Investment, Vacation homes & real estate

Interested in purchasing a vacation home? Here is what you need to know

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Interested in purchasing a vacation home? Here is what you need to know

International buyers are often attracted by the thought of buying a home in the U.S. that they can occupy as they wish, and then use it as a short-term rental income property.  However, some communities have zoning laws and other restrictions that can affect your ability to utilize a property in this way.  

According to Jon Penny, owner of JCPenny Realty in Central Florida, your first step should be to contact a realtor.  “Realtors are the local experts,” Penny explains.  “They will know which locations are county- or council-approved for short-term rentals, and they will have their fingers on the pulse of what renters in that area are typically looking for.”  For instance, many renters want to stay in a resort-style community because of its amenities: fitness center, swimming pool, restaurant or bar, and so forth.  Penny continues, “Ten years ago, a home with a pool was considered to be a welcome relief from a cramped hotel room and usually cost about the same.  Now, renters are looking for more things to keep their families entertained, without having to pay extra or leave home to do it.”

Another essential step in the planning process is to determine the purpose of the property:

-Investment only, to generate the largest net return

-Second home, divided between personal use and investment

-“Lock and leave”, a home that will be for personal use only and left unoccupied when not in use.

Again, a realtor can provide you with factual and historical data to better help you understand which properties would work best for the purpose you have in mind. Finally, Penny explains, you’ll want to consider how you plan to purchase the home: a U.S.-based mortgage, an equity release from a property you already own, or a cash purchase.  “Some buyers don’t realize that they can get a mortgage on a property for as little as 20% down and that the lender will use the U.S. property as security for that loan.  Also, there is no age bias in the U.S.:  as long as you are able to meet the repayment criteria, you will not be turned down because of age.” 

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vacation home, investments, USA, buying a house, real estate