Do you enjoy vacationing in Albuquerque? If you find yourself vacationing here more than a few times a year, maybe it’s time to think about buying a vacation home in Albuquerque and renting it out when you’re not using it. But how can you be sure you’re ready to take on this investment? Here’s 5 indicators that will show if you’re ready to buy a vacation home.
You Can Afford It
Well, this seems obvious. But it’s a deeper factor that needs to be honestly analyzed. The last thing you want is to be swimming in debt when you’re trying to make the most of your new vacation home.
The purchase price of the home is only one part of the whole cost of owning a vacation home. Just consider the expenses you pay now on your primary home – utility bills, maintenance fees, insurance, HOA fees, etc.
Here are a few questions to decide if you have enough money in the bank for your vacation home:
- Do you have at least 3-6 months of take home pay in emergency savings?
- Can you make down payment of up to 20%?
- Are you planning to set aside money for your kids to go to college?
- Will you be able to save for retirement?
- Is your existing home paid off?
- What is the return on investment for this home if you rent it out?
- How does it fit into your long-term investment goals?
You’ve Done the Research
Visiting Albuquerque and living here it can be two different things. Take time to understand the surrounding area and what it has to offer. You should also visit Albuquerque during different times of the year to get a feel for what it’s like to live here. You should also think about the long term and short term factors of buying a seasonal home, especially if you plan to be staying here a lot.
You Know the Market
Knowing whats happening in the Albuquerque housing market will help you be able to buy your vacation home at the right time. Seasonal demand can affect home prices, so keeping up with the local home market will help you make the best decision.
You’ve Made a Plan
Do you know exactly how you want to use your vacation home? Do you plan to rent it out when you’re not using it? If so, you need to consider advertising and logistics. You’ll need to come up with a rental agreement and payment method for renters. You may also want to hire someone to keep the home clean and keep an eye on the home. A property management can be helpful, but they often charge as much as 50% of the rental cost.
You Know How Much Taxes Will Be
Rental income is included in both state and federal returns. Have you determined how much those taxes will cost?
Buying a vacation home is a serious investment. But if you have these five factors in line, you can make that investment with more confidence and success.
We can help you realize your real estate dreams in Albuquerque with our powerful home search tool. And make sure to come back to our blog twice a week for more local articles about living in Albuquerque and real estate advice. Follow us on Facebook for all the latest Albuquerque real estate listings!
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