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<\/a><\/p>\nIf you\u2019ve just had a wonderful family vacation at the beach or in a mountain cabin, you may be thinking how nice it would be to own your own vacation home.<\/p>\n
You\u2019d have all your own things right there. You wouldn\u2019t have a hassle with booking a rental for the days you want. And, in addition to taking your annual 2 week vacation, you could steal away for long week-ends throughout the year.<\/p>\n
It sounds ideal, but before you begin searching the Internet for vacation homes, stop and ask yourself two important questions.<\/p>\n
First, of course, is \u201cCan we afford it?\u201d<\/strong><\/p>\n The expense of a vacation home comes in two parts: The purchase and the upkeep. If you can answer \u201cyes\u201d to these 5 questions, you\u2019re good to go on the purchase end:<\/p>\n Question #5 is all-important. Specialists of commercial property management Chicagoland<\/a> believe no one should ever go into debt to buy vacation property.<\/p>\n It also a terrible idea to dip into retirement funds, especially if they\u2019re in an IRA.<\/p>\n Be aware that withdrawing funds before the agent of 59 \u00bd means you\u2019ll take a 10% penalty hit. Then you\u2019ll owe taxes to the IRS \u2013 and possibly to the state. What that means in real numbers is that if you withdraw $100,000 from your IRA you\u2019ll only receive about $70,000.<\/p>\n At the same time, you\u2019ll be forfeiting the compound interest on that account.<\/p>\n Sure, that vacation home will likely grow in value \u2013 but as we\u2019ve seen in recent years, that\u2019s not guaranteed, and even in the best of economies it will dependent upon how well you maintain the house during your ownership.<\/p>\n Now consider upkeep. <\/strong><\/p>\n You\u2019ll need to maintain that home just the way you maintain your primary home, and some of the expenses may be higher.<\/p>\n Homeowner\u2019s Insurance, for instance, costs more for a home that is virtually unoccupied. And, if you\u2019ve chosen a beach home, you\u2019ll probably be required to have flood insurance.<\/p>\n Property taxes may be higher because it isn\u2019t your primary residence.<\/p>\n Monthly expenses \u2013 Depending upon the kind of home you choose, you\u2019ll be responsible for utilities, internet\/cable TV, garbage service, HOA fees, or lawn maintenance. It\u2019s never good for a house to have utilities and heating\/cooling turned off for extended periods of time, so don\u2019t plan on just turning everything off while you\u2019re gone. (The exception would be your cabin in mountains with snowy\/cold winters \u2013 do pay to have the water system drained and winterized during the months it won\u2019t be in use.)<\/p>\n Property management<\/strong>. Yes, this is an added expense, but it will give you peace of mind to have someone keeping an eye on your property on a regular basis.<\/p>\n Yes \u2013 you can use your vacation home as a rental. However, if you do, you run the risk of it being destroyed by tenants. You also have to adhere to rules set down by the IRS. If this is your plan, be sure to talk seriously with your tax accountant before making the move. And finally \u2013 check with your REALTOR\u00ae to make sure that using your second home as a rental doesn\u2019t violate any subdivision or HOA regulations.<\/p>\n Second \u2013 \u201cDo we really want to be locked in to the same vacation spot for the foreseeable future?\u201d<\/strong><\/p>\n When you own your own vacation home and you\u2019re paying for it all year long, you\u2019re pretty well committed to returning to it each year. That might be fine for the first year or two, but after that some other destination might catch your eye, and you\u2019ll be sorry that you\u2019ve made such a commitment.<\/p>\n Consider renting someone else\u2019s vacation home.<\/strong> This is a short-term commitment that will cost you far less than owning your own. If you really love it, you can book ahead for the next year. If not, you can begin researching other destinations that might be even more fun.<\/p>\n You may have gasped when you read that a former President paid $7,000 per week for use of a vacation home in Hawaii. Many did. However, if you think about it, that\u2019s a drop in the bucket compared to owning such a home for a full year.<\/p>\n See related: Manuel Antonio Hotel Nestled in Costa Rica’s Rain Forest | Jungle Vista Inn<\/a>.<\/p>\n If you\u2019ve just had a wonderful family vacation at the beach or in a mountain cabin, you may be thinking how nice it would be to own your own vacation home. You\u2019d have all your own things right there. … Continue reading \n
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