When you first begin investigating vacation homes, you will likely have many important questions. From the location of your new home to the type of structure that you will be purchasing, you may wonder what the best options are for you and your family when buying a second home. Learn more about the steps you should take to go about finding the perfect vacation home that is just right for you.
The First Step: General Questions to Consider about Vacation Homes
When buying a second home, you first need to decide what sort of setting you are seeking. For example, do you want to look at vacation homes that are near the beach, where you can swim and go boating? Or do you want to focus on vacation homes that are near the mountains, where you can go for hikes or ski in the winter? Or do you perhaps want access to both types of settings?
Next, you can narrow down the best location for your new home by establishing whether this residence will only be used for weekends, whether it will be used for longer stretches of the year, or whether you plan on transitioning it into your primary residence within a particular period of time. If you are only buying a second home to be used for weekends, you may want to limit your search to vacation homes within driving distance from your primary home to minimize travel time and maximize your mini-vacation. However, if you are buying a second home that will be used three, four, or six months out of the year, you may only need to travel once or twice, to and from the home and therefore the proximity to your primary residence is less of an issue.
Then you should consider who is going to be using your home. Are you buying a second home just for yourself? For a couple? Will parents, children or grandchildren be visiting? Will it be used to entertain corporate guests? Each of these will dictate the type of vacation homes that fit your needs. For example, if you are going to have children at the home every time it is used, then you will probably want to find a community or vacation homes that are family friendly with lots of activities for children – and lots of children around for socializing. If, instead, you are planning to entertain corporate guests, you may want to look into buying a second home within a community that is more formal – one with more entertainment options that may require you to wear a coat and tie to dinner. Carefully research all vacation homes and all communities to make sure that they will be appropriate for your situation.
The Second Step: More Specific Decisions to Be Made When Buying a Second Home
Now that you have determined the general scope for your new home, you can start to drill down and make more specific decisions. Do you want a turnkey product or have you been dreaming of designing the perfect getaway? Do you want to research vacation homes in a gated community or do you want a home that is simply in a general area or a local community? If you are buying a second home within a general area, you will likely have the opportunity for more land and greater architectural control. On the other hand, a gated community can offer security, amenities, property maintenance and a closeness with your neighbors that you might not find elsewhere.
If you do decide to look at vacation homes within a gated community, you should look at the strength of the developer. Investigate the developer’s track record and the projects that have been completed to date. You can also look into the development’s lifecycle. If you are on a budget or are looking for a growth-oriented investment, it may be advantageous to consider buying a second home in a community at an early stage, when the price points are lower and there is a greater opportunity for property appreciation. Or, you may want to enjoy all of the amenities today and know exactly what you are buying. However, the peace of mind of buying a second home in an established community often comes at a premium.
You should next step back and look at the area as a whole to see how it will support your lifestyle. Is it important for you to live in a community that is close to a hospital or physician, either for urgent care or for regular visits? Would you like to find vacation homes that have access to shopping, dining, or entertainment centers? Or are you planning on buying a second home that will let you escape from the crowds to your own piece of heaven?
Also, look at the recreation opportunities available in the area or community. If you like to swim, does buying a second home in the area grant you access to a beach or to a private pool? If you enjoy golf, are there any clubs near the vacation homes in the area? What type of access is available — public, daily fee, or private — and what are the associated fees?
The Third Step: Determining the Type of Structure – and Beyond
It is also important to determine what type of structure you’ll want for your second home and what type of ownership you are looking for, whether it is fractional ownership, fee simple, a townhome, or a condo. Beyond the size and location of your home, you will need to consider how much work you will want to put into it. Are you considering buying a second home where you will want to do yard work and actively maintain the home or would you prefer to be spared the hassles of maintenance and have others take care of the house while you relax? Find out if the community in which you are thinking of buying a second home offers maintenance, and if so, at what cost.
If you plan on building a custom home, find out about the building process and the restrictions. Can you hire the builder of your choice, or must you use a builder from a preferred builder program? Also, what is the ARB (architectural review board) process like? While loose architectural guidelines may have some appeal during the building process, tighter, more uniformed guidelines that are consistently enforced provide the greatest protection to your investment. If the ARB will let you get away with it today, what will they let your new neighbor do tomorrow? An ARB can help with the resale value of your property in the future by maintaining a consistent look and feel among all of the vacation homes (and other buildings) in the development.
The Fourth Step: Thinking about Fees and Obligations Related to Vacation Homes
When you have narrowed down your choices, you can take into consideration the property owner’s association fees the vacation homes require. How much will they be, and what do they cover? Can they escalate, and if so, how much and how often? What is the exposure for assessments? Also, when buying a second home in a community, are you required to join any clubs? For example, your community may have a swim and tennis club with mandatory membership. If buyers do not join when purchasing their vacation homes, do they have an opportunity to purchase a membership later, and will there be additional fees? Is it possible to attach the memberships to the sale of your home or land?
Finally, if you are buying a second home as an investment and think you may want to rent your home out at any point in the future, find out if this will be allowed and what rules will govern the process. Ask around about the going rates for rentals of vacation homes, and find out if you have access to on-site management for your property.