Designing a Second Home: Are you ready?

You’ll know after reading this article…



Thinking of a second home? Many people do this time of year, especially after enjoying a vacation in a favorite spot. And with interest rates still low, this could be a good time to take the leap. According to the National Association of Realtors, in 2014, 21% of residential home sales were for vacation homes.

But put down that pina colada or microbrew and stop dreaming for a moment to consider the practical issues: time and money. You’ll need both.

Why do you want a second home?

A weekend getaway, far-away vacation spot, income or investment property? How far do you want to go to get away? This is important for a number of reasons. The foremost question is what do you plan to do with the property?

vacation-home-chairsObviously, if you want a place to escape to every weekend, it needs to be close enough. You’ll have to determine your tolerance for drive time and traffic.

Be realistic about how often you’ll use the property. If you have children, as they get older they may lose interest, and activity and sports schedules can interfere.

Do you envision it as a future retirement home? You may want single-floor living (or at least a master suite on the first floor), and to be closer to a town or city for convenience.

Payouts, Payoffs and Return on Investment

Buying it while you’re still working can make it easier to qualify for a mortgage, which brings us to finances. Financing a vacation home is different from a primary residence. Not only will you have to be able to afford two mortgages if your primary residence isn’t paid off, but income or investment property is subject to different rules.

Typically investment properties require a larger down payment of 20% to as much as 25%.

There could be tax advantages to using a second home as rental property in between vacation stays, and renting it out can help pay your mortgage. But being an absentee landlord has its own challenges and concerns.

If you’re thinking of recouping your investment by renting it out, think about:

  • Is it in a desirable resort-type area that’s easily accessible for vacationers?
  • If it’s in a community or association, are there limits on the length of time you can rent it out?
  • The place will have to be fully furnished including some “toys” appropriate for beach-going or boating, snowmobiling or skiing, for example. (And you can expect lots of wear and tear on the furnishings.)
  • Each time you leave, you’ll have to lock up personal property in a closet or storage area.
  • Will you need a property manager to rent it out for you, do credit checks on potential renters, advertise, etc.?
  • Who will oversee the changeover and cleaning in between guests?
  • The extra insurance you’ll need: usually more liability and medical.
  • What happens when something breaks?
  • You can’t be sure of having good renters regularly.
  • What if the property sits empty for a long period of time?

Maybe you don’t need to earn income from your second home, or don’t want the hassles of lake-shore-homehosting strangers. You still need to consider who will keep an eye on the property when you’re not around for weeks or months at a time.

A second home located hours away might need, if not a local caretaker, at least an electronic security system with connected fire or burst pipe alarms. Insuring a second home may cost about 20% more, because it’s considered a bigger risk when empty much of the time.

In some beach towns that become ghost towns in the winter, for example, you may see red lights attached high up on the house. When the power goes out, the light turns on to notify neighbors or authorities to notify you that there’s a potential for burst pipes.

A turn-key condominium on the ocean with hurricane shutters ensures you can close the door behind you when you have to leave, virtually without a care. The same with a ski chalet condo. (This is why you pay condominium maintenance fees.)

What will you do at your vacation home?

Ahh, now the fun part of owning a second home: relaxing & recreation!

What do you envision yourself doing at your getaway place? Lounging in a hammock, fishing, hiking or beachcombing? Entertaining family and friends?

vacation-homeIf you don’t see yourself pruning bushes or mowing a lawn, look for something with no-maintenance landscaping or plan on paying someone else.

Chances are you won’t find a house or property that totally fills the bill. That’s where 3W Design comes in. With a custom vacation home design, we can give you the special touches to make your second house feel like home—only easier to care for, so you can relax.

The ultimate test of a second home is: do you enjoy it? 3W Design’s builders and designers can make your visions of the ideal vacation home into a reality.

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