Most people either want a vacation home, or already have one. For many people owning a second home on a lake, ocean or tropical paradise seems like it would be the most amazing thing.
But without being overly diligent in research, a vacation home can be a big money pit. Below are 9 reasons you may want to rethink buying that vacation home in the middle of paradise.
I’m going to start with the obvious. Can you afford it? I am not talking about taxes, upkeep, dues, etc. I am simply talking about the mortgage on the home. A common problem many people face is that they go on vacation and end up at this awesome resort in the Caribbean. All you can think about is living there when you retire, or maybe using the home as a place you or your family and friends can escape to.
There is something about being on an island that makes people think they can afford to live a frugal life back home, therefore allowing extra money for a vacation home. You might even crunch the numbers telling you the same thing. However, for most people, they simply cannot afford that second mortgage. Because if something goes wrong financially and you need to recoup your money, it may not be as easy to get rid of that vacation home as you thought.
So, before you buy a second home, you better make sure your vacation mindset has left the building and you understand the reality of a second mortgage.
Click below to share this article.