More and more people are seeing very low interest rates as they are mostly hanging out in their homes and apartments with vacation options that bring more rules than ever. This has led a large number of people to finally take the leap in purchasing that vacation home they have always wanted.
Though it seems like there are several very good reasons that this is the perfect time to purchase a vacation home, there are still some things to consider during a still uncertain economic time.
So should you purchase a vacation home right now? The answer depends on your personal financial situation and your plans for the near future. Here are some pros and cons of purchasing a vacation home during the pandemic.
Con: It Can Be a Risky Time to Purchase
Even though the real estate market has had a strong rebound and is doing the best as compared to other markets, there is still risk involved in purchasing a house even when the rest of the economy is thriving.
If you are thinking you can purchase the vacation home and then maybe turn around and sell it at a profit in a few years, you should probably stick to renting in your dream location instead of buying. The shorter you own a home the more the risks increase on not receiving a return on your large investment.
Pro: Historically Low Interest Rates Could Mean Optimal Time to Invest
If you have a stable and thriving income right now and can easily back that up with proof through great credit scores and a low debt to income ratio, purchasing that second home in a dream location may just make perfect sense. Lower rates bring more affordability to monthly payments and higher price qualifications. If you plan to own the home for as long as you can, than there has not been a better time to buy since 2001.
If you are still a bit unsure talk to your real estate agent and a financial advisor to really determine that this a good choice for you specifically.
Con: Mortgage Qualifications are a Bit Trickier
Right now most lenders are concerned about the continuity of an applicant’s income. Right now applicants are being asked to provide several more solid proofs they have a stable income and will have no trouble paying the mortgage bill. Some lenders right now are requiring several checks on income instead of just one to get the most up-to-date numbers before closing.
Pro: Vacation Homes Can Be an Income Source if Rented
Most of the time vacation homes sit empty while we are not vacationing. If you purchase a home in a desirable destination you could have it pay for itself or even make you money by renting it when you are not using it. This does, however bring about a little bit of work and responsibility from you as the home owner to provide a well-maintained and safe place to vacation.
Con: The Market You Buy in Could be Struggling
Make sure you do your homework on how the economy is over all in the place you want to purchase. Do they have travel restrictions in place right now? Will you love being there even if everything is still closed? Will social distancing put a damper on its appeal to you and potential renters?
What will this mean for the projected property value of a home in that area?
Pro: You Don’t Need to Have Millions of Extra Dollars to Own a Vacation Home
If the idea of a second home has always seemed like just a lofty dream, there is good news. Now is a time that makes owning that home more real than you have ever thought. There are many ways more and more people of lower budgets can own that second home right now. Like buying a home near the water instead of on it.
Hoping to buy a vacation home on the forgotten coast? Let us help you discover if you can turn that dream into a reality. Please contact us any time.
Are you looking for a home on the Forgotten Coast? Contact us anytime to find your perfect Florida beach home.
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