Many people reach that point in their lives where they are reasonably stable in their personal and professional lives, have started a family, and want to enjoy their leisure time accordingly. You have a steady job, and your spouse has one, too. Your children are at an age where they can start sharing in some of your leisure activities, and perhaps even enjoy themselves on their own while Mom and Dad do something else. This is when you start thinking of a vacation home, perhaps in or near an area that offers many of the activities you and the family enjoy. You start having doubts, though. Can I afford it? Will it be safe if it’s not occupied for extended periods of time. Will we all have enough fun in that area that we would want to keep coming back? All valid questions. If you take into account the 3 most common mistakes people make when acquiring a vacation home, you can avoid most of them. Read on.

Mistake #1 – Buying Retail

If you have been following the news at all since 2008, you are aware of the mortgage crisis and the slew of foreclosures, short sales and abandoned properties this has created across the nation. Why would you then pay market price on a property when with minimum effort you can get a similar house for a fraction of the price?

What to do instead: Use online resources to look at foreclosures, real estate auctions, bank-owned properties and similar opportunities in the area you are considering. You’ll be surprised at the amount of information you can easily find online, and at the prices you will see properties sell for when they are distressed for any reason. This does not mean the property is distressed (in disrepair), though you will want to verify that. It means that the owners, or former owners, were not able to keep up with the payments and are close to losing the property or it has by this point been repossessed (foreclosed) by the bank. Banks are not in the business of owning property, they are in the business of loaning money and making a profit on the interest charged. When that isn’t happening they will accept offers that you may consider ridiculously low, so long as they get the property off their books and recoup some or all of the money that was loaned. Bear in mind that a bank may have made tens of thousands of dollars off of a loan, even if the loan amount is still close to what it was 10 years ago. They will not really be losing money if they accept a lowball offer, even if on paper it looks like they did. Talk to someone local that specializes in distressed properties. They can be invaluable partners when you are shopping around.

Mistake #2 – Thinking only you can use the property

So you followed the suggestions above and are now the proud owner of a vacation home. Your employer gives you 3 weeks of vacation a year, and every now and then there’s a 3 day weekend or similar time off where you can go and enjoy your property. So you let it sit empty the other 40 something weeks of the year, right? Wrong!

What to do instead: If you enjoy vacationing in that area, chances are many other people will, too. In fact, depending on the area, certain times of year you will find the local hotels and rentals are booked solid. So why not take advantage of this? You can easily rent a property by the week for the equivalent of a month’s rent. What this means in practical terms for you, if you play your cards right, is that you get a vacation home for yourself, and someone else makes the payments! What’s not to like there? As with the first mistake, it’s vital that you have someone local that can manage the property for you and take care of any issues that arise. Find a good partner!

Mistake #3 – Thinking you only want 1 vacation home

So you got a vacation home and you’re done, right? Mission accomplished? Why stop at one?

What to do instead: If you’ve been paying attention, you must have realized by now that with what we’ve covered so far, you can easily and quickly do this again and again. Find a distressed property in another area you like, acquire it, use it when you can, and rent it out the rest of the time. Make sure you pick an area where it will be easy and profitable to rent it out by the week to vacationers, and always partner with a local that can find you the property and manage it for you afterwards. You’ll find that at some point these houses will be fully paid off, more quickly if you’ve acquired them as explained above, and the rent money is now going into your pocket instead of paying off a loan. You not only have vacation homes in many great areas, but you are being paid to have them.

We hope we’ve given you food for thought. One of the areas we can recommend to do this, if you’re in the Northeastern part of the United States or enjoy traveling there, is the Poconos Mountain region in Northeast PA. You will find year round activities for almost everyone, skiing, hiking, swimming, fishing, hunting, outdoors in general, NASCAR races and a lot more. And, of course, a large inventory of distressed properties with banks eager to get buyers under any conditions.