Vista Cay Orlando by OVH360's video: 10 Reasons to Not Buy A Vacation Home

This is important because you need to understand the reasons to buy AND the reasons not to buy which are just as if not more important than the reasons to buy a vacation home. Visit us at http://www.OrlandoV.com Here in Orlando Florida we have seen various scenarios and discuss them in this video. Take our questions / statement test Reasons not to buy or not buy a vacation home : -You are buying it for investment purposes. Yes 20 Points / No 0 Points -You have to finance or use partners for the home in order to purchase it Yes 20 Points / No 0 Points Vacation homes are luxury items. If you have to finance them to be able to purchase one you can not afford one. If you can easily afford to pay cash but choose to finance under the advice of a CFA or CPA then that is different. Ultimately, you should easily be able to pay cash for a vacation home. -You are depending on the irregular rental income from the vacation home to cover your expenses and or pay the mortgage Yes 10 Points / No 0 Points If you don’t have enough freely available disposable income to pay all the monthly and yearly bills on your vacation home if it is not rented you should not buy such a home. -You will rarely use the home Yes 5 Points / No 0 Points -You don’t want to vacation in the same spot year after year Yes 5 Points / No 0 Points Only buy a vacation home if you know without a doubt you love the location and will use it constantly. -You do not want someone else to manage the home Yes 5 Points / No 0 Points -You don’t understand vacation homes can result in negative as well as positive or break-even cash flows Yes 10 Points / No 0 Points Vacation homes even when rented can often run just break even or negative at best especially during slow rental seasons. -You will have to work part-time to rent the home in order to pay the overhead as well as for your time renting it. Yes 10 Points / No 0 Points Do you have a job? Do you want one? If you decide to rent your property out yourself through the various distribution channels you will now have to work very hard. Your property manager can handle the renting of your property for you, but the downside is often you will not get full retail rates. Most property managers charge 25% commissions on their direct bookings -You are looking for stable rental income Yes 15 Points / No 0 Points Stable rental income is more commonly found in investment property and not in vacation homes. Vacation homes are often in seasonal markets with large fluctuations in demand and expenses -You do not have a financial cushion to pay for major expenses such as new roofs, new air conditioners, paint the home, new furniture etc. Yes 20 Points / No 0 Points -Monthly HOAs of $400 to $800 a month seems excessive to you Yes 15 Points / No 0 Points Summary - If you don't really qualify to buy a vacation home don’t. As you can see the potential reasons not to buy a home are far longer than the reasons to buy a home in chapter 2 Unfortunately, many vacation homes today are targeted at buyers who have to “stretch” themselves financially to buy a home whether that means they have to borrow money to purchase or are dependent on rental income from the property to make ends meet. This then defeats the objective f enjoying your vacation home as it becomes a financial obligation.