Tips to Remember When Investing on Your First High-End Vacation Home
Maybe you have discovered a new place to hide away for the summer or winter. Perhaps you are already picturing a day well spent at some gorgeous seaside property or hiking on a trail that’s just a stone’s throw away from the luxury cabin you have been eyeing.
It might be tempting to just jump at the first attractive deal you find, especially if you are a first-time vacation home buyer, but you must contain yourself and conduct due diligence first before putting your hard-earned money into it.
High-end properties are large investments that require a major level of commitment and responsibility, so buying one is not a decision that must be taken lightly. How can you make the most out of your investment?
Tips to remember before buying your first high-end vacation home
Are you ready to go after your dream luxury real estate property? Here are some tips to remember before taking the plunge and splurging on your dream vacation home, most especially if you are a first-time buyer.
1. Do a deep search beyond online sources
Have you been doing all your primary research for vacation home listings online? There’s a chance that you’re missing out on some of the best luxury homes available in your chosen area if you are solely relying on easily visible search engine results that come up. Many high-end vacation homes are unlisted to protect the seller’s privacy, and getting in touch with brokers who have personal connections would give you more options so you could make the best choice.
2. Your agent must be a local expert
Working with a real estate agent who knows the locality you are looking at will make you more confident in deciding which property to go for. They will know the best spots that match your wants and needs, and not just visually. Agents who know the lay of the land will be able to tell you things beyond the aesthetics, such as exclusive attractions, facilities, or features in the locality that will enhance your vacationing experience.
3. Do a thorough ocular inspection of the home’s surrounding areas
It should go without saying that you need to inspect your prospective luxury property, but make sure you do not forget to survey the immediate vicinity to ensure that the area surrounding is as lovely as advertised.
4. Know how the area fares on different seasons of the year
Perhaps the secluded vacation cabin of your dreams that features lovely hiking trails nearby is a problematic choice because roads become unnavigable during the rainy season. Your sweet beachfront retreat might be gorgeous and picturesque in the summer, but the water gets too high during rainy months that it ends up flooding the house.
Information you come across regarding the area’s weather conditions all year round will not be as accurate as you want it to be. It is highly advisable to visit the place several times, for every season of the year, if possible, before making a decision.
5. Your vacation property would ideally make a good rental
Your vacation home can be an additional income source when not in use, so make sure that the property and its surrounding areas offer favorable conditions for vacationers. Consider this when deciding on the site—will they have access to health facilities or shops for replenishing supplies? Plan your home’s features and ensure that it can accommodate future visitors’ needs.
6. Stay within your budget
It could be easy to get carried away and unnecessarily splurge when you get excited about buying your vacation home for the very first time. This is why it is essential that you regularly check yourself while in the process and ultimately decide to buy only what you can afford.
Once you have chosen a property to invest in, make sure you can afford to pay off the mortgage if you cannot pay in full. Figure out how much you truly make in income and what you will owe the financial institution of your choice so that you know the amount they can lend you.
Banks have strict requirements on all applicants, with down payments going up to 20% of properties’ total selling prices. Inquire about the specific details so that you can project your expenses accordingly.
7. Consider the extra costs of owning and maintaining your vacation home
Aside from the mortgage, you have to factor in various processing and legal fees, taxes, insurance costs, and the upkeep of your property.
Vacation houses by the beach are vulnerable to abrasive sand, sea salt, or strong winds. Luxury cabins in mountainous or forested areas face the threat of forest fires in hot months or large animals wreaking havoc.
Maybe you need a property manager or groundskeeper to care for your vacation home, especially if you live far away and do not get to visit regularly. That added cost that will keep your home in top shape for longer so that damage and repairs will be kept to a minimum as much as possible.
8. Document every financial transaction in the process of buying your home
Financial documentation is imperative at every stage of your buying journey so that you have proof for whatever issue may arise when dealing with banks or other lending institutions.
9. Be in the know about future construction plans around the area
If you are looking into more populated areas, ask around about future developments planned within the vicinity. This might make or break your decision, so it is always worth looking into.
10. Negotiate before making a final offer
If you are set on a specific kind of view or type of structure but the price isn’t right, communicate this concern with your broker. He/she can then search for comparable options that have just been sold at better rates, so you can use this as a jump-off point before making your final offer.
Daydream no more: Your future vacation home awaits
Doing thorough research, working with local experts who know the area you want to settle in, taking time to explore your options, and noting down all costs involved in buying your vacation home ensures that you get the most out of your luxury property investment.
Marla Mendoza is the Marketing Manager of Filigree. She has been handling the marketing and communication initiatives for the high-end brand of Filinvest Alabang Inc. Prior to managing the brand, she was in charge of focused residential and township developments. Marla has been in the marketing industry for over 10 years both in the hospitality and real estate industry.