Maine has long been known as a destination for second homes, especially either along the inspirational coastline or one of the many beautiful lakes.
Currently across the state there are over 1,500 properties for sale that have either owned oceanfront or lakefront.
Of these, the vast majority are priced below $500,000. 691 are located along the ocean and have an average price of $1,022,214 and a median price of $675,000.
When evaluating vacation homes, there are several important things to keep in mind:
Keep costs within the budget: It is important to set a budget and get qualified for a loan before even starting a property search. Secondly, understand how much discretionary income will be available. For example, for a home with a $500,000 selling price the monthly mortgage, taxes, assessments, regular maintenance, homeowners insurance, flood insurance, travel costs, contingency funds and maybe a caretaker could be as high as $25,000 to $30,0000 per year.
It is also critical that buyers not use retirement funds to fund the home; there’s never a guarantee they’ll recoup their money by renting out the property to vacationers.
Determine the frequency of use: The amount of time you are going to spend at your vacation home is very personal and can vary greatly based on how often it will be rented. Distance often plays an important part in this equation. In many cases a home that can work for multi-generational gathering is valuable.
Pick the right location: Make sure you clearly understand what your interests are – since the type of Maine waterfront can vary so dramatically. Many locations on Maine lakes can be extremely remote.
Understand upkeep: A big lawn needs mowing, lots of square footage means more cleaning, a pool requires maintenance — make sure you have a realistic picture of the upkeep a property will require.
Some communities, like Atlantic House in Scarborough, offer all-encompassing HOA that removes these burdens – but at a cost.
Research rental potential and costs: If income is your prime motivation, keep in mind that rental demand and rates fluctuate with the economy, weather, location, number of bedrooms / bathrooms and amenities.
You need to remove emotion from your purchase choice and pick what appeals to the widest target market rather than what your many want for yourself. It is also important to ensure that any HOA allows rentals! Also small details like the permissibility of pets, whether there is a property manager, age limits on children, etc.
For more information, contact Michael@MaineHomeConnection.com