If you have been considering purchasing a vacation home, you may be uncertain of whether or not you are making a wise investment. Here are a few things to consider when purchasing a beachfront vacation home that you also plan to use as a rental property:
The vacation home will unlikely be suitable as your main source of income.
Although a vacation home can offer investment income if you use the property as a rental when it is not occupied by your family, the amount of money realized from the rental income can vacillate. This is especially true during off-season months. A beachfront property usually has the greatest level of occupancy during spring and summer months when it is warm enough to enjoy the water.
You may need a higher down payment for your vacation home than you would for a primary residence.
Because the home is considered a secondary property or investment home, the bank may require a larger down payment. In addition, your debt-to-income ratio may need to be lower than what it would need to be for a primary residence.
Consider the additional cost of a property manager.
If you do plan to rent out your beachfront home, you will likely need a property manager to ensure that the home is properly maintained while you are away. This maintenance can include making appropriate repairs and preparing the home for the next rental client. Additionally, there may be property upkeep needed for the grounds of the home. Nevertheless, some beachfront vacation homes are located in areas that include property maintenance through a standard homeowner's association fee.
Keep in mind that a home on the beach may need to be repainted more frequently than a house that is in a standard residential area. In addition, removal of sand from the living space can make property cleanup a bit more expensive.
Consider the number of bedrooms.
If you are thinking of renting out your new vacation property, you need to consider more than the number of beds that will accommodate your immediate family. People often like to rent large beachfront homes as a group. It is best to maximize the amount of sleeping space within your vacation home. If a vacation home only has one or two bedrooms, it will generally not generate the level of rental income of a vacation home that is able to sleep 10 to 12 people.
Think of the amenities that will make your vacation home more desirable.
Amenities, such as an in-ground pool, even for a beachfront property, can make a rental property more desirable to potential guests.
If you are considering a beachfront vacation home, schedule an appointment with a realtor to help you find the perfect property. To learn more, contact a company like Liv Nantucket.