Do’s and Don’ts of Buying Resort Property

dos and dontsIf you have ever gone on vacation to a resort property, the odds that you have dreamed about owning a vacation or second home are very high.  The many options available to prospective buyers can be dizzying.  Amenities such as championship golf courses, world-class skiing, and private airstrips are just a few of the options available these days in many resort communities.

Purchasing a resort property needs to also be about the right fit for your lifestyle, what you can afford, and what the resort affords you.

The Do’s of Shopping for a Vacation or Resort Home

  • Do make a budget and consider your finances before shopping for property.
  • Do interview potential real estate agents to assess their knowledge about second homes and vacations homes.
  • Do visit the property more than once – visit at different seasons, winter/summer, daytime/nighttime.
  • Do consider resale value, even if you don’t think you will ever sell.

The Don’ts of Buying a Vacation or Resort Home

  • Don’t give in to your emotions before you are 100 percent certain this property will be the destination for your future vacations.
  • Don’t drain your retirement accounts to purchase a second home or vacation home.
  • Don’t hire your primary residence real estate agent if they don’t have any specific knowledge of vacation home sales in the area you are looking to purchase.
  • Don’t buy a property on the first visit or while on vacation to the resort community.  Make it a sound business decision, not one based on your emotions – see the first Don’t.

What is the Purpose of Your Vacation Home?

You will also need to consider the primary reason for buying a resort property.  Will it be your primary residence, an investment, a weekend retreat, or maybe a retirement property?  Make this one of the first questions you ask yourself, before looking at any property.

If the property will be for weekend use, it needs to be within a few hours’ driving distance.  If it will be for retirement, then it needs to already be or be able to be made accessible, and be located near medical facilities.  If the property will be for rental income, it needs to be near a popular ski resort, lake, or river.

Extra Costs to Factor In

Vacation or second homes have expenses that your primary residence may not have.  Costs such as travel to get to the resort, maintenance, especially if it will be a rental property, vacation home insurance, and property taxes, all have to be factored into resort living.

Hire a Real Estate That Specializes in Vacation or Second Home Properties

A resort real estate agent should have the RSPS or Resort and Second Home Property Specialist Designation.  This ensures they have been trained extensively in resort living, how to buy and sell second home properties, and the nuances involved in resort communities.  For example in Mammoth Lakes, a qualified real estate agent can advise whether the property is allowed nightly rentals should you choose to rent the property when you are not there.  They should also know the area very well that you are considering.  If you determine that the real estate agent you are talking to about resort properties does not have this knowledge, immediately find someone who does, otherwise you could be steered into a bad real estate deal and no one wants that.

How are your personal finances?

If you are not paying cash for your vacation or second home property, most lenders will required buyers to put down between 20 and 25 percent on a second home.  Use the online mortgage calculator on my website to get an estimate of how much you can afford, how much you will qualify for, and how much two mortgages will cost you if you currently hold a mortgage on your primary residence.

Sonja Bush is a Resort and Second Home Property Specialist and is ready to answer any questions you may have about resort living, the Mammoth Lakes area in general, or about the current real estate market in Mammoth.

Since most property buyers start their search on the internet, why not head over to Sonja’s property search page on her website to see what properties are currently available in the Mammoth Lakes area.  Sonja can be reached by calling her at 661.979.9000, or emailing her at

Should I rent or buy?

rent-or-buyThere are many facts to consider before answering this question.  The biggest one being how long you plan on staying in the community.  Experts advise if you plan on staying less than 7 years then purchasing might not be the best option.  Renting versus buying is also a question about lifestyle.  Renting provides mobility.  Owning provides security.

There are several useful rent vs. buy calculators available online which allow you to input your personal data and review various scenarios.  These calculators help you do more than simply compare a monthly mortgage versus rent payment.  They take into account all costs involved in your decision.

Also, make sure your decision is not based on the numerous rent vs. own myths.   A recent Trulia article (, Chief Economist Jed Kolko dispelled some of the myths – around the rent vs. buy cost factors nationwide.  These are the  top two myths.

Myth:  Rising home prices and mortgage rates make it more expensive to buy than to rent.

Fact: Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. But rising mortgage rates have narrowed the gap between the cost of buying and the cost of renting.

The 30-year fixed rate is now 4.80%, compared with 3.75% one year ago (according to the Mortgage Bankers Association, or MBA). This jump in rates has raised the cost of buying relative to renting. As a result, buying is 35% cheaper than renting today, versus being 45% cheaper than renting one year ago.

The key reason buying is still cheaper than renting is this: both rates and prices are rising from very low levels and are still below their long-term historical norms. But the rent versus buy math depends on your local market, as rising rates and prices have pushed a handful of metros very close to the tipping point when renting becomes cheaper.

Myth: The mortgage interest deduction is the only reason home ownership is more affordable than renting.

Fact: A key factor affecting the rent-versus-buy math is whether you itemize deductions on your income taxes and what tax bracket you’re in. If you itemize, you can deduct mortgage interest payments (not principal payments) and property tax payments from your income before calculating how much you owe in taxes. That said, only 33% of tax filers choose to itemize. Itemizing lowers the cost of buying relative to renting – especially if you pay taxes at a higher rate, because that means you’re deducting more.

But buying remains cheaper than renting almost everywhere even if you don’t itemize. Without itemizing – or if your tax situation means you get no benefit at all from itemizing – buying looks 22% cheaper than renting nationally.

Your local realtor can help you in your rent vs. buy decision by providing the costs associated with home ownership on a property you are considering.