So you’re considering a vacation property – great! It takes a lot of time and a lot of hard work to reach the point at which you can afford a second home, especially one in a beautiful location that you want to spend holidays and vacations in.
If you’re in such a financial situation, you should consider every aspect of the decision you’re about to make. And that includes the long-term value of the property that you’re buying.
After all, a vacation property isn’t just a frivolous purchase. It’s an investment, a real estate purchase that could grow in value over time and even generate income that offsets (or, in some cases, even exceeds) its cost. Below, we’ll look at a few factors that determine the current and long-term value of your vacation property.
Location, Location, Location
When you look at vacation properties, one thing is going to matter to you more than anything: location!
Vacation properties are defined by their locations. Proximity to beaches, lakes, mountains, and other natural scenery can be a huge plus. Being near tourist attractions and activities like boat tours is huge, too. Privacy matters, and so does the driving (or walking) time to the nearest restaurants and bars.
The Real Estate Market
The essential things about your real estate property – its size, design, and the aforementioned location – will help determine its value down the road. But so will the fluctuations of the sometimes confusing real estate market.
The good news? The real estate market has been pretty healthy for years now. While we can’t predict the future, choosing a great home in a great location will give you the best possible chance of growing your investment’s value.
If you sell your vacation property years from now, you may make a profit. But you don’t necessarily have to wait until then (or even sell at all) to make some money off of your valuable space.
You may want to consider renting your property for short periods of the year. Depending on your situation, you may even be able to rent space on your property all year long and use that income to offset your expenses. Doing so can be a lot easier than you might think.
Start by using online tools to set up a rental listing and a free rental application. Decide if you’re going to become a true landlord or just rent your vacation property for weeks and months at a time, and use the appropriate online listing sites.
Don’t forget to check local laws and neighborhood association rules to make sure that you’re allowed to rent your property out. If you are able to, it could really offset your expenses and may even help you turn a profit.
Beyond Monetary Value
There are a lot of cold, hard financial reasons to invest in a vacation property. But it’s worth remembering that you’re not just looking at a way to make more money.
If that were the case, you might find that a real estate property in a big city might make more sense, or that you might be better off buying stocks. The reality here is that you’re looking for a sound investment that is more than an investment. It’s not just about value – it’s about what this space means to you.
You’ve worked hard to get here. You should be smart about this purchase, but remember that money is only as good as what it can buy. The value calculations you make are a way of determining what you can afford, but what you’re really trying to buy is a place that will bring you joy and wonderful memories with loved ones. That’s the real value of your vacation home, and you shouldn’t lose sight of that.