Winter is in full swing and the snow is piling on the mountains in all the usual places. You are just itching to get your ski boots on and hit the runs. Hold that thought. Where are you putting those skis at the end of the day, though? The rental house on the bottom of the mountain is no longer available. The best hotels are already booked, and the hotels you could still get a room at are well over-priced. Is it time to consider that second home or a vacation home near your treasured black diamond trails?
So you have been contemplating taking the plunge and skiing into your dream home in the mountains–but at what cost (financial and otherwise)? Before you shovel out the dollars to hit the slopes consider if this is the right decision for you, and then consider the best approach to finding that second, winter home.
First, find purpose.
Every home purchase is driven by purpose. Whether that purpose is need or want there is a foundation upon which each home rests–literally and figuratively. Of course you will require all the necessities, but what is it you really need in this winter home? Will this be a true second home or an investment property? Are you looking for proximity to the resort or is further out for a better price and more space acceptable? Would you consider condo-living on the resort or do you want your own lot? It is important to answer these types of questions before meeting with a real estate agent to make your search as smooth and efficient as possible.
Location! Location! Location!
You may already have a location in mind–it is likely within proximity to that resort you usually buy a season’s pass for. However, is that driving distance or does it require a plane ticket? You should absolutely consider the resort you will most frequent and enjoy doing so. However, as a vacation/second home you will want to maximize use so choosing a location that is a manageable distance is key. That being said, know the area you are looking to buy in, and know it well. Your Realtor will be able to share details of each property’s location, but knowing the general area and how it fits your needs and wants never hurts.
Of course you have to think about the money…
Before you go too far down the line make sure you understand the true cost of owning a second, vacation home. Just as you would for your permanent residence, consider how you will be paying for the home itself and the additional “hidden” costs in purchasing and owning a home. From there, the costs of monthly maintenance both financially and otherwise should be calculated into your overall monthly budget including your original home. Contrary to popular belief, vacation homeowners don’t always pay for their second property in all-cash. You will need the cash for the down payment of course, but many buyers are able to get a mortgage on the additional property and sometimes they are the same as your primary residence meaning you will receive the lowest rate possible. In addition to considering mortgage and utilities costs, sometimes ski homes come with HOA’s so be clear on what additional costs are associated to the property so that you can budget accurately.
If you opt to own the property as a second home, be sure to read the fine print as your loan, often times tied to the rate on your primary home as mentioned above, may prohibit renting the property. That’s certain something to consider when taking on the additional financial burden. That being said, if you opt to utilize the property as an investment then you should anticipate higher mortgage rates. In renting out the property you can help offset added costs to your bottom line and make the ski home a less burdensome financial commitment. Of course it really depends on your intent for the new property and what is feasible for your financial situation.
Let the locals do their job
You wouldn’t go it alone on the search and buying process of your primary residence so why would you do that for your ski home? Take Realtor recommendations of friends who also own in the area if you have that resource available to you. If you are unsure of who the best Realtors are in the area use the resources available to you and vet a handful of them with pointed questions. Make sure the agents you consider are knowledgeable about searching and purchasing vacation homes in the area you are looking at and ask that they share references if they are willing. Also, keep in mind that commission in high-traffic vacation locale can be highers so make sure Realtors give you numbers upfront. The more you can make the buying process localized the better.
Now that you’re ready, grab your skis and find your winter abode!