We all love Washington. Our world-class city provides an increasingly eclectic restaurant scene, theater, live music and a diverse array of neighborhoods and architecture. Your barista likely knows who the House Minority Whip is – and probably even has friends who work for him. But even as appealing as our city is, the weather is far from perfect and sometimes we enjoy a change of pace.
Washingtonians who search for a second home have a lot of options. The biggest driver is usually weather, and those who want an easy beach getaway often opt for the Delaware beaches or the Eastern Shore of Maryland. Some want a more rural setting and go out to Middleburg or the Blue Ridge Mountains. Others will opt to take a plane to South Florida or out to their ski retreat in Colorado. The Jersey Shore and the Hamptons are not out of the question, but they are long drives from D.C.
Despite my love affair with carbohydrates, I’m definitely a beach person. After suffering through the polar vortex with everyone else these last two winters, I started my search in Miami Beach and ultimately decided I wanted a quieter locale so I selected a condo in Boca Raton. The funny thing about being a real estate agent is that you never quite know how to stop being one – wherever you go. When on vacation, most of us look at property advertisements in other firms’ storefront windows. After I had furniture, I quickly abandoned my promise to myself to just relax and started handling deals down in Florida as well. Yes, I do have to get on a plane to go to my happy place – but with TSA Pre-check, a two-hour direct flight and Uber in both places, it’s not that much harder than getting to Rehoboth, as long as you book it in advance. Plus, the beach is appealing for most of the year, whereas the season for the mid-Atlantic beaches is much shorter.
What you’ll pay for a vacation home varies tremendously. Town names and zip codes in vacation destinations can span a vast geographic area and price range. Proximity to whatever natural feature is the main attraction (the ocean, for instance) will often factor in. Buyers of beachfront properties or even properties in proximity to water will often have to obtain flood insurance to satisfy their mortgage lenders. That said, not only properties adjacent to water require flood insurance. As we’ve recently seen, inland communities can flood as well. Locales in closer proximity to urban areas tend to command a higher price than more remote ones.
Because buyers are more likely to default on second homes than their primary ones, lenders typically require larger down payments for second homes and there are sometimes different guidelines for financing in “resort” areas. Your mortgage interest may be tax-deductible if the total of your first and second home mortgages do not exceed $1 million, but you don’t have capital gains exclusion on a second home.
Owning a second home has terrific benefits – it is yours to escape to whenever you’d like – and you don’t have to pack a suitcase every time because you can leave all of your accouterments at your destination. You may even be able to rent it out for income off-season, although renting during high season is more lucrative. Just don’t forget that you’re going to have a second electric bill, cable bill, insurance bill, maintenance and transportation costs to factor in to the mix so it may be a pricier proposition than you’re anticipating.
The most important question to ask yourself is how much time you will really have to go to it. There’s no point to having a vacation home if you’re not going to be able to go enjoy it.
Sammy Dweck is a top-producing agent at Evers & Co.’s downtown office and is licensed in D.C., Maryland and Virginia. He also sells property with Douglas Elliman Real Estate in South Florida. E-mail Sammy at Sammy@sammydweck.com or call him at 202-716-0400.