Here is a list of the top 7 items I discuss with any new buyer who is looking for their vacation or investment home on the Outer Banks.
- Be prepared for 20% or more down. Depending on your situation, the bank may require more (like when buying a condo) because it’s not your primary residence.
- You can use up to 75% of the rental income the home generates in order to help qualify you for the mortgage. You will need at least a three-year history. Keep in mind, this will mean you have to apply for an Investor loan which does carry a slightly higher interest rate.
- The entire Outer Banks is in a flood zone. Some areas are in flood zone X which means no insurance is required. Most of our area will qualify for the National Flood Insurance Program, which usually runs less than $800 a year. (Assuming Congress passes the extension this year)
- If you buy a foreclosure, you’ll have to re-furnish the home and buy it as-is. For some reason, the banks just haven’t figured out that the furniture in these vacation homes is valuable and needs to stay.
- The local county and city taxes are very low here. We generate so much revenue from the weekly guests in Occupancy Tax and in Transfer Tax on the sale of a home, that the annual taxes can stay very reasonable.
- Property Management fees vary based on the services you select from the Manager. It’s sort of an a-la-carte situation these days. How much you want the Property Manager to do for you will determine the percentage you’ll pay.
- The Median Sales Price for a home on the Outer Banks in June 2005 was $507,000. In December 2016, it was $315,000. NOW is a GREAT time to buy your vacation home!
For more information on how to get a home of your own on the Outer Banks, call today!
