Otter Tail County is an ideal location for a vacation home...with its convenient location and plentiful lakes, it is perfect for family activities and adult get-aways.
If you’re in a position to buy a vacation or second home, the timing couldn’t be better. In many areas prices are still hovering around five year lows, and there are great deals for buyers. Overall, the second home prices were down 11% at the close of 2010 from 2009 and roughly 25% from 2006, according to the National Association of Realtors. But don't wait...since the beginning of 2012, many markets are starting to see some increases.
Our homesandlakeshore.com team represent all of the most popular, most hidden and best priced areas for vacation homes in Otter Tail County.Here are a few tips from our team when considering purchasing a vacation home:
1. Now is the time to make your move!
Minnesota overall did not see the same level of decline as some hard hit areas of the country like Las Vegas and Miami. Some areas are showing increases in sales prices, so don’t hesitate if you are in a position to buy. Most economists believe the worst of the decline is behind us, so now is the time to make your move!
2. Think about rental potential
Even if you plan to use your vacation spot just for yourself, friends and family, still keep rental potential in mind. The ability to rent the place out can affect resale value. Before you bid on a home, check to see if there are any neighborhood covenants, homeowners associations or local regulations prohibiting short term rentals.
3. Don’t bank on rental income
If you are looking at a property that has already been a vacation rental, you can get a rental history, including dates it was rented and rates. Many vacation homes only rent out for a few weeks a year, and you also will have maintenance costs. Renting to defer some expenses? Great. Renting to cover the mortgage? Usually a bad idea.
4. How you use the home affects your loan rate
With new lending regulations comes tighter scrutiny. If you use your vacation property primarily as a second home, your mortgage rate may be similar to a primary residence. However, if you need to rent out the vacation home to qualify, or plan to use it as a vacation rental, it is considered investment property and the mortgage rate and down payment is typically higher.
5. Vacation homes have taxes benefits too
You can write off some operating costs, property taxes and mortgage interest depending on how much you rent or don’t rent the home. Check with your tax preparer for more information in how to take advantage of these benefits.
Please contact us with any questions you have in buying or selling your vacation home!
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