You’re sunburned. You ate too much. Drank too much. It was an exhausting 7-day vacation. And you can’t wait to do it again next year. But why make it a once-a-year trip that leaves you with just memories? You could have that dream vacation spot and potentially turn it into a money maker, too. Join the growing trend of purchasing a vacation home and turning it into a source of income. With one purchase, you’ll have the dream vacation home you’ve always wanted to use whenever you wish and a nice way to pay for future vacations!
Vacation rentals are a source of fun—and income
Purchasing a vacation home can be a win-win. First, you’ll have a weekend (or week-long) getaway anytime you like. Second, when you’re not there you can turn that home into a vacation rental and could see some significant income from it. Whether it’s a single-family home, a cabin or a Condo Hotel, your perfect vacation home can really pay off.
How often you rent is up to you
You’ve seen all the popular online vacation rental sites with thousands of listings available. But just how often can you expect to rent your place out? That’s the great part: it’s completely up to you. If you use the home two weeks out of the year, you can rent it out the other 50. Or 30. Or just a couple weekends a year to help pay the mortgage. The flexibility is all yours.
Enjoy hot spots like Miami Beach and Pigeon Forge. Wait. Pigeon Forge?
Don’t think the home you have in mind has to be on the coast or in the heart of a big city. Some of the spots that are trending for vacation rentals are in towns like Sevierville and Pigeon Forge, Tennessee or Fort Walton Beach, Florida.1 Popular, smaller markets like this allow you to make less of an investment in a home and still see income when renting it out.
When should you buy? If you’re going to dive into the vacation home market, an ideal time to do so is in the fall when prices for “summer” homes drop. Remember, a smaller initial investment means a tidier profit each time you rent the unit out.
How to buy
First, make sure you get a local real estate agent. They’re the experts in the area and can give you all the inside info that you might not be aware of—hot neighborhoods, hidden gems and more.
Buying an investment home will mean you’ll have to have a conventional mortgage. Now, that could be a 30-year fixed if you plan to make this your permanent home when you retire, or an ARM if you plan to rent it out for a few years and then move on. Regardless of how you go, down payment options could start at 10%.
How can you get that down payment? There are several options. First, if you have the cash, that’s easy. But if not, you can use the equity in your existing home with a cash-out refinance or a home equity line (HELOC). Plus, you could get a renovation loan when you get the second mortgage that can help you turn an okay home into the perfect getaway.
If a vacation investment home sounds like the ideal situation for you, we can help you get there.
By Mark Weiher on 6/21/2019
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