It may not be as crazy as it sounds. According to the National Association of Realtors, one out of every three residential homes purchased in 2004 was a second home. Many of these are mountain cabins or beach cottages. That said, buying a vacation home is not something to do on a whim.

You should plan on doing some research before you go on vacation. Perhaps the single most important point to determine up front is why you are buying a vacation home. Are you trying to generate income by renting the property? Would you like to have a place to take your family every year that will likely appreciate in value? Would you prefer some flexibility in location and like to vacation at a different spot each year?

Once youve determined why youre looking for a second home, you can use that information to focus your research. Lets say you live in Washington, D.C., and have decided to purchase a mountain home within driving distance for family use. The web is a great tool for this research. You can look at the area real estate with a simple search on Yahoo!, or other search engines. In doing a bit of research you may find that Wintergreen suits you perfectly as it meets needs for four seasons of sporting activity. The resorts 45 holes of golf, 20+ ski and snowboard slopes, camps for children, bike trails, spa and numerous amenities are exactly what youre seeking. So now what?

Determine your budget. There are a number of ways to do this, one of the easiest starting places is to look into mortgage pre-qualification. Look at those payments and see if they fit within your budget. Dont forget about additional expenses like utilities, home owners fees, insurance and taxes. Determine if the homes you like in the area are within your budget.

Target Your Search. Decide whether you want to build a new home or want to buy one that is ready for you begin using today. Take a look at the inventory of homes in the area and dont forget to check out local builder web sites theyre often a great source of unadvertised properties. The web is a great tool for this research. You can look at the area real estate with a simple search on Yahoo! Going to the example above, you may search Yahoo on Wintergreen custom home builder. Youll find a variety of builders, realtor and other home related sites. Check them all out.

Plan your Trip. Your research likely uncovered a few leads call to set up appointments with builders or set up a half day with a real estate agent. Either way, you should be getting a good look at a variety of homes to get a good feel for what is available in terms of features, quality and prices. You should also plan on spending some time checking out the amenities. Do they include everything you need is shopping convenient, can you get tee times or lift tickets easily, etc.

Double check your math. After all your research and stops during your visit, you accumulated a lot of information and probably modified your preferences along the way. Look at the budget again and be sure youre making the right call. Look at the tax implications of how youre planning on using the property. If youre considering rentals, make sure to consider property management fees, buying furniture, and maintenance. After doing the math again, if the home makes sense, move quickly. Because these homes are often in areas that are appreciating quickly, recreational uses and investors are often competing for the same limited set of properties. One nice upside to this competition once you get a home is that the prices are appreciating at a very quick pace.

Good luck and happy vacationing!