Vacation Home Buying Tips

Vacation Home Buying Tips

Buying a vacation home is similar to buying a primary residence or commercial property. Buying a vacation home has some important differences. Read top four reasons to buy a vacation home if you’re still unsure.

Step 1: Find A Vacation Home.

Location and property make up your home search. Thanks to modern technology, you’re not limited to searching near home.

Where To Buy A Vacation Home

Think like an investor if you’re not set on a location. True investors focus on income potential, so they search in multiple towns or states. Even if you want to buy in a ski town two hours away, you may find a better financial fit six hours away.

Step 2: Get A Vacation Home Pre-Approved.

You should be pre-approved for financing before searching for a vacation home. In popular vacation markets, a pre-approval gives you the ability to move quickly.

Here’s what’s needed for home pre-approval:

  • Paystubs
  • Employment verification
  • Asset proof
  • Check credit
  • ID (SSN, driver’s license, current address)

Step 3: Calculate Vacation Home ROI

When you find an appealing investment property, calculate your ROI (ROI). Real Estate can estimate a property’s monthly cash flow, operating expenses, and net income.

Step 4: Buy A Vacation Home

Now what?

  • Make a purchase offer.
  • Define your offer’s terms for honoring the price.
  • Set a deadline.
  • Pay with a bank check. (It’s escrowed until the sale closes.)
  • Read seller disclosures. (Sellers must disclose property details in writing.)

Step 5: Negotiate And Reach An Agreement

The seller may accept or reject your price and terms. Counter their offer. Negotiations continue until you and the seller agree on terms, or until you walk away.

Step 6: Apply For A Vacation Home Loan Or Pay Cash

Your agent communicates with your lender if you’re financing a vacation home. Your lender can then start the underwriting process. Full loan applications usually take one week to process.

Step 7: Home Inspection

Some sellers will do a pre-inspection, but you should still get one. Many markets demand it.

Depending on the inspection results, you may renegotiate the property’s price to account for potential repair costs.

Step 8: Get An Appraisal

When buying a vacation home with cash, no appraisal is required. If you’re financing the purchase, lenders will require an appraisal to ensure the vacation home’s value.

Step 9: Closing On A Vacation Home

If you and the seller agree, you close.


Your lender will send the loan documents to the title company after approval. Then, the signed documents will be sent to the county.


If you’re buying your second home with cash, bring a cashier’s check to closing. The title company will then deposit the cashier’s check. After the seller signs documents and the title company records the deed, the funds are wired to the seller’s bank account.

Step 10: Rent Your Vacation Home

Once you own the home, consider renting it out. (If you haven’t already, estimate your vacation rental income to see how much you could earn.)

Here are some questions to ask about vacation rental management:

  • Will you manage the vacation rental?
  • How much vacation freedom do you want?
  • Would you rather visit and relax or use the vacation rental as a project or hobby?
  • Do you want passive income and a self-paying home?

If you’re thinking about taking a key west family vacations this year, be sure to check out our list of the best places to stay. Start planning your trip today!

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