Hudson Woods - Where Design Meets Nature – 7 Questions to Ask When Buying a Vacation Home

1. How well is the home designed and built? How well/or poorly will it perform? How much will it cost to maintain?
Trust your instinct. What you see, smell and feel tells you a lot about a home. Also ask opinions of friends, colleagues and professionals you trust, showing them the home you are considering for purchase. Old homes can be charming and this may be what you want. With an old home, understand how the home has been maintained over time and what the costs will be to maintain and operate the home with current plumbing, electric and mechanical systems. With a new home, it should be quite easy for you to understand how the home has been constructed, including what cannot be seen. If such information cannot be provided readily to you, this is a red flag. Research characteristics and performance ratings of elements in a new home you are considering. Such research will be very telling.

2. How will I maintain my home? Will I need to hire a property manager?
New homes are generally much easier to maintain than older homes or restoration projects. Even so, there are a number of things to consider, especially as the home ages. Make a list of possible expenses and consider this in relation to the time you plan to spend in the home. How much time do you want to dedicate to maintenance yourself compared to hiring a property manager. A good rule of thumb is to set aside about 2 percent of the home’s value each year for maintenance. A property manager is always good to have on-hand. If you rent out the property, you will have to make arrangements for someone to provide emergency repairs for your tenants. If you have a remote vacation home, you have to make sure someone can check for freezing pipes or leaks in the roof or any other issues in your absence. At Hudson Woods, the property manager offers a-la-carte services, so you can select specifically what suits your needs as a secondary home owner.

3. Distance from my primary home? What kind of car would I need?
Proximity to your home is important if you plan to visit the property frequently. While long distance trips might happen rarely, most secondary home owners enjoy quick trips to their home, any time of year, especially if you like spending weekends or three-day weekends at the property. According to the National Association of Realtors (NAR), more than 80 percent of vacation-home buyers own second homes within driving distance of their primary home. Driving proximity to a major city like New York is an added benefit if you plan to rent the home. The kind of car you will need depends on location and home. For example, while Hudson Woods is located in the Catskill mountains, the roads are in good condition so any car would work, though SUV’s and 4 Wheel drive are helpful in inclement weather or for more adventurous excursions in the area. Consider also whether the home has a garage. Will you be leaving the vehicle at the property while you are absent? At Hudson Woods, we offer an electric car charger upgrade, so energy efficient vehicles present another option.

4. Is this a smart investment? How does financing work?
According to Tom Kelly, co-author of How a Second Home Can Be Your Best Investment (McGraw-Hill), sinking a portion of your net worth into residential real estate can be a great way to diversify your portfolio. You will be building equity in your second home but Kelly says that it is also wise to look for a place that has value as a part-time rental property as well. This can help you recoup a large portion of your mortgage and other expenses. “Find something you like that you also can rent out, because most of the time you’re not going to be able to use it as much as you think.” There is a wide array of financing options available when purchasing a second home. Many Hudson Woods buyers have decided to work with our local lending partner Ulster Savings bank, who has walked them through the financing process. It is also often possible to leverage the equity in your first home, or even divert pretax funds from an IRA.

5. What are the annual taxes? Are there any tax benefits when owning a 2nd home?
Check with your CPA or the IRS to find out what the tax implications of a second home will be. For many people, the tax costs of owning a second home outweigh the tax credits, especially if you are living in the house for more days than you are renting it out. For example, if you rent out your house for fewer than 14 days, you don’t need to declare any earnings. If you occupy your house for fewer than 14 days in a year, your property is considered a business and up to $25,000 a year in losses can be deducted.

6. If I rent my home, is it the right property? What are peak rental times?
The first step is to think about how often you’ll want to rent, plus how long the potential rental season will be. “On average, people who are actively renting are doing so about 15 weeks out of the year,” says Eric Horndahl of vacation rental site “And they report, on average, that they make approximately $26,000 per year doing so.” After marketing costs, that’s enough to cover the mortgage, taxes and insurance on the average $360,000 home — if you put 20 percent down, Horndahl adds.

While you’re vacation-home shopping, it is always good to look at similar properties in the area. Websites such as HomeAway, Airbnb, and FlipKey are popular but you might also consider OneFineStay and Kind&Coe. With these sites you can see how active the rental market is, and how other places are priced on a nightly or weekly basis. Next, consider how attractive the home will be to potential renters: Is it close to local attractions, such as outdoor activities, vibrant towns and cultural hot spots. Does the property have any unique selling points or great amenities? A swimming pool is a key must have and people are always looking to experience great architecture. Make sure there are a few characteristics that will help your house stand out from others in the area, making it a top choice for renters.

7. Will I use a Hudson Valley home year round, or is it seasonal? How do I plan to use the home?
Hudson Valley homes are great for any time of year. The spring and summer present opportunities for hiking, camping, swimming and a bevy of outdoor activities while also providing a scenic winter escape in the mountains with winter activities such as skiing. The Hudson Valley is also renowned for its fall foliage season. The Hudson Valley has also become known as the creative corridor where you can find numerous cultural activities year round, from museums to restaurants and shops. How you use the home comes down to your preferences, how often you plan to be there and whether you plan to rent out the home.