Buying your own home is one of the most significant investments you’ll ever make and one of the most challenging tasks you’ll ever undertake. You’ll know from experience the things that go into buying a house – home loan, EMIs, maintenance, amongst others.
Therefore, purchasing another house can be an even bigger decision than the previous one and must not be rushed through. Most people invest in a vacation home to satisfy their innermost desire of owning a ‘home away from home’. While for others, it may be a financial rite of passage or just the thrill of owning multiple properties.
So, whatever your reason may be, it’s important to note that there’ll be even more things to consider the second time around. To help you, here’s a list of 5 essential things you must factor-in before getting yourself a vacation home.
Location is perhaps the most crucial factor when it comes to purchasing a vacation home. You’ll want to make sure that the area is such that it can be enjoyed for a long time. A good practice, therefore, is to get familiar with the place first. You would also need to assess its accessibility to hospitals, convenience stores, and other essential sites. Lastly, consider locations frequently visited by people and aren’t in the middle of nowhere.
Go for a local real estate agent
Say you have already decided on a location. In that case, you should consider employing a local real estate agent, as purchasing a vacation home in an area that you know little about can get a bit tricky. Therefore, hiring a local dealer who knows about the place can help you understand the peculiarities of the real estate market, and subsequently, help you land a good deal.
Moreover, the local agent can also introduce you to the regional lenders who provide affordable loans with competitive home loan interest rates.
Hunt for suitable mortgage deals
Don’t look for the same terms that your lender offered you on the current home. The real estate market is continually changing, so it’s better to search for deals that favour your needs and your pocket. Don’t forget to check your home loan eligibility beforehand, if you’re already paying the instalments on a previous loan.
Plan for additional expenses
Apart from the traditional home loan EMIs, other expenses like insurance costs and maintenance must not be ignored while planning your financials. As a rule of thumb, set aside a minimum of 2% of the property’s value for maintenance every year. Insurance can be a bit on the expensive side in specific locations. Therefore, acquire several insurance quotes before finalising.
Evaluate your long-term goals
You need to be very practical about the kind of vacation home that ideally fulfils all your needs. Therefore, the first step would be to analyse what you want. If what you need is a retirement home, you might need to assess the property’s accessibility – how reachable the house is in terms of connectivity and how accessible the health care services are. But, if you’re looking for a weekend gateway, make sure it’s within a day’s drive from your primary place of residence.
In terms of financial goals, make sure you plan out the nuances beforehand. For instance, if you’ve opted for a housing loan, then you could plan your instalments by using a home loan EMI calculator.