First Home Facts

3 Things To Consider When Looking At Vacation Homes

In the past year alone, there were around 721,000 vacation homes sold in the US. Vacation homes can be very attractive to people who vacation in the same locale every year, who are looking for an investment property, or who are looking for a future home to move to after retirement. When looking at vacation homes it's important to keep a few different things in mind. When looking at the vacation home real estate market in a certain area, here are three things to consider.

Price And Inventory

The cost of a vacation home can vary widely from place to place. Homes found in popular vacation spots can command hundreds of thousands, if not millions, of dollars. It can also be difficult to find available homes for sale. Price and inventory are two things to consider very carefully when searching for vacation homes. A real estate agent that specializes in vacation properties can help. Potential homeowners should also carefully weigh the financial burden of owning a vacation home. Purchasing a vacation home can also require a jumbo loan in some instances. While lower down payments on these loans are now acceptable for qualified buyers, some lenders may still require up to 30 percent down.

Is Renting Possible?

Another thing to consider when looking at vacation homes is whether or not they are in a community that allows renting. After purchasing a vacation home, many owners decide to rent it out when they are not there in order to offset some of the cost of owning the home. While this can be lucrative in some areas, some communities do not allow it. This can be a major issue for homeowners who were planning on using rental income to pay part of their mortgage. It's also a good idea to research how much rental income will be taxed before making the purchase. 


When it comes to vacation homes, many buy simply for the view. Whether it's a home in the mountains, on a lake, or right next to the beach, vacation homes are most often found in beautiful locations. However, these locations can come with an increased chance of natural hazards. Beach homes in particular can be vulnerable to hurricanes. Flood or earthquake insurance may be required in some areas. Additional insurance is also needed when renting out a vacation home for part of the year. Rental dwelling policies can tack on an extra 25 percent to a vacation home's insurance bill.

When choosing a vacation home there are a few things that should be taken into consideration. The price and inventory will play a large role in whether or not it's even possible to find a home in the desired area. Rental income is a something that many look for when purchasing a vacation home so it's important to find a community where renting is not prohibited. Estimated insurance costs are also something that should be considered before purchasing.