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Ask the Expert: What Should I Do Before Buying My Vacation Home

Question for the expert: My husband and I are considering buying a vacation in Northern Michigan. Is there anything we should think about as we begin the process?

Great question! We’re excited to tackle this issue today. It seems like now that summer is in full swing, many of us are longing for vacation homes. It’s nice to think about escaping from our normal routines on the weekend, isn’t it? Especially since Michigan offers such a wide variety of summer activity.

We’re all for helping you buy your dream vacation home, but before you do, we hope you’ll check out this article. Today we’re sharing our favorite tips on how to buy your vacation home the right way.

Tips for Buying Your Vacation home

Do the math first

It’s important that you sit down with your partner and do the math first. Consider both big and little expenses when deciding how much money you can afford on a vacation home. Below are some necessary expenses that you should figure in…

  • current mortgage
  • current cost of living
  • cost of gas to and from vacation home x how many trips you intend taking
  • estimated mortgage of vacation home
  • estimated utility and water expenses of vacation home
  • insurance cost

Buy conservatively

Because the future is hard to predict, we always recommend that you buy conservatively for your vacation home. This will allow you some leeway in case any financial problems should arise in the future. Plus, having a lower price range will also mean less stress and worry as you add these extra payments into your monthly expenses.

Location, location, location

Make sure that you focus on the location of your home. Because this is your getaway, you want to make sure that you are truly at peace in your environment. It’s a good idea to rent a home in or near the area where you are considering purchasing your vacation home. This will give you a better idea of what the vacation experience will be like for you and your family.

Think big picture

Consider the big picture of owning a second home. All of the little details will add up in the long run. Consider:

  • What happens if something happens on the property while you are away?
  • Do you have enough money saved to cover the costs of vacation home repairs and renovations?
  • How many years do you see yourself vacationing in this area?
  • Is this an investment for just yourself or for your family as well?

By fully understanding your dream of having a vacation home with the realities of owning a second home, you can begin to decide what does and doesn’t matter in the vacation home buying experience.

Talk with your accountant first

It’s a good idea to speak with your accountant before you purchase your vacation home. They will be able to describe how the taxing of your second home will work. Depending on what you intend to do with your vacation home (private use only or rent it out), there may be different tax payments that you will be responsible for. It’s always a good idea to know what you’re getting into first! Call your accountant and get their opinion on your situation.

We really hope that this advice was helpful for you. We absolutely love taking your questions! Buying a vacation can be exciting, but a little overwhelming, too. If you have any more questions, we hope you’ll reach out to us today.

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