72% of individuals who own a vacation home state that now is a good time to invest in such a property, according to the National Association of Realtors. Meanwhile, Business Insider reports that there has been an increase in the number of Millennials opting to purchase vacation homes rather than primary residences.
But is it really worth investing in a vacation home in your favorite vacation destination overseas, or should you invest your cash elsewhere?
Will you use it?
49% of vacation home buyers say that their new property will be used for family vacations. However, CNBC reports that the average working American takes just 17.2 days of leave per year. Meanwhile, 25% take none at all. As such, you should really consider just how much use any vacation home you purchase will have.
With the average vacation home costing $700 in mortgage payments per month, you might be better off saving your cash and indulging in a luxurious vacation in rented accommodation instead.
Will it be your forever home?
An estimated 700,000 Americans have retired abroad, and you could be thinking of joining them by having your own overseas property to relocate to. However, it’s important to ensure that the vacation home you’re thinking of purchasing is suitable for an aging individual’s needs.
When you’re an older American, it’s possible to release equity from your existing home so that you can make adaptations to it as required. A reverse mortgage will provide the funds needed to remodel, extend, and install physical aids in and outside of your U.S property. But such programs may not be accessible to you overseas, so it’s always worth checking what’s available in your selected country.
Consider your ROI
Real estate is booming in the U.S right now. Spring has seen a surge of new property hit the market, while a reduction in mortgage rates is making property more attractive. But one thing to carefully consider when you’re thinking of purchasing a vacation home overseas is whether your return on investment (ROI) will be worth it. Real estate in vacation destinations, including Australia, France and Italy, are currently viewed as high risk, so it’s crucial you choose your location wisely. Additionally, you should consider the current state of the real estate market, as well as the forecasted one.
Investing in a vacation home overseas might sound like an exciting prospect. But before you start house hunting for your dream home abroad, it’s essential you consider the practicalities of owning such a property, and ensure that you’re fully prepared.