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What You Need to Consider When Buying a Vacation Home



If you are thinking about buying a vacation home, then there are many different factors that you will want to keep in mind. Knowing what things to think through before you make a purchase can lead to you finding the perfect home for your vacation that is a wise investment. If you don’t consider these factors beforehand, you may be disappointed in your new home.

Choosing a Location

One of the first factors to consider when looking for a vacation home is where it’s located. You may want to consider buying a home in the United States. This is often a great idea because you are already familiar with property laws. Alternatively, you may want to consider an international purchase as the exchange rate on your money may allow you to buy more home for the same money. Think about what you enjoy doing and buy a house near attractions where you will want to spend time. If you enjoy spending time there, then the chances are that others will enjoy the same activities, which may let you rent out your vacation home when you are not using it.

Your Budget

Buying a vacation home is not like buying your primary residence. Lenders often take more chances when loaning money for a primary residence than they do on vacation homes. Remember that cash is often king, so you may be able to get a great price when you can offer the seller all the money upfront.

There are still several financing options that may be available to you. You may be able to cash-out on your current mortgage and use the difference to buy a vacation home if you have equity in your current residence. You may also be able to get a home equity line of credit based on the value of your primary residence. If you have stellar credit, then you may be able to qualify for a loan for a vacation home. In many cases, you will need to be able to put 20% down on the vacation home. You may also want to consider financing the house with a group of friends, and you all agree on how much time and when you get to use the home.

Hire a Local Real Estate Agent

You need to work with a knowledgeable real estate agent in the area where you want to buy your vacation home. Be very careful that you work with an independent agent who knows the market. Some agents will try to guide you into one development because they are getting money on the side from that area’s developer. You need an agent who knows the area very well. Since you are hiring them to be your representative, make sure to interview at least three before making a final decision. If you are looking to buy an international vacation home, then find an agent who has made international purchases before because there are often unique papers that must be signed and specific steps that need completing.

Renting It Out

When you buy a vacation home, then you may want to rent it out when you are not there to use it. Before deciding on a home, think about what attracts people to that area and what features they will look for in a place to stay. Before listing it for availability, you need to prepare your vacation home for rent in order to better appeal to potential renters. For example, if you are thinking about buying a ski chalet, then a large number of fireplaces and an area just inside to take off ski gear may make the home more attractive to renters. Alternatively, if you are thinking about buying a beach getaway, then the proximity to water and outdoor amenities may be what renters are seeking.

Regardless, there are several factors that you need to cover before renting out your vacation home. Learn about property management companies in the area because you will need someone to handle cleaning, landscaping, and other mundane tasks.

Know the Law

You need to work with a tax agent to make sure that you pay what is due to the right authorities. This is especially important when buying a home overseas. In some countries, like Thailand, you may need to form a corporation and obtain a vacation home in the corporation’s name. In others, like Greece, you need to be approved by the government and get a special permit to buy a property. Many countries have different zones where foreigners are only able to purchase property within specific areas.

Understand the Risk

While owning a vacation home can sound like fun, if you are buying one as an investment, then you need to understand that property markets rise and fall. Therefore, you are putting your money at risk, so make sure that it is money that you can afford to lose. You may want to get property trend reports from different areas that you are considering, so you can see which ones will increase in value over the next few years.


You need to buy insurance on your vacation home. Generally, you can expect insurance costs on your vacation home to be higher than on your primary residence. If you are considering renting it out, then you may need to buy commercial property insurance. Often the very factors that make the home desirable, like nearness to the beach, will drive up insurance prices. There are a variety of insurance policies available for homes, so make sure you choose one that best fits your situation and budget.


Just like your primary residence, you will have upkeep on your vacation home. Depending on its location, you may have to maintain a furnace, air conditioner, and appliances. You may also need to take steps to protect your home from natural disasters, like wildfires or hurricanes. If you don’t stay on top of the upkeep of your vacation home, your peaceful home away from home may turn into a nightmare.

Investing in a vacation home may sound like the perfect side-project; however, there are so many different factors to consider when buying a new home. Take your time so that you do not rush into a final decision that you will regret later. Also, don’t be afraid to hire professionals to help you turn your dream into a reality.

Liked this article? Check out: What to Do When You’ve Fallen in Love With Your Vacation Destination.

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