Five popular bargain spots for a vacation home
"It's absolutely a good time to buy," says Ken Kamen, president of New Jersey-based Mercadien Asset Management. "In many resort areas, prices haven't rebounded because of all the inventory. And the economy is bouncing off the bottom." Let's not forget low interest rates, either.
Boomers who have paid down the mortgages on their primary residences are in a particularly good position to buy a vacation home, Kamen says. But he advises that you don't consider a second home simply an investment.
"Buy it because you want to spend time there," says Kamen. "If you're not occupying it, maintenance costs are higher. It's not just the mortgage and taxes." Unseen quick fixes can turn into expensive large fixes in sporadically occupied homes. Especially in the east, where, for example, pipes can freeze when the plumbing's not used. If your second home isn't close by, add in travel costs, too.
Renting out your vacation homeis also an option. In some cases, summer rentals can bring in enough money to cover year-round expenses. Kamen suggests that if you rent out the house, do so only if the home is a "reasonable drive" from your primary residence. "You need to keep an eye on it." Agencies are an option for organizing rentals and keeping the house clean, but that involves costs as well.
Tom Kelly, an author and syndicated columnist who writes about real estate, recommends that if you go the rental route and are trying to decide where to buy, "put yourself in the shoes of a vacationer. Where do you like to go?" College towns like Asheville, N.C., for example, typically have cultural opportunities and a "built-in group of renters."
So, where to find that perfect vacation home? Following is a list of five popular bargain vacation places in the U.S., plus average prices there, according to data from HomeAwayRealEstate.com.
1) Myrtle Beach, South Carolina
Named after a local shrub, this resort town of 25,000 year-round residents hosts millions of visitors annually. Why? The 60 miles of Atlantic Coast beaches, for one. Also water parks, fishing, the Grand Strand, and your usual summer vay-cay activities. The current average price for a two-bedroom, 2-1/2-bath home is $230,743. But you can grab an 850-square-foot, three-bedroom cottage with a view for $153,000.
2) Pocono Mountains, Pennsylvania
If you want a playground that's available year-round, the Poconos beckon. They offer skiing in winter, equestrian activities in spring, sailing in the summer and hiking in autumn. The average price for a three-bedroom, two-bath home currently is $181,938. A two-bedroom, one-bath house in 1,000 square feet can be had for $132,000 in Henryville.
3) North Carolina Mountains
Who can resist the Smoky and Blue Ridge mountain ranges? Great Smoky National Park is one of the most-visited U.S. national parks. Wildlife abounds in these mountains and residents may raft and hike in the summer and hit the slopes in winter. Currently, the average price for a two-bedroom, two-bath home in these parts is $370,784. For $165,000, however, you can buy a two-bedroom, two-bath. 1,096-square-foot house.
4) Palm Springs, California
Golf, tennis, swimming, biking, year-round great weather (if you like it hot in the summer), cool architecture, shopping, an aerial tram to 54 miles of hiking in Mount San Jacinto State Park all make Palm Springs a magnet to second-home buyers. The real estate downturn created a boon to bargain-hunters in the desert town. The average price for a two-bedroom, two-bath home is $412,345. But you can buy a two-bedroom, two-bath condo in 2,028 square feet for $244,000. Or a three-bedroom, two-bath single-family home in 1,342 square feet for $214,900.
5) Orlando, Florida
Why have a vacation home here? Universal Orlando, SeaWorld, Disney World, Downtown Disney, for starters. It's a hub of high-tech, aerospace and tourist industries. Florida was hit hard by the real estate bust, so bargains abound in several areas of the state. In Orlando, the average price of a two-bedroom, 1-1/2-bath home is $128,555. A two-bedroom, two-bath condo in 1,181 square feet currently is available for $69,000, and a two-bedroom, two-bath condo in 1,091 square feet is for sale for $75,000.
Kelly also recommends checking out Nevada and Arizona, where there are "wonderful bargains," including homes for under $100,000 in Phoenix.