Buying in the fall allows you time to update the property. Many of today’s best values are distressed sales and need some updating to be ready for the upcoming rental season. Purchasing in the fall gives you plenty of time to make those improvements as well as personalize the property. Often a cottage already has reservations in the spring that have to be honored. This leaves a new buyer no time to make updates before the season starts. Sometimes just a few of these updates will dramatically improve the rental income in the first year. Having the time to make these key improvements can make the difference between a successful season and a poor rental year.
Rental income is really not that far away. State law allows the property management firm to begin disbursing rental proceeds at the beginning of the calendar year. Fifty percent of these proceeds can be given to the owner prior to the tenant arriving and the remaining rental proceeds are disbursed after the tenant leaves. With the trend of summer weeks booking earlier and earlier, you are likely to receive a sizable amount of money as early as February. Couple this with the fact that a mortgage payment is usually not due until the second month you own the property; carrying the property through the winter should not be that difficult.
Purchasing in this calendar year may also have tax benefits. Most closing costs are tax deductible and you can take those deductions when you file this year’s taxes. If you wait until the spring to buy these tax deductions do not kick in for almost another year. Your tax advisor can explain how a closing this year could benefit you.
Sellers may also be a little more negotiable. Often sellers plan to have one last summer in their property before selling. They’ve had their fun in the sun and do not plan to use the cottage anymore. In their selling decisions, these folks may take into account the cost of holding the property through the winter and negotiate more than they would in the spring when they already have thousands of dollars in summer rental income on the horizon.
If you are thinking about purchasing in the next year or so, then you should seriously think about purchasing a home this fall. Not only does it make sense financially but you’ll also get a chance to use it before the summer rentals arrive.