Is 2021 the year to finally buy the vacation home of your dreams? Whether it’s a family cottage in the woods or a more intimate beachside retreat for two, the reality of purchasing a second holiday home comes wrapped in responsibilities. But if you feel you’re ready to pull the trigger, then read on for five important tips to consider before investing your hard-earned cash. 

Road Test The Location In Each Season 

Do you have a favorite ski retreat you visit each winter? Or a lakeside haven you and your family head off to every summer? It’s important to visit and stay in these locations in all four seasons to ensure you still love it and want to escape there year round. While one season may bring you annual bliss, the others might not do the same. 

Save Up For It 

Purchasing a second home is different than buying a primary property, so you may need extra time to save up for it. In general, a 30% down payment is required, as well as potentially higher interest rates. On the upside, if you’re not planning to turn your vacation escape into a rental property, there may be financial breaks available on both the tax and mortgage interest. Be sure to inquire about a “second home” mortgage, as it is a special type dedicated to this category. 

Determine If You’ll Ever Use It As a Rental Property 

A key thing to decide before stepping foot into any Open House is whether or not you plan to use it as a rental property. For starters, what renters desire in a getaway retreat could be vastly different than what you want in your own private oasis. Seriously consider if you need to cater to renters’ wishes to be located close to town, or if it’s ok to set-up camp in a peaceful and very remote locale. 

Know Exactly What You Can Afford 

Do the math first and tally up what your annual costs might be to maintain a second home. Besides quarterly tax and utilities, you may need to consider other costs specific to the area and property type. Is it located on the beach, where the humidity and salt air will cause more wear and tear than expected? Or is it a rental property that will require the use of a rental manager and cleaning services? All of these extra expenses can quickly add up. 

Enlist The Help of a Local Real Estate Expert

Do your due diligence and enlist the help of a local insider who can show you around your favorite town, and give you the lowdown on where you think you’d like to own your vacation escape. While you love it in the summer, the winter season may be desolate with few stores and restaurants open. A vacation home is a serious investment, so be sure to thoroughly do your homework before taking the big plunge. 


We want to help you finance the vacation home of your dreams. To learn more about our mortgage products visit our website or call a Member Specialist today at 800-422-5852. Equal Housing Opportunity.