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  • Writer's pictureDebi Haning

Preparing for the Perfect Vacation or Second Home

With winter upon us; we as Coloradans naturally enjoy time in the high country. Skiing, snowmobiling, camping, hiking - whatever your pleasure we tend to gravitate to that perfect place in the mountains. I’m sure you, like many people, have considered owning your own mountain retreat. If you dream about returning home from a long day in the great outdoors to your own vacation home and relaxing in front of a toasty fire, here are some things to help make that dream a reality.

If you’ve been kicking around the idea of buying a second home, you’re not alone. In 2018 vacation home sales in the U.S. reached the second highest level since 2006 according to the 2018 Investment and Vacation Home Buyers Survey conducted by the National Association of Realtors. And, 2018 looks to be moving at the same pace.

As desirable as it is to own a vacation home, beware of the many hidden costs, here are a few other things to consider.

Will You Rent It When You Are Not Using It? Approximately one out of four vacation home-buyers plan to rent out their vacation home to others at some time. With vacation sites like VRBO, HomeAway and Air BnB, renting your home on a short-term basis is pretty easy. There are some upfront thing you will need to get done before you can do that, though.

Check with the HOA to see if they have any restrictions or rules about second homeowners, especially if you plan to do short-term rentals, as some covenants do not allow rentals. And check with your insurance carrier, they will likely require additional insurance.

Talk with your tax advisor if you plan to use it as rental property and ask her/him if you will need to report rental income and pay sales tax. Be sure to ask about deducting rental expenses like supplies, furnishings, repairs, updates and depreciation. Make sure you understand the difference between a vacation or a second home. If can effect how you’re taxed.

You will want to use a rental agreement and to collect a damage deposit. Will you use a property management company to handle the rentals? Some companies charge as high as 40%. If not, how will you do it yourself?

If you handle the rental agreements yourself, how will you manage the clean up after renters check out?

Will you be able to take care of maintenance issues?

You will also need to provide items like linens (sheets and towels), kitchen supplies, etc.

If you do not rent out your vacation home, you will want to make sure to visit it frequently or ask a trusted neighbor to check on it from time to time. A water leak, for example, can be costly if left untreated. I suggest you choose a location that you love that is not further than two hours away so you can use it more frequently and are able to get there quickly if needed.

You should consider the items your family and friends will need at the home to make sure it is fully stocked and ready when you arrive. Often you are able to purchase vacation homes fully furnished, but you will want personal items, spare clothes, bath items, non-perishable food items, etc. It’s nice to not have to worry about packing and bringing everything you will need every time you use your vacation home.

Choose a Destination You Are Familiar With

Before you make this important purchase, I recommend you visit the location several times, in various times of the year to make sure it is located in an area that your family will want to visit frequently. You may even consider this home to be the place you wish to retire.


If like many of my clients who want to spend your winters on a warm beach, you may wish to downsize your Colorado home to a home to something smaller, and easier to lock up and leave. Find one with full maintenance of the exterior and ground so you don’t have to think about hiring someone to take care of this for you when you are away. Likewise in your beach home you can relax and not worry about mowing the grass. This could be the perfect plan upon retiring.

Be sure to check into the taxes, property ownership of each home location to decide which one makes most sense for you to afford you the best outcome. If you change residency from one state to another it may help you financially.

With mortgage interest rates still historically low, this may be a good time to consider purchasing a vacation home. Owning a vacation or second home can be a wonderful experience if you go in to it prepared. Be sure to work with an experienced real estate professional who understands the real estate market and the area you are considering.

After that, you will be well on your way to finding that special home that your family will enjoy for many years.


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