GMAC Real Estate - Investing in Lots and Land: Investing in Land for a Vacation Home
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Investing in Land for a Vacation Home

Takeaways

  • Location is a key consideration when buying land for a vacation home.
  • Make sure distance between your vacation property and your primary residence isn’t too large if you’re looking for a weekend getaway.
  • Keep financial considerations in mind before investing in property for a second home.

Did you know?

  • Almost 40 percent of home purchases were for second homes in 2006
A weekend getaway shouldn’t be too far from your primary home. According to the National Association of Realtors, almost 40 percent of recent real estate purchases were second/vacation homes. Baby-boomers led the market, followed closely by younger generations who see the long-term value of buying land.

If you are in the market for vacation home property, take some time to think through what you want to accomplish:

  • Think location first. Look for land in areas that meet your personal interests. Do you love the seashore? Skiing pristine slopes? The solitude of nature? A resort lifestyle with non-stop activities and amenities?
  • Think time frame. If you want to build tomorrow your land choice may be very different than if you want to hold the land and possibly use increased equity as a down payment for future construction. Also consider construction contingencies. Some developments in popular vacation and second home markets require that construction begin within a certain period after the lot is purchased.
  • Think distance. Travel time is important if you want a weekend retreat. It is impractical to spend a day traveling to and from your vacation home if you only have a day or two to stay when you arrive. Distance is also a factor during construction or when repairs and renovation are needed. The closer the land, the easier it is to handle the logistics of building.
  • Think finances. How will you finance the land for your vacation home? Are you looking at the land for ultimate retirement or as an investment for future re-sale? Also, can you afford the expense of maintaining a second home in addition to your primary home? What about renting the vacation for part of the year as a source of income and to help cover expenses.
  • Finally, think professional help! When buying a lot or land for a vacation home some distance away your current home, it makes sense to use the services of a real estate professional who knows the local market. This can speed your search for the best land and will streamline negotiations and closing.

Learn More About Investing in Lots and Land

To learn more, explore the advice on Lots and Land Investment in this section of our site. To search for lots and land in your area, please visit a local GMAC Real Estate office's web site to search for available properties, and to find a Real Estate agent that can discuss opportunities for investment.