For those who have always had to own a vacation home on the top of their list of priorities, it is easy to see why.
Whether considering in investing in a sprawling multi-bedroom lakeside cabin that can easily house the whole extended family or a small little shack somewhere off the beaten track, a vacation home provides many with not only invaluable access to the wonders of nature and the great outdoors but also a place to escape the day to day grind of city real estate in Green Bay and N.E. Wisconsin.
It also allows people to enjoy the best of both worlds, getting a healthy dose of genuine country living while still not having to give up on the luxuries that come with owning their current real estate in the Green Bay and N.E. Wisconsin region. Even better, these types of properties can easily be rented out to those in the market for short term Green Bay and N.E. Wisconsin real estate while they enjoy their vacations and getaways. It seems like a major win-win for everybody.
That said, the decision to purchase a vacation home also entails a lot of commitment, and it is important for anybody considering investing in a second piece of Green Bay and N.E. Wisconsin to put some careful thought into the decision.
This is particularly true of anybody hoping to play the short term rental market, which can indeed be a dangerous game. Renters can expect to incur plenty of extra costs in addition to having to invest significant amounts of time and energy into managing bookings. As such, vacation homes often end up costing a lot more than people bargain for in the long run. That said, this doesn’t mean that they can’t be a worthwhile investment for anybody who is fully aware of what they are getting into, and if this is the case, Green Bay and N.E. Wisconsin realtors are there to make it happen for them.
So, with all that in mind, what are some of the most important questions that anybody considering purchasing a vacation home might want to ask themselves first? Read on to find out.
1. What is the Primary Reason for Investing in the Property?
The first thing that anybody considering investing in a vacation property needs to think about is why they are considering doing it in the first place. This entails some careful consideration in terms of when and how much they plan on using the property, and if they plan on renting it out when it is not in use.
Some buyers may have the financial security to simply close up the home when not in use, and if this is the case, most of the following considerations become non-applicable. In other cases, some people may want to consider eventually retiring at the vacation home in the future.
However, for those considering entering into the short term rental market, outlining the basic goals for the property itself is really just the tip of the iceberg. When it comes to using a personal property for rental use, things can certainly get messy, and buyers need to be prepared to grow a thick skin in terms of how their personal home stacks up to buyer’s expectations.
2. How Much Time is Available to Manage Short Term Rentals?
For anybody considering entering a short term rental situation, they can probably also safety estimate that they will have to put in more time than they might expect.
Keep in mind that they will not only have to commit to online management and juggling different bookings, but they will also be expected to maintain a certain set of standards if they are to lock down the high ratings and positive reviews that will ensure bookings in the future. In addition, most renters will need to be continually available in order to answer questions that crop up about the property, and this means they can’t count on clocking out.
This can be a rat race, to say the least, and anybody considering in investing in a vacation property for anything other than personal use should expect nothing less.
3. What Added Costs Can Be Expected?
This question pertains primarily, once again, to those hoping to rent out their vacation property on a short term or long-term basis.
That said, even those who are buying a vacation property for personal use and personal use alone can still count on encountering some costs they might not expect along the way. When a property is not in continual use, things get run down quickly, and this can add up to some major repairs. They might also need to shell out for some basic upkeep and maintenance while they are not around, as well as having to invest time and energy to properly seal and secure the property when they are away.
Meanwhile, those considering a rental-dominant situation will need to prepare themselves for even more unexpected financial surprises. Just like any other piece of real estate in Green Bay and N.E. Wisconsin, there will still be property taxes, insurance and mortgages to pay down, and all of this will have to be jugged in additional to potentially complex rental tax implications, depending on the ins and outs of the situation.
Keep in mind that the home will have to be cleaned regularly, and this entails either hiring someone to do it or taking it on alone. However, anybody who already has a stable job can forget about trying to juggle all that extra work at random intervals, and will probably need to resort to hired help, which can cost up to $150 per booking depending on the size of the property and the cost of labor. This is all in addition to higher operating costs than the standard home variety.
The Takeaway
Vacation homes can be a great investment, but will usually only pay off for those who are fully aware of what they are getting into. For those who don’t have the financial freedom to finance the second property by other means, they will probably need to rely on the rental market to make ends meet, and the reality is not always as rosy as it may seem.
That said, for anybody who is fully prepared to commit, a vacation home can really pay off in the end, whether in use-value or rental income and realtors in Green Bay and N.E. Wisconsin are always there to help buyers lock down the type of deal that will make sense in the long run.