For both personal use and investment property
Many people buy a second home to use as rental property now but intend to live in the home at some future date. Other people rent the property part of the year and stay in it while it's not rented. If you intend to use the property for both personal use and investment property, consider not only what you find attractive but also what vacationers would likely find appealing.
Talk to a tax professional to understand the tax implications of owning a property that you both occupy and rent.
Popular vacation activities
If you're buying an investment of combo property, consider not just what you want but also what prospective renters would want. These are the most popular activities people choose when buying a vacation home, according to a survey of 700 people from Vacasa:4
- Rest and relaxation: 78%
- Family-friendly retreat: 66%
- Drinking and dining: 46%
- Water sports: 45%
- Sightseeing: 44%
- Shopping and arts: 37%
- Mountain sports: 26%
- Snow sports: 14%
About buying sight unseen
Internet listings, particularly ones with 3D models of homes, make it possible for homebuyers to purchase a home sight unseen. This is particularly helpful for people who are buying property hours away from their primary residence, which most vacation homes would be. And people who are buying in a hot market with lots of competition might value the ease and speed of making an online offer on a home they haven't yet visited.
If you're considering doing this, keep in mind that photos and videos, while useful in helping you make a buying decision, won't tell you everything, such as defects that aren't apparent from photos or videos, any odors the home might have, or a sense of the neighborhood, such as noise levels. One remedy would be to hire a local real estate agent who can visit the property for you to answer such questions. Also, an inspection contingency becomes more important than ever on homes purchased remotely.
Because a vacation home is also an investment, a real estate agent, particularly one who works with investors, can help you choose a location that's likely to hold or potentially increase its value versus one that might lose value. Employment and crime statistics, as well as trends for the area can make a difference on whether the property you choose would be a good investment.