Buying Resort Properties

Today, I want to write about buying resort property. Most everyone enjoys a trip to the coast, lake, or the mountains. Many dream of having property in their favorite resort locale. I have purchased and sold over 10 properties in resort areas (beach and mountains) in three different states. Here a few tips I would offer in buying resort property:
1. DECIDE WHETHER YOU ARE BUYING RESORT PROPERTY PRIMARY FOR YOUR PERSONAL USE OR AS INVESTMENT- Do you want to buy property at the beach for you and your family to use, or for money now or in the future? Are you planning to rent the property on a short term or long term basis? If I am renting the property, can I afford the capital necessary if rent is not up to estimates? These are important questions to ask yourself as it will guide all your other decisions.
2. USE A REAL ESTATE BROKER WHO KNOWS YOUR YOUR RESORT AREA- While you may have a friend or family member who is realtor in another location, they might not know the resort area you want to buy. There can also be some resort properties that the average mortgage broker will not finance.
3. IF YOU ARE BUYING A CONDO, CHECK OUT THE HOA- While most folks only look at the location of the property and the price, it is important if you are buying a condo to check out about the HOA (Home Owners Association). Are they well run and managed? Do they have sufficient reserves to fund capital expenditures in the future (e.g. new roof, pool repair, etc.) Do they good insurance in case of hurricaine, tornado, etc.? A good realtor can give you a quick assessment about this.
4. IF YOU ARE GOING TO RENT THE RESORT PROPERTY, HAVE A LOCAL RESORT PROPERTY MANAGER RENT THE PROPERTY FOR YOU- While it is obvious that resort property management companies do charge a commission rate (typically from 15 to 40 percent depending on what services they provide), it will be much easier to handle rental issues from a distance away if you have a local rental company handling the property for you. it might be tempting to try to do it yourself, but the volume of rental income you get with a rental property manager might make up for the commission rate.
5. DON'T FORGET TO CHECK OUT THE TAX CONSEQUENCES OF A RESORT PROPERTY- If you rent out the property, you can deduct repairs, HOA fees, etc. This certainly can reduce your taxes. However, it is also good to know that renting the property can reduce your useage. For example, you can only use the property a few days of a year and it be considered passive income. Check out your tax advisor for details.
Whether you are interested in buying property at the coast, the lake, or the mountains there are some wonderful bargains out there today. If you are in the hunt for such property, good luck in your search. Your commments are most welcome. God bless.-- Lora Lee Properties