Key items to consider when you are buying a vacation home


How much do you want to invest?

This factor is a great starting point.  A realtor can provide you a list of availability in the price range you are considering.  They can also give you information on the property tax based on the last billing period.  A discussion with your property insurance carrier is a good idea.  This way you can get a good picture of the primary annual costs associated with owning the property.  Be aware that wind & hail coverage and flood are often a separate policies.

How will you pay for it? 

Both your financing options, and your tax considerations (discussed below) are impacted by your planned use of the property.  If you are financing the purchase the decision to treat the home as a second home vs a vacation rental property determines the financing options available to you.  Generally financing institutions offer lower interest rates for second homes as compared to vacation rental homes.  If you are in the financial position, and comfortable with it you could finance the vacation home with proceeds for an equity loan on your primary residence.  We suggest that you discuss these options and implications with a trusted financial advisor.

Tax considerations are extremely important.

If you plan to rent the house, and your personal use is less than 15 days or 10% of the time rented, you can deduct the costs of maintenance and repair of the property, insurance, taxes, rental management fees, advertising and mortgage interest from the rental income you earn on the property.  You are also allowed to take depreciation expense against the rental income.  It is always a good idea to discuss major financial transactions with your tax advisor prior to making your final decision.

How will you plan to maintain the property?

An often overlooked part of home ownership, especially vacation home ownership, is maintenance. What if there’s an emergency? Or maybe you just need year-round preventative maintenance and service check ups. Having a local contact to check up on the home is important and finding a location that offers that service is just as important. Xpert Home Services is a one-of-a-kind business that recently launched on the Outer Banks. They’re an all-in-one home maintenance and vacation hosting provider that is taking the beach by storm…figuratively speaking.

Do you plan to eventually retire to this home?

This is important because it may make a difference in what you are looking for in the home.  For example, storage is not as important of an issue as with a purely rental or vacation property as it would be for a future retirement home.

Are you interested in renting the property to offset costs?

In order to maximize your rental return it would be advisable to consult with a rental company in order to identify what amenities renters most desire that match your needs as well.

What activities are you most interested in when vacationing at the beach?

Our communities are highly diversified.   If relative seclusion is high on your list, the 4 wheel drive communities of Carova and Swan Beach are great for this.  If you want the convenience of nearby shopping and entertainment the more populated communities may be more your style.  Explore the various communities to determine which best suites the needs and desires of you and your family.  After that you are ready to actively search for that perfect get-a-way you have dreamed about!  Happy hunting!

Yes, You Can Expect More With The Eillu Real Estate Team!

Mailing Address
PO Box 3009, Kitty Hawk, NC 27949
Physical Address
3712 Suite B North Croatan Hwy
Kitty Hawk, NC 27949
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