Purchase a vacation home with caution 10/13/04

Purchase a vacation home with caution 10/13/04

Purchase a vacation home with caution

Harry Cassidy, HOME HAPPENINGS
PUBLISHED: October 13, 2004

In my last column, I wrote about the many Americans who are purchasing vacation homes.

As this summer ends, you might be thinking about making the same move for next year.

Purchasing a second residential property involves special issues beyond those involved in buying a primary residence.

Owning a second home is not cheap. It might not qualify for the lowest interest rates or all of the tax savings common with many primary homes. Be sure to check with a tax adviser. In addition, you'll have many, if not all, of the expenses of your primary residence, such as yard work, property taxes, insurance and general upkeep.

And if you live too far away from your second home to do any work yourself, you'll have to hire someone to do it for you, adding to the expense.

Space is as much a consideration when buying a vacation home as with a primary residence. While you might believe that you and your spouse will use the home most of the time, extended family members are almost sure to want to visit someday.

Will you have enough bedrooms and bathrooms to accommodate them?

The real estate adage about location is still true with second homes, but another one could be "distance, distance, distance."

How far away do you want your second home to be?

According to the National Association of Realtors, if you're like most people, you'll want to purchase a property that's near water, mountains, wilderness or other natural attractions.

That could mean a substantial drive to get to your weekend or vacation retreat. After driving to work in rush-hour traffic all week, do you really want to load everyone in the car and drive for several more hours?

The Realtors survey said the typical vacation home is 185 miles away. One-third are more than 500. Even those whose second homes are considered fairly close — about 100 miles — still drive almost two hours to get there.

Are you willing to make that commute on a regular basis?

Many people are. They say they enjoy leaving their everyday life behind to get away for a few days or weeks. But other people find they arrive more stressed than when they left.

Many experts suggest visiting or vacationing in an area several times before purchasing to make sure it's a place you'll want to visit again.

While second homes have been appreciating in value, they're still a luxury. That means the real estate market could stagnate if the economy worsens. Although you might not live in your vacation home year-round, there surely are full-time residents nearby. If a factory or other major employer closes, it could affect your property's value.

If you do decide to purchase a vacation home, many experts suggest a real estate agent who deals in vacation properties in the area you're considering.

There's no substitute for someone who's a local expert. He or she can tell you what areas are hot, which ones are not, and maybe point out some unheralded attractions or properties you might not have known about.

Finally, ask yourself if this home will be your full-time residence someday. Many people dream of retiring to their longtime vacation retreats.

If you're among them, make sure your second home is in an area you would really want to live for more than a few weeks at a time.

Questions for Realtor Harry Cassidy can be sent to Real Estate Unlimited, 8258 Allen Road, Allen Park, MI 48101; or via e-mail to harry@harrycassidy.com.