You have worked hard all your life, and you are thinking about buying the vacation home of your dreams.
Although many people yearn to make this big step, most are concerned about the cost of owning a second property. Worry no more! Although the purchase might seem expensive at first, there are plenty of ways that you can make the cost more manageable. Heed these tips and rest easy come vacation time.
Save Money by Renting it Out
One of the easiest ways to save money on your vacation home is to offset the cost by renting it out to other vacationers while you are away. There are many questions that you need to ask yourself when thinking about whether the income earned from renting will be beneficial or if renting and owning will end up costing you more. Ask yourself questions like:
- How much would you charge for rent?
- Would that rental fee be comparable to other vacation homes in the area?
- Will you need to pay more in rent due to proximity to the ocean?
- Will you need to hire a property manager?
- When are the tourist seasons and will you be in the home during these times?
Once you have some answers to these questions, you can decide if renting is best and how to maximize your savings potential.
If you really want to maximize your profit, then rent out your vacation home during the peak rental periods. This means that if you have a house on the beach, rent it out during the summer and if you live on a ski resort, then offer it up during the winter months. The negative side is that you won’t be able to use it during these popular times, but your profits could be exponentially higher.
In any case, take the time to think about your rental rates. Research similar properties and be competitive with their rates. Also factor in how much will it cost for cleaning, management fees, pool cleaning, maintenance, and possible renovations. It is also a smart idea to buy a home warranty.
A Home Warranty Could Save You Thousands
Whether you rent or keep the vacation home to yourself, investing in a home warranty is a smart idea that can save you money if any of your appliances go haywire. Protecting your home should always be a number one priority, but it is especially important if you have renters or a system malfunction occurs during the times where you are not in the residence. A home warranty can also cover the wear and tear during the life of your products in your house.
Whereas homeowners insurance covers some items after an unforeseen disaster such as a fire or flooding, a home warranty can cover particular appliances if they break down due to no fault of your own. Let’s say you have a refrigerator that breaks down. Without a warranty, you could be looking at hundreds or even thousands of dollars to address it, whether you choose to just repair it or replace it completely. However, with a home warranty, a technician from the company will go to your house and inspect the unit. If that item is covered and the technician finds that it has an issue, the fridge could be replaced for free.
Whether it is you or your renters, you want to enjoy the home in comfort. If a water heater goes on the fritz or your furnace goes bad, you could be taking freezing cold showers and dealing with frozen pipes, neither of which is good for you or your home. In these cases, a home warranty could save you frustration and expensive repairs and keep your vacation home affordable.
A Home Base For Affordable Vacations
Make no mistake, buying a second house can be expensive, but now that you have a home base for your vacations, you can save money that would otherwise be spent on other trips. Of course, the biggest expense you are saving is the cost of a hotel room or other lodgings. The average hotel room can cost upwards of $137 a night, and if you are taking a two-week trip, the expenses could be through the roof. Instead, you can stay at your vacation home and sleep in your own bed!
When most people go on vacation, they are living out of their luggage, so if they are faced with a negative situation, their solutions are limited and could be expensive. If you soil your clothes, then you have to buy new ones or go to a laundromat. What if, instead, you could clean your clothes with your very own washer and dryer!
On a typical trip, if you forget to pack medication, a phone charger, or even your sunscreen, you will have to buy replacements. Imagine if you could already have all of this stuff at your vacation home. This could lead to major savings!
Think about how much you spend on food while you are on vacation. You may not realize it, but research shows that Americans spend between $27 and $35 on food each day that they are on vacation. This is another expense that can add up quickly, especially if you are vacationing with your family. When you have a vacation home, you can save money by simply going to the grocery store and cooking what you need on your stove.
Having a vacation home is a true luxury, but if you are smart about your purchasing decisions, then you can enjoy the splendor of this second residence without breaking the bank.