Everything You Need to Know When Buying a Cabin

by Paisley Hansen 

It’s easy to get a little stir-crazy when you spend a lot of time in the same spot. Though your full-time home is certainly held dear, a change of scenery once in a while is a valuable, rewarding adventure for the whole family. Rather than plan multiple vacations to be taken during the year, you and your family could be spending that time in a vacation home that you call your own. A vacation home isn’t just reserved for the super-wealthy, and owning a second residence may be much more attainable than previously thought. Before taking the plunge, however, there are a few things to consider when looking at and considering vacation properties.

Assess Your Finances

Since you’ll be paying two mortgages, it’s necessary to have a thorough knowledge of your financial situation. Crunch some numbers and determine how much house you can afford before you start looking at listings, and beware of possible sticker shock when you first get started. There are certain things to consider when financing a vacation home, too. Mortgage requirements tend to be a little stricter, but you could still qualify for a VA home loan, a conventional home loan, or other forms of financial assistance. It’s worth looking into or speaking with a qualified lender regardless of your financial situation.

Consider the Location

Though you may favor one location during the winter months, it could be a completely different experience when the temperatures start to rise. The experience of homeownership is greatly affected by the area, from weather and climate to tourism and proximity to towns and cities. It’s important to find a home in a place you love, but it’s equally as important to find a home in a location that provides an experience you will love year-round. A vacation home that proves difficult to travel to for long weekends or shorter trips may make it less worth the investment in the long run. Consider the pros and cons of potential locations and make an informed decision backed both by personal preferences and adequate research.

Determine Its Purpose

Do you want to rent your home to short-term vacationers while you’re away? Are you looking for a second residence? The reason for your vacation home will affect your taxes and financial forecast. Investment properties have different tax rates than second residences, which are usually treated the same as primary homes. As well, mortgage rates differ depending on property use. Lenders require a greater down payment for investment or rental properties, as well as second residences. If you intend on turning your vacation home into your primary residence, rates are no different than typical homeowner guidelines.

Review the Costs

In addition to your mortgage, there are several other costs associated with owning a vacation home. Though you may not be spending all of your time there, the electricity, internet, gas, and other utility bills are likely monthly expenses on top of the building and land itself. Some vacation homes also have HOA fees, so look into all associated costs before closing to ensure you’ve budgeted adequately. You will also need to consider the cost of travel to and from your vacation home, as well as funding your entertainment and food options while there. These costs may even vary seasonally.

Start Looking

As soon as you’ve done the math and planned your vision, it’s time to start speaking with lenders and real estate agents. Many vacation homes exist in areas where specialized lenders and agents practice, so be sure to look locally to ensure you work with someone acquainted with local regulations and rules.

A vacation home can upgrade your quality of life by providing a sure, guaranteed place to take respite when the mood strikes. Memories made with friends and family can even double with another place to house meaningful experiences and quality time. With careful consideration and planning, you can be on your way to kicking back and relaxing in a second home in no time.

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