North Carolina is home to some of the most beautiful beaches on the East Coast, as well as in the nation in general. Every year, this part of NC is flooded with annual tourists, many of whom opt for a more consistent way to visit the coast by investing in their very own vacation home. If you’re one of those looking to invest in your own little slice of paradise, here are three main questions you need to ask yourself to get started:
1. Will you make good use of it?
Before you even start to think of buying a vacation home, you need to ask yourself: will I use it enough to make it worth it? If you find yourself going back to the same location year after year, and you never tire of it, then yes, you’ll probably get a lot out of owning a vacation home in that area. But, if you’re not absolutely in love, think again. North Carolina is home to a whole slew of beaches and islands, each with its own pace and unique feel.
If you’re looking for a beach that feels far away, but is close to nightlife, shopping, etc., you probably want to consider areas like Wrightsville Beach, Carolina Beach or Figure Eight Island. Or, if you really relish the slower pace of sleepy beach towns, you should consider looking further down the coast at Bald Head Island, Oak Island or Ocean Isle. These are just a few of the options to consider! You can always contact an agent to get an idea of what areas might suit you best, but, when in doubt, it’s best to just see for yourself. Just consider this an opportunity to squeeze in some extra vacations in the name of research.
2. Can you afford it?
After you’ve determined if a vacation home actually makes sense for you and your family, you need to ask yourself if you can afford to purchase another home. Typically, mortgage companies are going to charge higher interest rates or a require a higher down payment for a second home. Additionally, you’ll have to keep your eye on the long-term finances as well, factoring in insurance, taxes and maintenance.
The best way to accurately plan for these expenses is to team up with a local mortgage broker, who can help you devise the best way of putting up the money for your down payment, as well as factoring in those long-term costs. Their experience in and knowledge of the local market will be paramount in helping to calculate these costs, as well as advising you on the projected value of any potential properties in the coming years. For instance, if there’s a highway slotted to be built in the area in the next five years, they’ll probably know about it, and can advise you to look elsewhere if your home’s value will be affected. They’ll also become a valuable resource in finding local resources, such as reliable property management companies, to keep your home in tip-top shape while it’s not in use or to keep it maintained and safe from damage if you end up renting it out.
3. Is it a smart, long-term investment for you?
One thing to consider, that usually doesn’t register too high for vacation home seekers, is: how close is this vacation home to your current home? Is it a few hours’ drive? Or, do you have to board a plane and fly across country? Now, if you’re looking in an area that you already frequent (which you should), and you know that you’ll move heaven and earth to get there on a consistent basis, then you’re probably fine to start searching in your desired area. However, if you’re only planning on making your way over to your vacation home once a year, you’re really not getting the best return on your investment.
Remember those long-term costs we mentioned? Those property maintenance, utilities, water and electric bills are high overhead to pay if you’re not planning on taking semi-regular trips to your vacation home. Plus, you don’t want to leave it sitting unoccupied for too long. If you’re planning on renting it out while you’re not using it, just make sure that 1) it’s in a high-demand area that will ensure its probability of getting rented regularly, and 2) that you have a solid understanding of how renting the property will affect your taxes. If your home is rented more than 15 days of the month, that rent is considered income, and will have to be filed as such on your taxes. It’s important to iron out these details from the get-go, instead of finding yourself in over your head later.
Are you considering purchasing a vacation home in Coastal NC? Let us know if we can help you by calling us at 1-800-533-1840 or contacting us via email at email@example.com. Our experienced staff has all the know-how you need to find the vacation home you’ve always dreamt of!