You're vacationing in the Rockies in a log cabin complete with hot tub to soothe your weary back after a day of high-altitude hiking, or you're renting a comfortable bungalow on Lake Huron's shoreline.

The idea inevitably hits: Could we buy this place? 

It's not uncommon for many vacationers to find themselves checking out the local real estate listings in between boating or sightseeing. However, many vacationers aren't just looking, they're buying!

The National Association of Realtors reports that in a study, buyers purchased 377,000 second homes (1998).

Sales of second homes, in fact, have gone up 27 percent each year since 1995.

Overall, second-home purchases now total more than six percent of annual home sales, many of them trial retirement homes. 

Realtors attribute much of this increase not only to the economy, but to demographics as the Baby Boomers move into their late 40s and 50s.

This group alone, according to the Realtors' study, is expected to generate 100,000 to 150,000 new second-home housing starts every year for the next 10 years. So is a vacation home the right buy for you?

It depends on how you plan to use the home (recreation versus retirement nest, for example) and your balance sheet.

For example, if you are thinking about buying a condominium in a popular recreation area, where rents and prices are usually high you may need to consider renting out your property part of the year to help cover the mortgage.

In such desirable areas, however, you can almost always count on being able to resell if you need to. 

Other tips for buying a vacation home:

Research an area thoroughly.

The better you know an area, the more predictable the consequences of buying there. Make sure you talk to other property owners, not just the local real estate agency.

If you purchase in a more remote area, for example, find out if there are security concerns with homes that are empty part of the year.

Check out resale statistics, too, as well as property taxes. Poor resale rates could prove burdensome if you need or want to sell in the future.

Onerous property taxes may tip your balance sheet against the purchase. 

Look carefully at time-share properties.

Many now offer exchange options in which you can exchange your time at your time-share for time at another time-share for a modest fee. However, time-shares are most economical if you can purchase the share outright, as opposed to financing, and of course, if you actually use the property.

Purchasing a time-share in a popular area is wiser than buying one far from the madding crowd in terms of future resale.

And don't forget the cost of getting to your time-share. Can you drive or is air fare involved? 

Get good tax advice.

If you rent out your vacation property part of the year, that rental income is added to your own income. However, you can deduct some of the expenses connected with renting out your own property, such as paying for a cleaning service or a rental agent.

Cover all the tax bases because in some cases, it may make more sense to continue renting rather than buying.

By Liz Poppens 

Other tips we suggest you check out:

• Medical services and 911 availability
• What's available locally in the winter months for an owner to do
• Wells and septic tanks vs. municipal water & sewers
• Amalgamations of local towns & areas/politics
• Snow removal/road maintenance
• Erosion issues
• The area's overall philosophy about real estate development
• Drinking water conditions
• Noise pollution? Motor boat or canoe?

Should you consider exploring an area to look for a 2nd home call us first and we can put you in touch with the area's best Realtors who will be glad to email or mail you lots of helpful info.

Also a phone call from a knowledgeable Realtor can save you hours of time.