Call Us: 855-510-7653 

4 Things to Consider When Buying a Vacation Home

4 Things to Consider When Buying a Vacation HomeBuying a vacation home is becoming more popular with many homeowners. According to a recent Vacation Home Buyers Survey from the National Association of Realtors (NAR), vacation home sales rose nearly 30% last year compared to the previous year and accounted for 13% of all real estate transactions in 2013.

Vacation homes allow couples and families to take vacation in their very own “home away from home.” A second home can be rented out for additional income or it may be used as a place to retire in the future.

Whatever the reasons, there are a few things to consider before you buy a vacation home:

1. Best Time to Buy Vacation Home

Many vacation homes in New England typically go on the market in the fall, after the summer season ends. Work with an experienced real estate agent so they can find vacation homes that match your price range and criteria as soon as they go on the market.

Of course the best time to buy a vacation home is when you’re financially ready and have weighed all the pros and cons. It’s not uncommon for vacation home buyers to put 30% down or even pay cash for homes so they don’t carry a second mortgage. Financing terms for vacation homes can often be more stringent than for primary residences so check with a mortgage broker to find the best interest rates and loan option that will work for you.

2. How Buying a Vacation Home Affects Your Taxes

You have to ask yourself if this home is going to be your vacation property, or an investment property. If you rent it out more than 14 days in the year, the rental income must be reported to the Internal Revenue Service and you’ll be taxed on it.

If you’re not renting the home, just as with a primary residence you can deduct the mortgage interest. Local and state taxes typically paid on a vacation home are also deductible.

Towns in the Cape and the Islands have high property values yet very low tax rates and thus have relatively low tax bills. This is because many of these properties are vacation properties so they don’t require taxes to pay for services and amenities off-season. For more info, view the tax rates in Massachusetts by town.

3. How to Choose an Ideal Location

Location is as important for buying a vacation home as it is when buying a primary residence. How do you enjoy vacation time? Would you love to live on a lakefront home, near the beach, or spend winters at your ski home?

Whichever one you choose, it’s a good idea to purchase a home that is easily accessible. If you have to drive more than two hours, you won’t enjoy the home as often. And if the home is far away it can be difficult to take care of repairs or maintenance. According to NAR Survey, the typical vacation property was within 100 miles of their primary residence and just 34% were more than 500 miles.

Be sure to get to know the area before purchasing the home. What is it like off-season? What are your neighbors like? Are the grocery stores and shops open year round? If you decide to sell the vacation home in the future, you want to make sure it will appeal to a wide range of buyers.

4. Factor in Other Costs

Purchase price alone is not the only cost to consider when buying a vacation home. Insurance, taxes, and general upkeep will all figure into the total cost.

It’s a good idea to make arrangements for someone to look after the property when you’re away. Ask around to see which property management service companies nearby property owners are using. While it may be an extra cost think of it as a good way of protecting your investment, especially during storms or when you’re gone for an extended period. If you decide to maintain the home yourself, there are ways to prepare the home for the winter months to protect it from damage from frozen pipes and ice dams.


The most important consideration when buying a vacation home is to make sure you take the time to enjoy it!




Forbes: Tax Tips to Consider When Buying A Vacation Property Vacation Home Sales Surge in 2013, Investment Property Declines

Planning To Sell Your Home And Want The Most Money?

Get a FREE copy of our Home Sellers book called,

“The Real Way to Sell Your Home for the Most Money”

In this book we explain all kinds of things like:

  • How to get your home ready to sell
  • Inexpensive things you can do to substantially increase your home’s value.
  • How to sell your home for the most money and close when YOU want to.