If you’ve been paying attention to the current real estate market, you’ve probably heard that interest rates have been hovering at or near all-time lows for quite some time now. And if you’ve been considering making an investment, you might be wondering if now is a good time to buy a vacation home. Low rates mean big savings, so should you take advantage of them?
Should You Buy a Vacation Home Now?
Making an investment when interest rates are low and the economy is in a bit of a rut can actually be very financially savvy. If you find a good price and procure a good interest rate, you stand to save thousands of dollars on your home purchase. However, that doesn’t mean jumping into a huge investment is the right move. Here are some things to consider when determining whether the time is right for you to buy a vacation home.
Low rates give you more buying power
One of the biggest reasons to buy right now is, of course, that interest rates are rock-bottom low. As a homeowner, that could mean as much as hundreds of dollars in savings per month, thousands in a year, and tens of thousands over the duration of your loan. It could also give you the ability to buy a more expensive home—without actually spending more.
It’s a sellers’ market
A downside to buying now is that the market is currently in favor of sellers. While low interest rates have driven many buyers back to the market, many sellers are still hesitant to list. This has led to a shortage of homes for sale, even as buyer demand is increasing. The result? High competition amongst buyers, fewer options, and steady or even rising prices.
Home prices are expected to rise
Home prices dipped a bit in the earlier months of 2020, but are expected to rise as the economy recovers from its decline. As a potential buyer, this means now might be the best time to get a good price on an investment home. It also means that should you buy now and plan to hold on to or rent out your home, you’ll likely see solid equity on your investment.
Investment properties have financial benefits
Aside from the current market conditions, investment properties always carry some advantages. In an area like the Crystal Coast, second homes are easily rentable, especially in the warmer months, as we get a lot of tourism to our area. They can also represent some good tax write-offs and incentives.
There is some economic uncertainty
One of the biggest considerations, and challenges, with buying at this time is that we don’t really know what’s going to happen. Based on the progression of the pandemic, and the government’s response to it, our economy could quickly recover, or possibly dip down again.
Increased business closures or social distancing measures could drive tourists to cancel vacation plans, making rental properties difficult to fill. If you do decide to take advantage of favorable interest rates and prices, just be sure you’re prepared to weather some downtime—ask yourself whether you could survive six months without rental income.
Thinking of Buying a Vacation Home on the Crystal Coast?
Are you thinking about making an investment in Carteret County? Linda Rike Real Estate is here to help! Contact us today to learn more about whether the timing is right for you to invest, and how to go about getting started.