9 Tips for Buying a Second Home
9 Tips for Buying a Second Home
The housing market may go through ups and downs. However, the demand for will always always remains remain strong since the population is always getting larger. When you know the right way to select a property, you can reap a number of benefits from the housing market. Whether you are looking for a second home for vacation or simply looking for a secure place to invest, the following tips can definitely help you make a smarter investment.
1. Do not buy under an impulse
Buying a house is a serious business. Therefore, one of the main things to avoid is buying under an impulse. Do not make any purchase without thinking it over very seriously. If you do so, you may end up spending more than you can afford, put money in a property that really does not much value in the market or end up with something that you may not even need.
2. Think about the long-term goals
The second house you are buying should be consistent with your lifestyle. For example, you can buy a property in a place that can be perfect for weekend getaways. Or this second home could also be your place to spend the days of retirement. If you intend to use it for the latter purposes, you should also check out the accessibility to other nearby areas and the availability of various facilities that you may need during your senior years, mainly health care.
3. Do a thorough research of the area
Even if you are just buying a property for vacation purposes, it is important that you get to know about the surroundings well enough. This will determine your safety and convenience of living in the area. Talk to the locals for their perspective on the area. Is the area you’re looking at somewhere that you would like to vacation yourself at times? Perhaps a beach home, somewhere in the mountains or near attractions or a city. If you do not plan on using all the time and are thinking of renting make sure it’s a place that is desirable for others as well.
4. Hiring a real estate agent
Although you can always take up the task of going through the real estate market yourself, getting help from a real estate agent is always advisable. They are much more familiar with the market values of various properties and can also help you through any legal proceedings, if required.
5. Decide what is best for you
There are so many different types of properties that you can buy. However, all of these require different amounts of maintenance. For example, a condo may be a perfect choice if you are looking for a vacation house. They may not be very expensive to maintain but could come with a high HOA, and also do not offer much privacy for residential uses. Therefore, you may opt for a single-family home that you do not have as many restrictions with. Another thing to remember is condos typically have much less maintenance then single-family homes.
6. Find the best deals
The values of different properties in the market change continuously. Therefore, choose a property that will not lose its value so easily. It would be advisable not to close the deal abruptly without doing a proper background search of what other similar properties are selling for in the market. A very valuable real estate tip is do not compare the home prices where you’re looking at to those of the ones in your hometown. Every area even ones that are nearby may have substantially higher or lower prices than what you’re used to. Learn the market with a knowledgeable real estate agent fireside. Also, more so than not you will be required to put down between 20% – 30% down when financing a 2nd home or investment property. Speak to a qualified lender or bank to find out how much exactly you will need.
7. Calculate the additional expenses
You should not forget the additional expenses that come into play while buying a house. This may include insurances as well as the basic household maintenance costs. For example, if you are buying a property in a hurricane-prone area, you will have to set aside some amount for insurances. Similarly, you also need to be insured for forest fires and floods, depending on the location of your property. At least 2 % of the total cost of the house should be kept aside each year for maintenance.
8. Opting for fractional ownership
If you are buying a property only for vacational uses, you will definitely not be spending a lot of time in it. If it goes down well with you, you can opt for mutual sharing with friends and families so that you can use it mutually. This will also prevent the cost from weighing down too heavily on you. In some areas you may find condo buildings that sell fractional ownership.
9. Tax benefits and renting
If you want to supplement your income through the new property, you can rent it out either partially or wholly. However, for this, the property should be in such a location where you can easily get tenants. You may also have to pay rental taxes on the income. Therefore, it would do good to study the taxation system in the area before jumping in to make a purchase.
This is a guest blog post provided by:
Danny “Wheels” Margagliano is a Realtor. He lives and works along the beautiful beaches of 30a and Santa Rosa Beach and Northwest Florida. Feel free to visit him at https://destinpropertyexpert.comto see some of the beautiful second home opportunities in that area.