Holidays – most of us look forward eagerly to them. And all the more if we have a vacation home to relax in. A vacation property has been described by Investopedia as “a secondary dwelling, other than the owner’s principal residence, and is used primarily for recreational purposes including vacations or holidays.” Many people are interested in investing in second properties for this purpose. Areas in North Oxford are ideal for vacation homes as the Summertown letting agents will agree.
However, before purchase of a vacation property, there are several factors to take into consideration.
Why and how?
The reason for buying a secondary home and the affordable budget are 2 items that need careful consideration. If the reason is high on the priority list and the price of the home is affordable, it could make a dream come true. However, comparing the cost of renting a similar property for a holiday with the costs of purchase including price, taxes, insurance, etc could help before finalising your decision. Also helpful is to research sold prices for similar properties in the area and the time they stay on the market. An error people sometimes make is not thinking about how often the home will be used and the costs to maintain the same in good condition. For those thinking of professional investment in a second property for short term or vacation rental, financial goals and ROI (return on investment) need to be carefully thought out. This should also include “non-rental periods” where the property may lie vacant. If a Buy to Let mortgage is required, the offers available should be studied.
Location and Type:
The property definitely needs to be in an area which is attractive. However, there are many other details to consider besides a “nice place”.
- The neighbourhood and local amenities should be checked out, whether you wish to stay there yourself or for future tenants. Is there a good driveway to the property? Is parking available? Daily shopping needs should be easily accessible. So should restaurants, pubs and entertainment venues. A strong internet connection is a must. Good transport facilities would be an asset. The space available also makes a difference. If there is a garden, that adds to the kerb appeal.
- The type of property is also important. If for personal use, make sure it has all the facilities required to make it a great getaway from city life. If for investment, would you like the occupancy to be for families, groups or just couples? Ensure that the house has flexible accommodation, with sufficient toilets and bathrooms. Planning for the future, in case of additional appliances to be added, could also help. Check out the competition and the running rentals.
Maintenance:
The property will need to be kept in good condition, whether for personal use or rental. If it is a distance away and you are unable to supervise the maintenance yourself, a professional to carry out this task will need to be employed, so that the work will be of quality standard.
Insurance:
Security against damage or theft is important with the help of insurance. Depending on the location and type of home, adequate services will need to be covered and shared with the person taking care of the property.
Legalities:
You may decide to keep the property as your own vacation home. However, if circumstances lead you to put the home up for rent or sale, you should make yourself aware of the local regulations and any restrictions of HOA (Homeowners’ Association) on the ability to rent as well as the fees for doing so. If you are considering long-term investment, the same legal conditions will need to be studied.
Valuation and survey:
It is best to view the property yourself. Also important is to obtain a professional valuation and survey. Any potential problems with structural issues, dampness or subsidence can be identified, which may give you some bargaining power on the price as well.
Conclusion:
Owning a vacation home may be one of the targets you have set on your “goals list”. If for personal use or long-term investment, purchasing a second property is a great achievement. However, for the reasons mentioned above, it is wise to consider all factors before ticking this off on your checklist. Once the above have been cleared, you will be able to enjoy and reap the benefits of your vacation home!
