Posted on May 28, 2013 Suzanne Evans
Purchasing a vacation home can be highly economical as you don’t need to bother about the exorbitant hotel bills, which are rising consistently. Further, you get the feel of home away from home with the rental being systematically stocked with all your preferred amenities, furnishings and necessities required for a comfortable stay. However, before you get too keen on buying your second home, you must consider the advantages of renting over buying to avoid ending up in a mess.
Advantages of purchasing
An exotic vacation experience can be intensified by getting to bask in the beauty of your favorite spot for a prolonged period at a fraction of the estimated expenses. Further, you are securing the availability of accommodation in your choicest tourist destination even in the peak season. You get to stay in the location that is strategically situated near your favorite spots and civic amenities. Your budget gets saved from going awry by having to spend inordinately on costly restaurant bills and hotel rooms. You concurrently have a property investment that will pay off fairly in the long run. The cost of purchasing can be counterbalanced by putting up the property on rent when you are not using it. A competent management company can be entrusted with advertising and renting your property to prospective visitors at a nominal cost. The company will be responsible for maintaining the property and attending to repairs while you stay away.
Advantages of renting
A property essentially is accompanied by numerous incidental costs like local and federal taxes, mortgage payments, insurance, and upkeep. You remain bound to these obligations year round and the situation gets worsened if the tourist influx or real estate market nosedives in the region. With renting, you can exercise a multitude of choices that can add flavor to your vacation. You get to shift your stay whenever and wherever you like and can visit newer destinations every year. You will not be required to spend an extra dime ever once your stay in the vacation rental home gets over.
Consider all contributing factors
Take a thorough look at your financial position and analyze whether the humongous impact on your budget can land you in instability. If you can afford the sizeable down payment and bear the recurring mortgage payments without letting your normal lifestyle affected in any manner, you can definitely go ahead with buying a home. Always keep in mind that the income generated from renting the vacation property will not be consistent and this cannot be used to see off the mortgage payment.
Chalk out a timeline within which you plan to dispose of the property in near future. You may get a raw deal if you decide to sell the home within a few years as the prospects of real estate market may get gloomy with an economic crisis.