Buying a second home is exciting. Whether you’ll live there for a significant portion of the year or just stay for vacation, taking on a second property is a big decision. Even so, real estate numbers are showing steady interest in vacation homes and investment properties. Back in 2007, one-third of all properties sold fell into these categories. This shows that, even despite economic difficulties, people recognize the potential with another house.
Make a Smart Decision
– Even if owning a second home is your dream, it’s important to consider all the angles when making this decision. Whether you’re searching for a place to retire or the next big business venture, you should carefully think about the following:
– Is it the right time to buy? You need to consider your personal goals, but also market conditions, affordability, personal finances, other obligations, etc. If you plan on flipping the house, for example, you don’t want to purchase one an area where it will take months or years to sell.
– Do you know what to look for? Buying a second home isn’t like purchasing your primary residence, especially if you have specific goals for the property. Do plenty of research about the home itself, but don’t forget to take the location into account, as well. You should spend time talking to locals, visiting the surrounding towns and cities, checking out competing properties, and finding out about local laws that could affect your plans.
– Consider financing options. Mortgage experts say you should have a 20% down payment ready for most second homes. It’s not impossible to finance with smaller amounts, but it is more difficult. Make sure you’re fully aware of your financing options, as well as their pros and cons.
– Educate yourself about property taxes. There are lots of costs and tax implications associated with your home – perhaps even more so for a second property. Know exactly what the hidden costs are and what tax breaks you could claim depending on how you use the property.
Research alternatives to buying. Even if the idea of buying is exciting to you, it may be smarter to invest in other forms of ownership at first, particularly if you’ve never been in charge of multiple properties. Timeshares, condos, and vacation clubs offer a taste of second property ownership with smaller financial obligations.
Are you looking for help purchasing your second home? Look no further than the real estate experts at the Century 21 – Kris Powell team.