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A lot of people dream about being able to buy a vacation home. They want to have a little home away from home where they can go on vacation. Their own place that allows them to go to their favourite place without having to pay for a hotel. Without having to go out to eat.
Drawbacks
The truth is that owning your own vacation home seldom is as good as it seems to be in your dreams. Owning a vacation home comes with a number of drawbacks.
- It is expensive. Buying a house on a popular tourist destination is expensive, and it is usually cheaper to keep paying for hotel rooms than it is to pay the mortgage for the vacation home. If you buy it with your own money then the yearly return you lose from not being able to invest the money is likely to be worth more than what you pay for hotel rooms. You will have to pay taxes and maintenance for your vacation home.
- It reduce your freedom. If you have a vacation home, then you will feel forced to go there on your vacations. You are no longer free to go wherever you want.
- You will get scammed. Almost all people who buy a vacation home will overpay for that house. They do not live in the area and will not hear about the good deals. Those will be brokered locally. Someone buying a vacation home will always pay more for the house than a local would. Brokers catering to tourists will do all they can to keep the price high even if the actual local prices are sinking.
- The house needs to be maintained. This will be an ongoing expense.
- Hard to relax. If you vacation in your own house then you will always see things that need to be fixed in your house. You are likely to spend at least a few days fixing things. A hotel allows you to focus on relaxing.
- Easy to overestimate the income potential. Many owners of vacation homes overestimate how much money they will earn from renting the house. They look at how much vacation rentals rent for and calculate their earnings from there, but they forget to take into consideration that most houses will be empty for a lot of the time. They will not always be rented.
Owning a vacation home is not always a dream. It can be a lot of work. It is vital that you know that. Owning a vacation home is seldom a good idea unless you plan to retire there eventually. If you do, then that will make it a better choice.
If you still want to buy a vacation home than you can keep reading below.
Where to buy a vacation house
It is very common that tourists spend a few days somewhere and fall in love with the area. They then decide they want to buy a house in the area. This is a horrible idea. You do not know enough about an area after just a few days to know if that is an area where you want to buy a house or not. A place that is wonderful to visits for a couple of days might feel completely different after you spent a week or two there. The things you need when you stay a few days in a hotel are entirely different from the things you need if you stay in your own home. I recommend that you rent a house and stay there for at-least a couple of weeks (months) before you decide you want to buy a house in an area.
How to find a vacation home
You will have to expect to overpay for your vacation home. All the best deals will be made locally. Most of them will never be advertised on any listings site. The houses that are listed, especially on sites targetting foreigners are likely to be listed at a higher price than what they would sell for locally. The owners that list on these sites want top dollar and they are willing to wait for it. This is something that is very hard to avoid if you try to buy a house from abroad.
If you can go to where you want to buy a house and live there for 6 – 12 months then you will have a lot better chance of getting something at a good price. You have to be willing and able to act fast if you do find a good deal.
There are agents that you can hire to try to help you find something. They will not give you access to the best deals. They will act on these themselves or send them on to a friend. They are unlikely to send them on to a random client unless nobody else is interested in them.
If you are unable to live in the area for an extended period then you will have to accept paying a higher price. The flip side of this is that you can sell the house to another foreigner if you want to sell it. A foreigner that also is likely to pay above market value for the home.
Use local real estate agents and brokers to find a house you like.