Vacation Homes: The 3 Biggest Mistakes People Make When Choosing One (Yes, I’m Meaning 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 your spouse does too. Your children are at an age where they can begin 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 begin to have doubts. Can I afford it? Will it be safe if you are 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 considering the 3 most common mistakes people make when buying a vacation home, you can avoid most of them. keep reading

Mistake #1 – Buying retail

If you’ve been following the news since 2008, you’re aware of the foreclosure crisis and the slew of foreclosures, short sales, and abandoned properties this 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 holdings, and similar opportunities in the area you’re considering. You’ll be amazed at the amount of information you can easily find online and the prices you’ll see properties selling for when they’re in jeopardy for whatever reason. This does not mean that the property is deteriorated (in poor condition), although you will want to check. It means that the owners, or the former owners, were unable to keep up with the payments and are about to lose the property or, at this time, 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’ll accept what you may consider ridiculously low offers, as long as they get the property off their books and get back some or all of the money that was borrowed. 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 properties. They can be invaluable partners when you are shopping.

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

So you followed the suggestions above and you are now the proud owner of a vacation home. His employer gives him 3 weeks of vacation a year, and every now and then 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 your vacation in that area, chances are a lot of other people do too. In fact, depending on the area, at certain times of the year you’ll 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 one 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’s not to like there? As with the first mistake, it is vital that you have someone local who can manage the property for you and deal with 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 already figured out 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, buy it, use it when you can, and rent the rest of the time. Be sure to choose an area where it’s easy and profitable to rent by the week to vacationers, and always partner with a local who can find you the property and manage it afterwards. You’ll find that at some point these houses will pay for themselves, more quickly if you bought them as explained above, and the rent money now goes into your pocket instead of paying off 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 we can recommend for doing 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 anyone, skiing, hiking, swimming, fishing, hunting, general outdoor activities, NASCAR racing and much more. And, of course, a huge inventory of distressed properties with banks eager to find buyers under any conditions.