- Be realistic with what you can afford. New mortgage lending regulations over the last couple years have gotten strict about borrower qualification and approval. You’ll need 20% down, and your total monthly payments on homes and cars combined cannot exceed 36% of your income. Additionally, don’t count on any potential rental income to help you pay for a second home.
- Plan for extra expenses. If your home away from home is FAR away from Edmond, Oklahoma (over an hour) you may need to consider using a property manager or caretaker. But having a local eye to watch over your vacation home is not the only potential expense you should plan for. Beach homes need to be painted as frequently as every two to three years because of sand, salt, and wind. Mountain homes may require yearly deck repairs. What hidden expenses should you plan for with your second home? Speak with a full time resident to find out what true costs you can expect.
- Avoid Timeshares. If timeshares really ever were such a great bargain, why are record numbers of people racing to sell theirs yet struggling even to get a showing? One of the largest scams in Real Estate today continues to be the (unlicensed) agent promising to sell your time share. In fact, he already has a buyer ready to go for you. All he asks is for you to pay a $1000 fee (much less than a Realtor’s commission, he’ll tell you), and once you pay the fee, Mr. Unlicensed Agent is never to be heard from again…
More vacation home buying tips next time.