Broker Check

To Buy or Not to Buy

September 16, 2020

My wife and I enjoy traveling in our RV. It provides a great way to see this beautiful country, and we like to take advantage of some unique biking locations. Recently, we stayed in Northern Michigan at a terrific campground that offers RV sites for sale - something becoming more popular, apparently.

While we discussed the opportunity to own an RV site, it reminded me of discussions I've had with many clients over the last 20 years - to buy or not to buy. The conversation may have been related to purchasing a condo in Naples or a home in Scottsdale but the analysis was always the same.

  1. Financial - It may seem obvious, but can you afford it? Keep in mind the purchase price is only the beginning. Be sure to factor in property taxes, HOA fees, maintenance, and repair.

  2. Income potential - Will you have the opportunity to rent out the property when not in use? If it is a property in Arizona, you may not have much demand in the summer months. If it is a condo in Breckenridge, there may be a softer rental market in the off months. How realistic are the rental projections? Don't be overly optimistic unless you have historic rental activity that can be verified.

  3. Usage - Will you make good use of the property? Do you have other commitments that impact your ability to visit regularly? Also, consider if family and friends will be able to visit. Is the property tough to get to? I have had clients realize that their kids and grandkids couldn't visit as often as they hoped, which caused them to limit their own use of the property.

  4. Resale - When the time comes, and you decide to sell the property, will there be a strong resale market, or will you be stuck with it for longer than you want?

Once all of these items have been thoroughly evaluated, it is time to compare buying vs. renting. If you want to winter in Florida, you may find that you can easily rent in the same area you are considering buying in. Paying a fixed rental amount per year may be more cost-effective than buying, especially when you consider the flexibility renting provides. There are a lot of great places out there, it just takes some work to find that opportunity that is best for you.

As for my wife and I, we will continue our search for the perfect place.