Ep. 148 – Dreams and Dollars: Navigating a Vacation/Rental Home Purchase
As we dive into the summer vacation season, a frequently asked question arises: should I buy a vacation home or rental property?
I share personal insights and experiences from when my family purchased a vacation home in Traverse City, Michigan, diving into the various considerations and decisions involved in such a significant financial commitment.
Here are some key takeaways to consider
Understand the purpose: investment property vs. future retirement home
Factor in costs: property management fees, higher taxes, maintenance/repairs
Rental income may not cover all expenses, especially for a future retirement home
Limits ability to travel elsewhere if frequently using the vacation home
I hope this episode provides helpful guidance as you navigate the complexities of owning a second home. Learn what factors you should weigh before taking the plunge into vacation home ownership.
ADDITIONAL RESOURCES YOU MAY LIKE
1 Big Idea to Think About
Understanding the primary purpose behind buying a vacation home is crucial. Whether it's intended as an investment property or a future retirement home will significantly impact financial decisions and personal commitments.
1 Way You Can Apply This
When considering a vacation home, create a detailed financial plan that includes potential costs, income from rentals, and the long-term goals for the property. This plan should factor in property management fees, taxes, maintenance, and any other unexpected expenses.
1 Question to Ask
What is the primary purpose of buying this vacation home? Is it primarily an investment, or is it a place I envision living in during retirement?
Key Moments From the Show
[00:00:02] - Introduction and personal anecdote about vacationing in Traverse City.
[00:01:24] - Decision process of considering a second home.
[00:02:19] - Missing out on the first property and finding a better one.
[00:03:38] - Difference between investment properties and personal use properties.
[00:04:49] - Challenges and considerations of property management.
[00:06:09] - Commitment to using the vacation home and impact on other travel plans.
[00:07:04] - Breakdown of costs: property management, taxes, and maintenance.
[00:10:27] - Emphasis on understanding the purpose behind buying a vacation home.
[00:11:43] - Closing remarks and offer for further assistance.
Resources Featured in This Episode:
Vacation Real Estate You Can Understand
HGTV Host Provides Insights on How to Make a Second Home a Reality