Tired of paying the steep costs of hotel, cottage, or condo rentals for vacation stays? Think you’ve found the location of your dreams? Are you able to handle a second mortgage payment? Want an investment that includes a mortgage interest tax deduction? If your answer to these queries is yes, then you may well be ready to purchase a Jersey Shore vacation home.
Increased home availability, lower prices, greatly reduced interest rates, and probable “end of the season” bargains make this an excellent time for you to explore adding a second home to your real estate holdings. Add to that the opportunities to make a safe long-term investment, defray mortgage costs by offering short-term rentals, and ensure a yearly getaway spot that’s sure to please, and you have a long list of reasons to explore the possibility of owning and enjoying a vacation home.
As with any large purchase or major decision, there are, of course, many factors which must be considered. Items to think about include the following:
- Expenses: Be aware that, unlike the mortgage on your Jersey Shore real estate, you will need at least a 15% down payment. Know, too, that in addition to your regular monthly mortgage cost, you will also have to factor in expenses for insurance (perhaps even required flood insurance), furniture, utilities, condo, club, or community fees, taxes, property management fees, travel costs, and maintenance expenses.
- Frequency of use: If you will be occupying the property only for a few weeks each year, is it really worth it to buy rather than rent? Is this the place in which you’ll want to vacation every year?
- Tax ramifications: owning a second property, especially if you gain rental income from it, will affect your tax situation in some way. Consult your accountant for advise to avoid surprises in April.
- Location: Have you spent much time in the area you have chosen? Is it near enough to your current home to make traveling back and forth reasonable in terms of time and expense? Be sure to visit the community often and at different times of the year before deciding that this is the place for you. Talk to neighbors, consider your privacy needs, look for a level lot and landscaping, assess your need for a view and/or amenities.
- Retirement plans: If you are planning to retire to this home in the future, be aware that your interests and physical abilities may change in the interim. Think about the home‘s layout and accessibility (especially stairs), weather-related restrictions and ramifications, and your physical condition and limitations at that time (arthritis, anyone?). Be realistic. Will lounging at the beach still be part of your lifestyle?
- Renting the property: If you plan on renting your house when you’re not using it, who will clean it between guests? Just as you must do preventive maintenance on your current home, your vacation property will require the same care. Will you hire a property management service? Check with your tax advisor about how much of the upkeep and management expenses are deductible.
If, after due consideration and realistic planning, you just know a vacation home is for you, then go for it! Be ready to purchase the perfect vacation home when you find it –and enjoy it to the fullest!