Known for its charming ambiance and close access to nature, the town of Highlands offers the perfect combination of urban conveniences with rural living. It’s become a popular spot to buy a vacation home, in large part due to its scenic beauty and close access to nature. If you’re considering buying a second home in Highlands, it’s important to know what you can expect. Buying a vacation property can be an excellent choice if you’ve done your due diligence and are prepared for what it entails. Here’s the inside scoop on everything you should know before buying a vacation home in Highlands.
1. Do some research on the local market
Before you start looking at properties, the first order of business is to dive in and start researching the local market. This can help inform you if it’s a good time to buy. Right now, it’s a seller’s market, a market condition that occurs when low housing supply meets high demand. This means that many interested buyers have limited inventory, putting sellers at an advantage. In a seller’s market, it’s not uncommon for homes to sell at a record speed, leaving buyers competing to score ownership of a property. Be sure to hire a trusted local agent who can help you navigate a competitive market and assist you in finding your dream vacation home.
2. Have a budget and know what you can afford
Buying a home is one of the most significant financial decisions you’ll make in your lifetime, and it’s not a decision you should rush. This applies to any home purchase, but when it comes to vacation homes, it’s easy to get carried away in a fantasy of what you want in your vacation home. Creating a comprehensive budget and knowing how much you can afford are essential to buying a vacation home in Highlands.
It’s generally recommended to put down 20%, as this is the golden number that will keep you from paying Private Mortgage Interest (PMI) rates. Keep in mind that in addition to covering the down payment and closing costs, you’ll also be responsible for covering other costs. This includes HOA fees, maintenance and upkeep costs, and the financial implications of self-management versus using a rental management company.
3. Spend time there first
While it might sound obvious, don’t buy a vacation home until you’ve visited the area several times. Buying a vacation home in a spot where you enjoy spending time is essential. Unlike hotels or even timeshares, owning a vacation home is a big commitment. That’s why you’ll want to spend time there first and get to know the local area. Likewise, make sure that the type of vacation home fits your lifestyle and any unique needs that you might have.
4. Get to know the neighborhood
Likewise, spend some time researching the neighborhoods to ensure the area you’re buying is the right fit for you. As the old adage goes, location is everything. There’s much more to buying a vacation home than just the fact that you like the area. Instead, you’ll want to make sure that you also like the neighborhood.
According to the National Association of Realtors (NAR), over 80% of vacation-home buyers opt to buy in a location that is within driving distance of where they live. If you’re buying your vacation home in a different county or state than the one you currently live in, don’t forget to account for local property taxes. Property taxes vary considerably from state to state and county to county, but in Macon county, you can expect to pay an average tax rate of .46%. This is below North Carolina’s average tax rate of .77%, meaning that Highlands real estate can be a great investment. Additionally, if you’re buying a vacation home in a resort community, there may be additional taxes or fees. Be sure you know your total costs before you put in an offer on a property.
5. Decide what you want in your home
Part of house shopping is deciding what you want in a home. Do you imagine your dream vacation spot nestled in the mountains or situated on water? How many bedrooms would you prefer? Do you want a big backyard or something smaller and easier to maintain? It might be helpful to sit down and create a list of everything you want in your vacation home. Make note of what is a must-have feature and what you are willing to negotiate on. This will help your realtor ensure they’re on the right path when looking at Highlands homes for sale.
6. Be sure to get the right insurance
If you have a mortgage on your secondary property, there’s a solid chance that your lender will require you to have home insurance, at least until the loan is paid off. Vacation home insurance policies are typically a bit different than the standard policies. This is primarily because many providers consider vacation homes higher risk if they will be vacant much of the year. For instance, an unoccupied vacation home is more susceptible to burglary and sustained damage. If a pipe bursts and no one is around, the damage could be substantial. As such, home insurance rates are often higher for secondary properties due to the increased risk of claims. While this may initially sound discouraging, there are ways that you can get better deals on vacation home rates. If you have a clean claims history and a good credit score, you can most likely find an insurance company to insure your property at a rate that works for you.
7. Common misconceptions and mistakes
Buying a vacation home is undeniably an exciting prospect, opening up a window of possibilities for future memories to be made. But make sure that you understand the misconceptions that come with buying a secondary property so you can avoid common pitfalls.
Not accounting for managing the property
Your vacation home may be right up the street or a plane flight away. Regardless of how much you might visit your vacation home, don’t overlook how you’ll plan to manage the property when you’re not there. This is especially imperative if you don’t live close by. Typical maintenance or repairs can become much more complicated when your second home is hours away. To avoid potential problems, it’s best to find contractors to outsource those jobs. Remember, if your home is in a popular vacation destination, these services will be in high demand and might come with a higher price tag attached.
Buying sight unseen
Considering today’s red hot real estate market, some individuals may be tempted to buy the property without visiting it in person. This may be tempting but could turn out to be a big mistake in the long run. Homeowners who visit the area during peak and shoulder seasons are traditionally happier with their real estate investments and experience less buyer's remorse.
Not researching the location and climate
As noted above, location is everything when it comes to buying a vacation home. It’s essential to buy a home in an area and neighborhood you love. Likewise, you’ll want to make sure that you are prepared for what the typical weather conditions are. The coldest month in the Highlands is January, when you can expect an average high temperature of 43.7 degrees and an average low temperature of 28 degrees. During the summer, the average heat index is calculated to be a tropical 87.1 degrees. If possible, try to visit the location during more than one season to make sure it’s the right fit — and climate — for you.
8. Make sure you have a realtor you trust
Buying a home can be a complicated and lengthy process, especially in a competitive market. To ensure you have what you need, it’s best to hire a real estate agent to guide you along the way. Whether it’s your first, second, or tenth home, you should always work with a trusted local agent to have the smoothest possible buying experience. Partner with a Highlands real estate agent who knows the local market and has extensive knowledge of the local market.
If you’re ready to start exploring Highlands homes for sale, contact Spencer Kirkpatrick today. Whether you’re looking for a vacation home or your forever home, Spencer is an expert in Highlands real estate. He has extensive knowledge in everything from land for sale to cabins for sale in Highlands, NC, and is ready to help you find your dream home.
