Taking a vacation somewhere you love can make you wonder what it would be like to own a vacation home there. It's only natural to dream about having an easily accessible dwelling that you can tap whenever you want to come back to your favorite vacation spot, and owning a vacation home can in fact be a very rewarding and even lucrative experience -- if you plan it well in advance and know what you're doing. Of course, it's difficult to know exactly what you're doing if you've never bought a vacation home before. What do you need to consider before you take the plunge and decide to invest in a house that you'll only be visiting part-time? Make sure you're thinking about all of the factors on this list below and taking them into account, and your vacation home purchase will be a success that yields dividends both in memories and income for years to come. **Understand your reasons for wanting a vacation home** Many people decide they want a vacation home for a number of reasons, so you don't need to figure out just one -- but it is important to determine why you're interested in purchasing a vacation home so that you can choose one that maximizes the benefits and minimizes the costs for you, personally. **Don't go over-budget** Budgets are created for a reason, and that reason is to ensure that you don't overextend yourself financially because you let your heart run away with your pocketbook. **Consider the added costs to a vacation home** Vacation homes have many of the same expenses as a traditional home, but you might not be considering that when you're dreaming about buying one. **Go for an existing home over a plot of land** Many of us dream about buying that perfect plot of land and building a home to your exact specifications, and this can be one way to spend your money. But if you're going to do it, it's usually better to err on the side of making that built-to-order home your primary residence instead of a vacation home. **Hire a local agent** Unless your real estate agent happens to have a great deal of expertise in the area where you want to buy, it's usually better to find an agent local to the vacation location where you want to stake your claim. **Understand the rules and regulations where you're buying** When you're planning to rent your home on Airbnb, there's nothing more discouraging than realizing that local regulations forbid short-term rentals. **Single-family isn't the only option** When most people think about a vacation home, they're imagining a single-family unit -- and if that's what you're absolutely sold on owning, more power to you. **Think twice about timeshares** A timeshare might seem like a dream investment, but if you think about how much you're really spending for just a few days a year in your vacation area of choice, it might not break down to a good strategy for you. **Know how often you'd visit -- and when** It's easy to imagine that you'd spend all your long weekends and paid time off at your vacation home, and maybe that's really the case! But it's best to make a plan for how often you'd be visiting your vacation home and when so that you can truly understand whether it's a good deal for you ... or a sour one. **Keep the market in mind** Some vacation home-buyers who are hoping to create ongoing wealth and build a legacy might purchase a vacation home thinking that the real estate market is going to continue to go up ... and up ... and up, no matter what. **Location matters ...** Perhaps the main attraction of this vacation area is its local body of water -- whether that's an ocean, river, or lakefront. **... And so do the seasons** Not every vacation area is popular year-round; sometimes it gets too hot in the summertime, sometimes too cold in the winter. **Stay in the U.S. if possible** Sure, the thought of owning a beach home overseas is enticing, but especially if this is your first vacation home, it might be a bigger risk than you're imagining. **Teaming up with family doesn't always work** It's always nice to think about how a vacation home strategy with your entire family might work out -- perhaps you have siblings who also love the area and might be willing to go in on a vacation home. **Make plans for emergencies** Depending on your vacation location, there may be natural disasters or even regular run-of-the-mill home disasters that you aren't considering during the purchase process. **Plan for vacancies, too** Even if you don't plan to rent your vacation home at all and finances aren't a factor, there are always risks involved with leaving a home unoccupied for long stretches of time. **Consider the future** Retiring in your vacation home once your working days are through might be a nice thought that comforts you when you're stuck under the fluorescent lights in your cubicle at the office, but before you let your imagination run away with you, think about the implications of this plan. **Be realistic** There's always a certain amount of fantasy involved in purchasing a vacation home, so do your best to rein yourself in and bring reality back when it's important. **It's not all about the money** Even though a budget is critical when it comes to purchasing a vacation home, sometimes we need a little reminder that this decision might not be all about finances and return.
