How to Buy a Vacation Home in Oregon
Tempted by the thought of buying a second home in Oregon as a vacation getaway? Buying a vacation home in Oregon is a popular and profitable investment. Oregon is one of the country’s best places to live and has dozens of world-class vacation destinations and stunning properties.
Our experienced Oregon real estate team shares their best advice on how to buy a vacation home in Oregon.
Can you afford to buy a second home in Oregon?
As a current homeowner, you know all about what it takes to purchase a home. When it’s your second piece of property, there’s even more to think about.
Financial advisors typically recommend only buying a second home if you can pay cash. At the very least, a significant cash down payment is advisable.
Second homes don’t qualify for government-backed mortgages like a Federal Housing Administration loan or Department of Veterans Affairs loan. The ultra-low or no down payment deals these loans offer are off the table.
Conventional loan lenders usually want a 20% down payment. And if you plan to rent out your property, a 30% down payment is more likely.
Finally, conventional lenders often require a credit score of 620 or greater. You’ll probably also need to show you debt-to-income ratio is below 40%. Some lenders may even want you to have 6 months of payments for both of your property already set aside.
Insurance and taxes
Once the purchase is squared away, there’s more than just monthly mortgage payments to consider. Can your budget also handle property taxes, insurance costs, and miscellaneous costs like utilities, HOA fees, and landscaping?
Don’t forget about typical home maintenance costs or emergency repairs. As a current homeowner, you know all about how these expenses can pop up unexpectedly. Keep this in mind as you review your second home finances.
Additionally, as a vacation property, chances are this new home will sit empty for at least some portion of the year. It’s dangerous for a home to sit alone for too long, so you might want to consider a caretaker or groundsperson to ensure security.
Make sure your finances can support the cost of furnishing a new home.
Don’t forget about all the “toys” you might need to make your vacation property complete, either. For example, snowmobiles or four-wheelers for the mountains, surfboards and other water toys for the beach, or horse stables and riding supplies for country properties.
The best places to buy a vacation home in Oregon
If you’re a current Oregon or PNW resident, then you already know of the many fantastic places to vacation throughout Oregon. There’s an environment for everyone — from coastal properties and desert oases to mountain getaways and riverfront properties.
Some of the most popular areas in Oregon to purchase a vacation home are:
- Cannon Beach
- Mt. Hood
- The Willamette Valley
- Hood River
Just because you fell in love with the Oregon Coast during your last vacation doesn’t mean it’s the right spot to purchase a vacation property. The same goes for any vacation destination you’ve enjoyed in the past.
Vacation has a way of romanticizing reality. Really get to know a city and consider what it would really be like to be part of that community before determining whether or not it’s the best spot to purchase a second home.
You should also consider how easy or difficult it will be to get to this new vacation home. Does it require a flight? Or is it easily accessible by car for a quick weekend trip?
Where’s your dream Oregon vacation home destination?
Identifying what you need from your vacation home
You’ve found the city, now how do you choose the right property? Start by thinking about what you really need and want out of your vacation house:
- Do you want a quiet and relaxing neighborhood?
- Is privacy a top priority?
- Do you want a cozy cottage or cabin? Luxury condo? Expansive farmhouse or country estate?
- Is walkability important? Do you want to be close to cool shops and restaurants?
- Is boat access or a dock necessary?
- Do you need to be nearby to medical resources?
- Do you have specific storage requirements for things like large vehicles, animals, or hobbies?
- Is there enough parking?
- Does it fit your design style and aesthetic?
Of course, there are other things you can consider based on your specific vacation home dreams. But these questions are a good starting point to get you in the right direction and narrow down your search.
Planning to rent out your vacation home?
Don’t assume that renting out your vacation home half the year will be a simple or even legal option.
We already discussed the different loan requirements of renting out a vacation property. There may be additional limitations if you are purchasing the property as an out-of-state resident.
Additionally, there are tax implications to be aware of — particularly Oregon’s short-term rental tax laws. Your vacation home’s address will help determine tax jurisdictions, which taxes you need to collect, and your tax rates.
If renting the home out as a vacation rental is one of your goals, talk to your real estate agent. They can help you understand what’s allowed and what legal and tax implications to consider.
Find your vacation home with the help of a real estate agent
You should always partner with a real estate agent to buy a home — whether it’s your first or second home.
PEGGY HOAG REAL ESTATE is the premier broker for luxury vacation homes in Oregon. We offer decades of real estate experience to help our clients find top vacation properties fitting their exact needs and dreams.
See some of the vacation properties currently for sale or contact our team and let’s talk about what you’re looking for.