Are you dreaming about buying a vacation home, but are unsure where to start? Follow this step-by-step guide to making your dreams come true!

Step 1: Match your housing choices to your lifestyle

Do you live in the city but often take vacations to the countryside? Is there a beach that you frequent regularly that you consider your "home away from home?" Do your children live in the city and you'd like to be closer to them on occasion? Knowing what you want (and what your lifestyle looks like) is the key first step in deciding the "where" of your vacation home. Do you want to have a lot of family gatherings at the home? Consider a larger one. Will it simply be you and your spouse? A small apartment or a condo may meet your needs.

Step 2: Determine how you will use your vacation home    

Deciding how you are going to use your vacation home is essential from a financing and taxing standpoint. You can choose to classify your new home as your primary residence, a second home, or an investment property. All of these options have different sets of rules and implications, so be sure you do your research first to decide which one is right for you. This article goes into more detail on the three different types of homes.   

Step 3: Understand what the total cost will be

You can use an online calculator to give you an idea of the type of property you are able to comfortably afford, or you can speak to your own personal financial advisor or accountant, if you have one. Besides analyzing the down payments, closing costs, and taxes associated with your new home, you should understand the total monthly cost of your existing home. Additionally, be sure you take into consideration other personal costs that vacation home ownership will incur, including the furniture and housewares it will take to fill it, the travel costs to and from the home, and the cost of property maintenance.

Step 4: Review the monthly cost

Here, you'll take into account mortgage and down payments, insurance and property tax, as well as lender and inspection fees. Be sure to draw yourself a visual (an Excel doc will work wonderfully) so that you can see the breakdown of costs easily and clearly.

Step 5: Make an offer using a local realtor or lender

It's best to find a local realtor or lender in the area of your new home, as many vacation properties are in specialized local markets. These lenders are often experts in local transaction fees, commissions, and taxes, as well as making appraisals. They will know the area and be able to point you toward the right property—or away from the wrong one.  

With these tips in mind, you should be able to successfully navigate the vacation home-buying process. DAS Demo wishes you the best of luck. Happy home-hunting!