Do you fantasize about a getaway, someplace where you can dip your toes in the sand to the sound of an ocean’s sighs?  Whether you’re a retiree looking for a vacation home or are seeking a small real estate investment, an escape of your own can be a dream come true.  If you’re worried it won’t fit into your budget or maintenance will get out of hand, with a little planning the perfect property can be a practical purchase. 

A wise investment.  Purchasing a vacation home can be a bit overwhelming.  But by making good choices through careful planning, you can find a property that works with your budget and also offers potential as an investment.  When deciding on a location, you should consider important factors like tourism.  Choosing a property you can offer to renters when you aren’t using it allows you to recoup expenses and potentially turn a profit.  Some statisticsshow that Florida is a top vacation destination.  Additionally, Florida enjoys a thriving housing market, with about a thousand people moving to Florida every day. 

Planning your budget.  Crunch some numbers before committing to a purchase.  Redfin recommends tallying the additional costs involved in owning a second home, including purchase costs, property taxes, utilities, maintenance, repairs, and other ownership expenses.  Some experts suggest buying only if you can make the purchase with cash.  And as far as maintenance costs, plan to save one to two percent of the purchase price toward upkeep.  If your second home isn’t commutable from your primary residence, or if other factors restrict you from doing maintenance yourself, you should weigh the costs of hiring a property manager in your budget as well. 

Tax incentives.  You’re allowed to write off up to a million dollars in mortgage debt between your second home and primary residence.  If you’ve already maxed out the deduction, there is even more incentive to make your getaway a rental property.  The interest on the home becomes a part of your expenses you can write off from rental income.  According to some experts, you will use the IRS’s Schedule A form for deductions

Good timing.   Ideally, you will keep your vacation home for five years or more.  Because of the costs associated with buying and selling property, the longer you intend to own your vacation home, the better your chance for reaping a profit. 

Envision your dream.  Since the initial inspiration in purchasing a vacation home is to make it your vacation getaway, you should buy a property that will be satisfying and enjoyable to you and your loved ones.  Business Insidersuggests considering how the home will fit in with your lifestyle and needs.  Does a beachfront investment call your name, or will an inland property be a more practical solution?  Are you looking for a cottage-style home or luxury condo?  Also consider the area where the property is, and what the seasons may bring in terms of both weather and tourism.  You might even rent in the area at different times of the year, especially when you think you will be most inclined to visit.  This gives you an opportunity to test-drive the climate and culture.  Weigh all your options and decide what will be the best choice for you. 

Your Florida getaway.  With the beautiful climate, beaches, seagulls, and ocean breeze, Florida is a terrific choice for a vacation home.  With thoughtful planning, you can choose a home that makes you happy and is a great investment.  Assess your financial situation and whether the timing is right for you.  Decide what sort of property suits your lifestyle best, then make your getaway dream home a reality!

Author Contributor : Jim McKinley, Contact jim@moneywithjim.org