Whether it is for investment purposes, vacation purposes, or retirement plans, there are many reasons why one may consider purchasing a second home. Although the price may be right and the thought of having your very own vacation getaway or investing in a new property is exciting, weighing the pros and cons of owning a second home is important. Here are five things to consider when thinking about purchasing a second property:
Buying on Impulse:
Impulse buying a package of gum or your favorite magazine while in line at the grocery store is acceptable. Impulse buying a second home while on a vacation high is not. While it may seem like a great idea at the time to purchase a second home at a good price in paradise, one should resist the urge and do their research. Get to know the area before buying, talk to the locals, or hire a local real estate agent to work with you to ensure that this decision is made with a clear and well informed mind.
Thinking Long Term:
The opposite of impulse buying is thinking long term. When deciding to purchase a second home, it is important to assess how this home will fit into your long term or future plans. Are you looking ahead into retirement years? Make sure you are looking for a place in a retiree friendly community with good health care systems. Looking for a weekend get-away? Be sure to take into account travel time and gas expenses and shop around in areas nearby.
Finding the Right Home:
Are you looking for a single family home, townhouse, or condo? Deciding to purchase a second home is a big decision, so making sure that you are purchasing the right kind of home is crucial. Look into factors such as monthly finances hand how much maintenance will be required when deciding which type of home is right for you.
Factoring in Expenses:
When reviewing costs for your purchase, it is important to remember to factor in all expenses that come with owning a second home. This includes insurance, maintenance, property taxes, utilities and more. It is important to remember that things such as insurance costs and taxes vary depending on location as well. Take time to calculate all expenses involved in the process to make sure you don’t find yourself just scraping by to pay the bills after your purchase.
Renting Your Home:
One consideration to be taken into account when purchasing a second home would be the possibility of renting out your home to visitors. Renting your home out can be a good way to earn extra money towards your monthly mortgage and housing payments, however, becoming a land lord comes with responsibilities and additional insurance costs. Be sure to look into landlord/tenant laws and the Fair Housing Act when exploring this option.