Home Buying a home 9 things to keep in mind while buying a second home

9 things to keep in mind while buying a second home

by Danny Margagliano
9 things to keep in mind while buying a second home

The housing market may go slow at times. However, the demand for new homes always remains at an all-time high. 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 help you make a smarter investment.

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 have much value in the market or end up with something that you may not even need. 

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. 

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 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.

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. 

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. However, they are very expensive to maintain and also do not offer much privacy for residential uses. Therefore, if you intend to use the house for residential purposes as well, it would be more advisable to go for apartments.

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. 

Calculate the additional expense

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. 

If you are the seller there are certain repairs that will be requested before closing. Be prepared to deduct some of the proceeds from the sale to go towards repairs after the home inspection. When the home inspection is performed to even the best kept homes they find issues. So expect some issues. Some small and some large.

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. 

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. 

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