Tom Kelly: A second residence differs from an investment property
Unlike a property purchased strictly for investment, vacation homes or second residences, are sought for a variety of reasons. Sometimes, they represent a stake in an area where one has fond memories of childhood vacations. They may be seen as retreats where the pressures of the weekday work world can be put aside for short periods of time. Some people see them as “audition” homes, which may become a principal residence when retirement comes around.
Because there is a diversity of motives connected with the decision to buy a vacation home, the process of choosing a community is less straightforward than it is in the case of a rental property. An investment property can be chosen in a relatively objective fashion, since for the most part, you never will live there. The purpose of owning the property is to appeal to others so you can maximize your return from your investment. With a vacation home, emotion and subjective judgment come into play much more significantly. You will live in the house and participate in the community, so your own preferences will be the guiding factor here.
Clarifying those preferences is the first step in deciding where to buy. If you can come to a clear understanding of why you’re making this purchase, what type of relaxation activities you prefer and what your ultimate goal for the property is, then the choice of a community becomes a process of matching up attributes to your own designs.
The best way to choose a community in which to purchase a vacation home is to begin with yourself and your family. You need to know what you want before you can determine where to look. Work your way through the following process:
How much do we intend to use this home? Answering this question will determine two things. First, it will tell you how far away from your principal residence you need to look when evaluating potential vacation homes. If your intent is to use the property each weekend and several other weeks, travel time becomes a significant factor. You probably want to stay closer to home, perhaps a two or three-hour drive. But if you want a place just for longer vacations, then your scope of choice widens. When you go to a place for a week or two, travel time becomes less important, and any location that meets your other criteria is possible.
What do you do to unwind? Any choice of a vacation home must center on the vacation itself. No vacation home will be enjoyable if members of the family cannot do what they find enjoyable. Dad’s desire for peace and quiet fishing in a mountain lake may not suit the kids’ need for active fun. Remoteness may bring peace but won’t work if you want to prepare meals or if the kids need to associate with their peers. Before you make any exploration of vacation home possibilities, come to a clear understanding of what type of atmosphere, amenities and facilities the whole group wants.
Is this a nostalgia trip? If you spent many happy hours on vacation with your family in a particular spot, you may wish to return there and buy a home in the same location. This is a legitimate wish, but you should consider how important this is to you. Sometimes, you can’t go home again. Prices have risen, congestion has increased and many of the things you fondly remember have disappeared. More importantly, those around you do not necessarily share your memories. If the vacation home is to provide satisfaction, it must meet the needs of the whole household. Even a seemingly familiar place requires investigation before you seek to relive old memories. Don’t let nostalgia for the past come before the more important considerations of the present.
How long will you own this home? Any successful vacation home choice will reflect a desired holding period. Plan ahead. If you want to hold this vacation home for the long term, think about how the preferences and needs of family members will change over time. Kids grow up and the desire for play space evolves into the need to be with their peers. The young and vigorous will age and slow down.
A vacation home that stays in the family for generations must be flexible both in terms of its physical capacity and its access to recreational activities.