How Owning a Vacation Home Can Be Affordable

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The cost of homes in major metropolitan areas is so high that some aspiring home buyers are considering home-buying an unattainable goal. In Manhattan, New York, for instance, the average price of a home is $1.2 million. On the other hand, the cost of a vacation home can be as low as $100k. You can buy a vacation home either as your primary residence or second home. But how do you afford one?

Choose an Affordable Area

If you are choosing a vacation home as a second home, you can buy it almost anywhere you want as you will only use it once in a while. If you use your vacation home once in a year, buying it a few states away from where you live can be a great option as you do not spend much when you travel once a year. Realtor notes that there are stunning vacation homes that cost less than $100k in different places.

In Iosco County, Michigan, homes will cost as affordable as $105k, depending on the nature of the home and so many other factors. There are other affordable areas including Park County, Colorado; Warren County, Pennsylvania; Roscommon County, Michigan; Marinette County, Wisconsin; and Koochiching County, Minnesota among others.

There is a vacation home to meet your budget somewhere, and all you have to do is take your time to search.

Rent Out Your Vacation Home

Financing your vacation home is a challenge for most people unless you have enough finances to pay cash upfront. Again, paying for taxes is another burden that makes your vacation home more expensive. You need to consider how you use your vacation well to ensure you do not end up with a cost you cannot afford.

You can buy the home as a primary residence if your workplace is not far from the home. Instead of buying a home in the expensive metropolitan areas, choose to stay in a vacation home. When you do that, you will enjoy significant homeowner’s tax benefits.

You can also use it as a second home to use once in a while. You can buy the home at 20 percent down. You will only use this home once in a while, but the lender will not allow you to rent out the home. The mortgage rates for a second home and the tax benefits are the same as taking a vacation home as a primary residence.

Lastly, you can take your vacation home as an investment property. If, for instance, you take new homes in Myrtle Beach and you only plan on using the home once a year, you can rent it out and make some money. Investment homes will cost more than second homes, and you need to make a down payment of at least 30 percent. However, in the long run, these homes are more affordable. You will pay more tax, but the extra income will help you afford the home. Unlike for a first and second home, an investment home needs to be in a location that attracts people who want to rent vacation home space.

Reduce the Total Costs of Owning a Vacation Home

Once you buy a vacation home, you start meeting the costs of running the home. The costs can be high depending on where the home is and what you do while there. When calculating the cost of running the vacation home, calculate the cost of running your current residence too. You will need to consider costs such as:

• Gas

• Electricity

• Internet

• Cable TV

• Furniture

• Houseware

• Travel costs to the home

• Property maintenance

• Taxes

You can cut down the costs on some of these expenses such as furniture and houseware by buying only what you can afford. You also do not need to pay for cable TV and Internet subscriptions for a vacation home. The more you save from the monthly expenses, the more affordable your vacation home becomes.

Conclusion

A vacation home can be a great addition to your list of properties, but if you are not keen, the home can cost you a lot of money. When shopping. Look for ways to save on the purchase price and the monthly expenses. Take your time to shop, and talk to a professional real estate agent to get the vacation home you will be proud of.