton used to say “location, location, location”. And he was right. When considering the Caribbean, there are many islands to choose from. They all have their own idiosyncrasies and their own charms. But a buyer should always consider the time it takes to get from home to vacation spot and once there, how long it takes to access the amenities and activities that are important.
Rent first. Buy later.
Take a test drive of the area in which you plan to purchase. Take three or four opportunities to visit at different times of the year. Then, and only then, will you have an idea about things like traffic, crowds, restaurants, and other activities available on the island.
Don’t buy in haste.
Emotions can get the best of anyone. When you fall in love with a home, take a minute to reflect. In fact, take a day or more. Seek a trusted advisor for advice.
Create a budget.
Make certain that you have an understanding of all costs. Things like taxes, electricity, even cable service can add up.
Have a rental plan.
Many owners of second and third homes make their investments work for them by placing their homes in a rental program with a qualified local management and leasing company. While management fees can exceed 30% of the rental income, it’s well worth the investment by gaining peace of mind knowing someone is on hand in case issues arise.
Be realistic about how often you will visit.
If you buy on a whim, you may end up with a second home you don’t enjoy as much as you hoped or one that doesn’t fit your needs.
Understand what maintenance expenses to expect.
If you are purchasing a new home, this is not of general concern because most new homes come with a limited warranty of some type. Older homes are another matter and require that the buyer seek a professional home inspector, if possible, to thoroughly inspect the home. Air conditioning systems and appliances are the biggest issues. Don’t waste your time and money with home warranties because most will have “out” clauses that disallow many of the very things which fail. Place into an escrow account enough money to handle unplanned failures.
If you follow these simple rules, your path to owning a second home in paradise will get just a bit closer.