5 Vacation Home Buying Tips

Posted by Destin Real Estate Sales on Thursday, March 19th, 2015 at 8:34am.

For over 33 years Ocean Reef has represented private vacation rental properties including beachfront mansions, cozy cottages and luxury gulf front condominiums along the Emerald Coast. Many Ocean Reef guests fall in love with our special piece of paradise and often decide to purchase real estate here in this part of Northwest Florida. Considering buying property?  Here are 5 Vacation Home Buying Tips that will help you when you decide to “take the plunge!”


Tip 1. Location, Location, Location

You’ve heard this before since it always applies to the purchase of a primary residence- but did you know it also applies to vacation homes? A majority of those who purchase a vacation home plan to utilize it primarily for their own personal use. The first consideration is how far it is away from your main residence. After all, driving to your vacation home is a lot less costly and sometimes much easier than having to fly. For faraway visitors, the Emerald Coast is conveniently served by two great airports nearby. The Northwest Florida Regional in Fort Walton/Valparaiso and Northwest Florida Beaches International in Panama City Beach are each less than an hour away by car. Destin itself also has a private airport. Fortunately most major metropolitan areas in the Southeast are less than a six hour drive away and include Atlanta, Birmingham and New Orleans. This makes the Emerald Coast a prime “drive to” destination for vacation or second home ownership. You save a lot of money this way by easily packing up the car with everyone along with your luggage.

Tip 2. Try Before you Buy

It is important to really know the area well before you make a commitment to buy real estate. Ocean Reef Resorts represents hundreds of vacation rental properties from Destin to Miramar Beach and along South Walton’s Scenic 30A all the way to Panama City Beach. These properties include beautiful beach homes and luxurious condominiums. Each residential type, size and location is represented so that you may sample which kind of property best suits your needs. In our area there are also distinct differences related to the geographic locale. Destin tends to be a bustling casual but urbane setting with lots of choices for activity. Panama City Beach is very similar as well. The picture perfect communities along the coast on Scenic 30A in South Walton offer a more laid back beautifully pastoral kind of feel. Miramar Beach which is equidistant from both Destin and Scenic 30A has a marvelous mix of both worlds. Proximity of shopping venues such as grocery stores, pharmacies and hospitals is also particularly important since about of a third of vacation home buyers eventually end up using their property as a primary residence upon retiring.

Tip 3. Keep within Your Budget

Although many vacation home buyers may successfully use their place as a rental investment property this amount of income should not be viewed as a definite guarantee to secure your budget. You should view this purchase based upon your ability to pay for it. Potential income should be viewed as the icing on the cake but not the cake itself. There are other considerations to view as well. First of all you need to know how often your family or friends are going to have it for personal use. The prime “season” for Destin & South Walton rentals is during the summer months from Memorial Day thru Labor Day. This is when the demand and rents are at their peak. There is also a peak time in early March up until Easter. Winter demand from December thru February is softer. Other times during the fall and spring the weather is usually picture perfect but the demand and rentals are not as high as peak times. Many owners will rent their properties out during the months of high demand and come down themselves during other times of the year. If you are not planning to rent it out then you must still determine how often you will use it compared to other travel options or activities throughout the year in order for it to be cost effective.

Tip 4. Research Owning versus Renting.

Besides whatever your mortgage payments might be, don’t forget about other costs that you are responsible for paying as an owner. Primarily these include property taxes, insurance and maintenance. Many may also include monthly association dues. Property taxes on second homes in Florida are higher than they are for a primary residence. Primary residency offers exemptions for home ownership and there is no state income tax in Florida if you reside here the majority of your time during the year. Presume an average of about 1.5% in annual costs for maintenance. That would come to $1,500 per $100,000 of property value each year and is an average since it can include some costly items over time that may have to be completed. Obviously the better the condition of the property before purchase, the less the immediate future cost for you. The most costly of these long term items includes roofing, new HVAC units, plumbing, and flooring. Many properties here are sold furnished so the condition of existing furniture should also be taken into consideration. Property insurance can vary greatly especially with regards to Flood Insurance. If you are in a regular property zone the flood coverage portion of your policy should run only a few hundred dollars a year. It can be in the many thousands of dollars per year if it is in a flood zone or special coastal barrier area. Many properties here in Northwest Florida are in resorts or special communities that have monthly association dues. The good news is that such association dues often cover insurance and maintenance cost of the exteriors of buildings, but note that they do not cover interiors. They also can cover costs of landscape maintenance, irrigation, security and other services like basic cable TV or use of community pools. You should know the cost of monthly association dues and what is covered by them since each one varies.

Tip 5. Use Professional Services

You should be realistic and objective when you consider making a purchase and avoid being emotional about your decision. Although emotions certainly are a big part of any property purchase, especially if it is your vacation dream home, do not allow this to cloud your judgment. The romance of obtaining your dream can become nightmare if your budget does not work. Your accountant and bank will help you determine what realistically works best for you. Our professional Ocean Reef Realtors provide consulting services that will help you research your individual property needs. This also dove tails nicely with the rental operations side of our business since we have a few decades of highly reputable rental investment property management experience. This expertise about residential properties includes current pricing, statistical analysis, cost of operations, association dues, property disclosures, insurance costs, property tax information as well as anticipated gross and net income potential for rentals.

Ocean Reef is here to help and we have a wealth of knowledge and experience to help you make the right choice. It is our pleasure to do so. Call 877.392.6085 to learn more or start your real estate search now here on our website.

3 Responses to "5 Vacation Home Buying Tips"

Amanda Drew wrote: It's good that the association fees cover insurance and external maintenance for vacation homes. My husband and I want to buy a vacation home so that we can start a tradition with our kids. We don't want to have to worry about the outside of the home especially when we're not on vacation. I'll have to keep your tips in mind as I look for homes. Posted on Wednesday, June 14th, 2017 at 2:04pm.
Finley Moreira wrote: My wife and I would love to own a vacation home, and your suggestion to try out the place before we commit to buying is a really good idea. I feel like this would be the best way to ensure we really love the area and property in advance. We'll be sure to do this so that we don't ever end up regretting our decision in the future! Posted on Thursday, July 13th, 2017 at 11:51am.
Amanda Drew wrote: That's good to know that about a third of vacation home buyers will end up living in that property once they retire. It makes sense, really. My husband and I love to go to this one beach about a day's drive away from us. We go there so often, that we're thinking about getting a property out there. Your tips should really help us, so now we'll just need to find someone who does have vacation homes for sale in that area. Posted on Friday, November 10th, 2017 at 2:53pm.

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