You work hard and deserve a little vacation time. Virginia Beach has a lot to offer someone seeking a new view every now and then. With its lively culinary culture, year-round arts and entertainment events, and relaxing beaches you’ll do more than just want to visit. Consider owning a vacation home in Virginia beach and stay a while. Whether you’re seeking a warmer winter retreat or a permanent weekend spot with the family, owning a vacation home can be a dream come true. As household net worth grew to an all-time high in 2018,* the demand for Virginia Beach vacation homes has increased. Is buying a vacation home right for you, your lifestyle and your financial situation? Ask yourself the questions below before you start taking out a second mortgage and packing your bags.
Do you have the financial security?
The most important thing to consider is your finances. Many financial planners recommend paying cash on a second home. In 2018, 39 percent of vacation homebuyers paid all cash for their property.** If you can’t afford to pay cash, it’s ideal that you have paid off your first mortgage or at least have made regular payments for an extended time.
When calculating your finances, remember that you’ll also need to have funds available for maintenance on the home, unexpected repair costs and any applicable Homeowners Association (HOA) fees. If you don’t visit your vacation home on a regular basis or if it’s far away, you’ll want to factor in the cost to maintain it long-distance, which might involve hiring a property management company to check in on it.
How will you be using your home in Virginia Beach?
People buy a second home as either an investment property or a vacation property. You should figure out your intended use before buying. If your second home is less than 50 miles away from your primary residence, mortgage lenders view this as an investment property purchase, and they will usually charge higher interest rates and require a larger down payment — around 25 percent or as high as 40 percent. If you try to pass off your investment property as a secondary home, it could be considered occupancy fraud and you’ll be hit with fines. Regardless of how you use your second home, you will find stricter criteria when applying for a second mortgage than you did with your primary residence.
If you rent out your second home for 14 days or less, you won’t need to report rental income. But, if you choose to turn your secondary home into a rental property, there are specific laws and responsibilities to follow as a landlord, but many tax breaks and advantages as well.
How often will you visit your Virginia Beach home?
Having a second home you don’t spend much time in can lose you money. You’re more likely to use a vacation home in Virginia Beach if you’re within a few hours of driving distance from it rather than a plane ride away. If you have children or elderly parents that you plan on sharing the home with, consider their needs as well when deciding on a location.
A permanent second home can be convenient if you travel with a larger family. If it’s a spot you frequently visit or stay in for an extended amount of time, you can save money on hotel rooms or Airbnb’s, dining out, rental equipment (like water or ski gear) and more. You won’t have to worry about making reservations or packing heavily. A second home gives you flexibility in terms of when and how often you want to visit it, and the freedom is very appealing.
Where do you see yourself retiring?
Getting a head start on your retirement is always a good financial decision. Your dream vacation home right now may be different from your dream home in retirement. Picture yourself living in this home years from now, and factor in your hobbies, needs and lifestyle. If you’re not certain where you want to buy, or if you want to buy at all, a good way to determine if a vacation home is right for you is to rent in the area you’re considering buying in. Rent for a few consecutive weeks or months at a time, and you’ll get a good feel for the neighborhood and day-to-day life.
Of course, you can always choose to sell your vacation home in the future, too. Although real estate values fluctuate, a vacation home in an ideal location is almost guaranteed to increase in value over the years, or at least retain its value. When you buy in a popular destination, you can have the reassurance knowing that you’ll be able to resell it without losing money.
The coastal cities of the Hampton Roads region attract many vacation-goers year after year — and for good reason. If you love a specific vacation town or dream of a family gathering place, a vacation home can be an incomparable investment. You’ll enjoy countless memories and be able to enjoy it for years to come. Or, if you choose to rent out your property, the long-term profits of a vacation home can be rewarding. Assess your financial situation and see if you’re ready to purchase a home away from home.
Start with the source. Share the source. REIN.com.
- Virginia Beach Homes for Rent