Start With Defining The Basics: Why do you want a second house? Is it for vacation or retirement, or is it a financial investment? Determining this will help point you in the right direction for the location, price and type of second home you ultimately purchase. Next, Location, Location, Location: You want a vacation home that's convenient to your primary residence, but still far enough away to create a sense of escape.
If it's much more than a four-hour drive, you'll probably skip a lot of weekends once the novelty wears off. But you don't want to be so close that you have to run out to make emergency repairs for renters.
Make A Recreational Wish List: Research several areas to see how each matches your wish list for recreational activities, such as golf, skiing, arts and culture, dining, swimming, boating, hunting, fishing and hiking. Compare costs and make several scouting trips to promising regions.
Check The Calendar: Calculate how much time you and your family plan to spend at your vacation home. Then decide how long and for what price you plan to rent it. To be safe, calculate a 25% vacancy rate when determining the annual cost of the second home. If the vacation house of your dreams is a stretch, consider something smaller or in a different area.
Retirement: If you plan to retire to your vacation home, start with the basics, such as estimated annual upkeep (including heating and cooling costs), to determine the economic feasibility once you're retired. Check the quality of nearby doctors and hospitals, senior activities and public transportation, too.
Organize Your Finances: This isn't a back-of-the-envelope project, so tuck your credit report, loan documents and insurance information in a single folder before you contact a realtor and start looking for a house in the area of your dreams. Pre-qualifying for a loan will make your search easier.
Do Your Homework: Before making an offer, check out recent sales of comparable houses in the area. Then look into taxes and police and fire protection. If the current owner is being forced to sell, you may get a better price. After you've closed the deal, enjoy your getaway and r-e-l-a-x.
