Five questions to consider
If you or your family would like to call a favorite travel destination “home,” you might consider purchasing a vacation property. While this is an exciting milestone, there are some things to think through first and your trusted financial professional can help you answer critical questions.
Q1: How will I use the home?
Think about how often the home will be used, and by whom. Will you be renting it out? 600,000 Americans use online marketplaces to rent out their property to vacationers.(1)
Can loved ones come and stay when you’re not there? Or will it only be occupied a few weeks out of the year?
Q2: Am I rushing this decision?
When are you making the decision to buy a second home? Is it right after a trip to a relaxing destination? Or have you been considering this for awhile?
A second home is a large expense, so best not to be impulsive in making your decision.
One tip is to travel to your desired location during each season to get a better feel for what it’s like year-round.
Q3: Am I rushing this decision?
Aside from the cost of the house, you’ll need to prepare to pay the ongoing costs associated with owning a second home. These include insurance, property taxes, and maintenance, as well as potentially property manager, HOA, and/or amenities fees.
Q4: Have I calculated the costs?
If you plan on renting out your vacation home, research local laws and guidelines. Some places cap the number of days a home can be rented out or carry restrictions on renting to vacationers.
Q5: What will I do in an emergency?
In some instances, an emergency might be a broken water heater or an electrical problem. In other instances, it may be more severe – say, a natural disaster.
What’s your plan? Would your home be within driving distance, or will you hire someone to check on it periodically and be available as needed?
Big financial decisions often extend beyond one moment or one goal. Thoughtful planning can help support long‑term financial wellness and provide confidence as new opportunities arise.
Citations.
1. iPropertyManagement.com, July 2022
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.