Vacation Home Buying Tips
If you are considering buying a Vacation Home, here are some helpful tips to remember.
1. Don't buy in a "bubble" market. In other words, don't buy in an
area where there are too many speculators; i.e., such as Southeast
Florida. In rapidly developing areas where lots and lots of developers
build and hope "The risks of the bubble bursting when supply exceeds
demand and your getting soaked are much higher. It may be better to
purchase in an older area that's already well developed, like
Breckenridge Colorado. The supply is so low in these areas that real
estate tends to hold its value. In fact The Breckenridge Real Estate
Market has seen double digit inflation for the past 3 years. The
Summit County Building department has estimated that the county will be
completely built out in the next 3-5 years, 2010 -2012. What drives
the Breckenridge Colorado real estate market is the fact it is home to
the second busiest ski resort in North America . They saw a 36%
increase in sales volume in 2006 over the previous year.
2. Buy with your wallet, not your heart. Make sure you're buying a
smart investment. This is especially difficult for vacation homebuyers
because they tend to be more risk-takers who tend to use our emotions
more than their head. It's easy to get caught up and sign on the dotted
line when you see that gorgeous beach home or perfect ski resort.
Know the numbers. What has the market done in the past. What are some
of the factors that can effect the value of real estate in the area?
Don’t forget to factor in the cost of a management company if your
considering renting the property out for a portion of the year. They
can range from 20-50% of gross rent. No intention of renting? Leave your options open. Never say never, urges. Today it may be financially feasible to not rent your home, but what will tomorrow bring?
3. Rent out only seventeen weeks and your new vacation home will pay
for itself. When your monthly mortgage payment is less than or equal to
one peak week rental, twelve weeks of rental will cover your mortgage
payments for the entire year. Other costs, including bills for your
phone, power, cable, and association dues, may be paid out of your
earnings from approximately five off-week rentals. Recent surveys
conducted revel that the average weekly rate is $1,656, and that the
average property is rented out twenty weeks. These figures suggest that
the average vacation home brings in more than $33,000 in rental revenue
each year.
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