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Can You Afford a Vacation Home?

In recent years in the U.S., purchasing a vacation home has become a popular investment. According to the National Association of Realtors, in 2014, the total number of vacation home sales increased by 50% from 2013. There were around 1.13 million vacation homes sold. This is the highest number of vacation homes sold since the NAR began this study back in 2003.

However, though the number of vacation homes being sold has increased, it does not mean that it is easy to be able to have a vacation home. Across the U.S., the median price for a vacation home was around $150,000 in 2014. To be able to afford having a vacation home is complicated. When thinking about purchasing a vacation home, the first question you need to ask yourself is: can you afford a vacation home?

To be able to afford a vacation home, a person is going to need to make sure that they have enough money to purchase the actual home, but also take care of all of the expenses that come with owning such a home. This includes:

  1. Paying the property tax. In order to have an understanding of how much this is going to be, consider talking to a tax assessor in the county that you are looking to purchase a vacation home in. They will have the most current information on the typical amount people are paying for their property taxes.
  2. Insuring the home. As you look around at potential vacation homes, there are multiple ways to receive a lower insurance premium. One such way is through purchasing a newer home. The older your home is, the more you are going to have to pay for insurance. Old homes risk having more problems. A second method is having a good credit score. The lower your credit score, the more likely you are to have a high premium. Other areas that affect insurance premium include: pets, deductibles available, location, and natural disasters.
  3. Furnishing the home. A vacation home is not going to be a comfortable living space if it does not have some furniture! But furnishing a home is not a small expense. Make sure to plan out what type of furniture you are going to want in the home and how much that is going to cost. It is better to overestimate this cost than to underestimate it. Consider slowly purchasing items to furnish the home rather than one big splurge. You can always upgrade your home with new furnishings as you have the money.
  4. Paying the utilities. You are going to have to pay for the utilities for when you are and are not living at the vacation home. Some vacation homeowners like to shut off their utilities every time they are out of town by calling each of their utility providers. Others like to keep the utilities on, but at a reduced cost from the utility provider. The amount each person has to pay for utilities is going to vary greatly. But working with your utilities provider is going to give you the best deals for when you are away.
  5. Having security features. This is especially important, as you are not going to be living at this home on a daily basis. You will want a security system that protects from theft, that warns when breaking and entering, a fire, or flooding occurs, and that pages you and the necessary professional when something does occur.
  6. Keeping the home maintained. Every home needs maintenance. Depending on the frequency you visit your vacation home, you will have different maintenance tasks that should be done. A few of the primary areas that need to be checked include: the gutters, drains, leaks, batteries on smoke detectors, and damage to the exterior of the home.

San Diego is a popular city for vacations. With its good weather, activities, and ambiance, people from all over the U.S. choose this city as a place to relax. If this is a city that you plan to visit regularly and for weeks at a time for the rest of your life, consider buying yourself a vacation home. With a vacation home, you are not going to have to find a place to stay each time you visit, or pay the high rental fee. It gives you a permanent place, a place to call home when you are in need of a break from your current home and lifestyle. A vacation home in San Diego is a popular way to make visiting San Diego easy.

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