If you are buying a holiday home?

Summer has arrived, and for many families it means getting away for a few weeks. While enjoying a beautiful setting, warm sunshine or cultural enrichment, it’s easy to imagine how nice it would be to have a home that would allow him to do it whenever he wanted.

But do not leave your imagination away with you. Before hiring a beach house or a mountain cottage, give the same thought to buying as you would to buy their main home.

The first question is whether you can afford a vacation home. Did you cover their children’s school fees? Is it safe to retire? Is your emergency fund strong? Do not steal the essentials to cover a second home, no matter how great its potential as an asset. Even if you buy the property outright, you may not be able to access equity for a while.

A second home means more expenses than you think. Beyond the purchase price, you will need to consider maintenance, security or person, utilities, property taxes, furniture, travel expenses and other items. You may also have to pay the membership fee or evaluation. And if you intend to rent out your property, you will probably have to pay for advertising, and perhaps by a real estate manager.

In addition, insurance can be a significant expense. Property insurance for a second home often costs more than a principal residence, and may be more difficult to obtain. The more vacant the house will be, the more you can expect the premiums to be. Insurers may also want to pay more if you plan to rent the property. In areas where floods or hurricanes are possible, flood insurance should generally be added separately.

When considering how you are going to finance the home, remember that mortgages are usually second-most expensive than primary mortgages, banks tend to believe they take more risk. Lenders can look at the applicant’s income, rather than the general asset, which can make it more difficult for retirees or those approaching retirement. Some buyers consider taking a mortgage on their primary homes to finance second homes, but this puts your home at risk.