Questions to Ask Before Buying a Vacation Home

If you're thinking about buying a second vacation home for vacation or rental purposes, then you'll need to do some homework before you get serious about shopping. 

Homeownership is a big deal, and buying two homes can either be a path toward long-term income or a mistake that will sink you financially.

Here are the questions you should ask (and answer) before you make any offers.

Why do you want a vacation home?

• I want a rental property for short-term tenants (Airbnb)

• I’ve always dreamed of owning a home in ________.

• I visit all the time and want a place to stay.

• I want to retire here; buying a home seems like a good first step.

What can you afford?

• Second homes usually require at least 20% down

• Mortgage rates are usually higher

• Taxes and insurance

• Utilities

• Maintenance and upkeep

• Cleaners

• Landscaping

• Property managers

Where will you buy?

• I’ve always known my ideal spot

• I’m really not sure

• Spend a week or two in different areas

• Make a list of pros and cons; compare

• Ask locals what it’s like

• Ask other vacation homeowners what it’s like

Is this the right home for you?

• Is the home conveniently located?

• How far to big attractions and public transportation?

• What are crime rates like?

• Does it have a yard? A deck? A garage?

• How does it stack up against other homes in the area?

• Will you have to make changes or upgrades? 

• Can you afford to do that?

• Will it be rentable?

Are there natural hazards or events you need to understand?

• Earthquakes

• Mudslides

• Hurricanes

• Tornadoes

• Hail

• Snow

• Floods

How much time will you spend there?

• Consider tax laws

• Factor in to-and-fro travel expenses

What's your exit strategy?

• I want to retire in the home

• I need to figure that out

• After its value has increased by $_______

• After I’ve owned it ___ years

• After I’ve paid off ____% of the mortgage