Vacation Homes: The 3 Biggest Mistakes People Make When Choosing One (Yes, I Mean You)

Many people reach that point in their lives where they are reasonably stable in their personal and professional lives, have started a family, and want to enjoy their free time accordingly. You have a steady job, and so does your spouse. Your children are at an age where they can start to share some of your leisure activities, and maybe even enjoy themselves while mom and dad do something else. This is when you start thinking about a vacation home, perhaps in or near an area that offers many of the activities you and your family enjoy. However, you start to have doubts. Can I afford it? Will it be safe if it is not busy for long periods of time? Will we all have enough fun in that area to want to keep coming back? All valid questions. By keeping in mind the 3 most common mistakes people make when buying a vacation home, you can avoid most of them. keep reading

Mistake #1 – Buying at retail

If you’ve been following the news since 2008, you’re aware of the foreclosure crisis and the myriad of foreclosures, short sales, and abandoned properties it has created across the country. So why would you pay market price for a property when with minimal effort you can get a similar home for a fraction of the price?

What to do instead: Use online resources to search for foreclosures, real estate auctions, bank listings, and similar opportunities in the area you’re considering. You will be surprised at the amount of information you can easily find online and the prices you will see properties sell for when they are in jeopardy for whatever reason. This does not mean that the property is run-down (in disrepair), although you will want to check. It means that the owners, or former owners, couldn’t keep up with the payments and are about to lose the property or, at this point, the bank has repossessed it. Banks are not in the business of owning property, they are in the business of lending money and making a profit on the interest charged. When that doesn’t happen, they will accept offers that you may consider ridiculously low, as long as they take the property off their books and recoup some or all of the money that was lent. Keep in mind that a bank may have made tens of thousands of dollars on a loan, even if the loan amount is still close to what it was 10 years ago. They won’t really lose money if they accept a low offer, even if it looks like they did on paper. Talk to someone local who specializes in distressed property. They can be invaluable partners when you’re shopping.

Mistake #2 – Thinking that only you can use the property

So you followed the above suggestions and are now the proud owner of a vacation home. His employer gives him 3 weeks vacation a year, and occasionally there is a 3-day weekend or similar time off where he can go and enjoy his property. So you let it sit empty the other 40 weeks of the year, right? Wrong!

What to do instead: If you enjoy vacationing in that area, chances are many other people will too. In fact, depending on the area, at certain times of the year you will find that local hotels and rentals are fully booked. So why not take advantage of this? You can easily rent a property by the week for the equivalent of a month’s rent. What this means in practical terms for you, if you play your cards right, is that you get a vacation home for yourself and someone else makes the payments. What is there not to like there? As with the first bug, it’s vital that you have someone local who can manage the property for you and take care of any issues that arise. Find a good partner!

Mistake #3 – Thinking you only want 1 vacation home

So you have a vacation home and that’s it, right? Mission accomplished? Why stop at one?

What to do instead: If you’ve been paying attention, you must have realized by now that with what we’ve covered so far, you can easily and quickly do this over and over again. Find a distressed property in another area you like, own it, use it when you can, and rent the rest of the time. Be sure to choose an area where it is easy and cost-effective to rent out by the week to vacationers, and always partner with a local who can find the property for you and manage it afterwards. You will find that at some point these houses will be paid for in full, more quickly if you bought them as explained above, and the rent money now goes into your pocket instead of paying down a loan. Not only do you have vacation homes in many great areas, but you also get paid to own them.

We hope we have given you something to think about. One of the areas that we can recommend to do this, if you are in the northeastern part of the United States or like to travel there, is the Poconos Mountains region of northeastern Pennsylvania. You’ll find year-round activities for just about everyone, skiing, hiking, swimming, fishing, hunting, general outdoor activities, NASCAR racing and much more. And, of course, a large inventory of distressed properties with banks eager to get buyers under any conditions.