When buying a vacation home in California, follow these tips

Vacation HomeWhen buying a vacation home in California, it’s important to understand that there are some key considerations you’ll want to make differently from when you buy a primary residence. Here are questions to consider before you commit to buying a vacation home in California.

What can you afford comfortably?

Be sure to budget for how much income you’ll need to maintain a second home. For example, you’ll have to spend approximately $30,000 or more to afford a $500,000 home. This money goes toward your mortgage, your home taxes, insurance, upkeep, furnishings, a caretaker for the property if you don’t live nearby and  a fund for disasters or major repairs, and travel costs.  Don’t count on recouping that money be renting out the property; that’s never a guarantee.

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How often will you use the home?

Consider the amount of time you want to spend at the home. Will you be living in it during the winter only, or will you be visiting the home every weekend? Those factors can play a role in exactly where you want your vacation home to be located. It’s doubtful you want to drive 5 hours every weekend to spend time there, but if your visits are less frequent that could be perfectly fine.

What location is right for you?

The perfect location is going to depend largely on your interests. In California’s wine country, for example, a buyer probably wants to escape urban life and enjoy mountain or vineyard views. Other locations may provide particular attractions, such as beaches, golf courses, or proximity to a larger city for arts and culture.

Have you researched expenses and revenue for buying a vacation home in California?

If you plan to generate income from your vacation home purchase, you should be aware that the demand will fluctuate with the economy, weather, the home’s amenities and other variables.  If making income from your home is a priority, do your best to remove the emotion from your purchase and select based on what appeals to the widest target market rather than what you want for yourself. Do research so you know whether your homeowners association permits you to rend the property, what your policy would be for children and pets, and whether you’ll need to split proceeds with a management company. You’ll also need renter’s insurance.

When buying a vacation home in California, be sure to talk to your real estate agent about market trends, the most attractive locations and stick to your budget so you don’t overextend yourself — and, of course, be sure to enjoy your vacation home! If you’re buying a second home for retirement, check out my blog Boomers&Beyond for relevant articles and tips for retirees.

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