There are many reasons to consider buying a second home. It could be for investment purposes, or merely to have a vacation home to escape to. Whatever the reason, experts agree there are several important factors to weigh before making such an important decision. Consider these five items before making the leap.
Avoid Double Mortgage Payments
Planning to rent out your second home? Don’t be saddled with a double mortgage if you can’t afford it. Make sure you have a financial cushion and be aware of how long you can endure if you’re faced without renters.
Find Quality, Long-Term Tenants
If this is your first time owning a second property, be certain to take your time to find the right tenants. High-maintenance renters can quickly disrupt your life if you’re not careful. You could also consider short-term rentals in vacation neighborhoods, but be aware they can also lose their profits once you’ve factored in your costs, such as ongoing cleaning services, regular maintenance, and booking fees.
Carefully Weigh All Aspects of a Potential Property
One incredible aspect of a home doesn’t always outweigh the negatives. You may love the spectacular kitchen, then realize the master bedroom is way too small. Be sure to weigh all the pros and cons carefully with someone else. Remember, you’re making an investment. It’s important to not overlook any serious issues that can cause a significant financial setback down the road.
Consider the Costs to Furnish and Maintain Your New Home
It may sound obvious, but many prospective buyers surprisingly don’t often stop to estimate the cost to freshen up and furnish a second home. Even paint and wallpaper can add up quickly. Similarly, regular maintenance should also be calculated for each year, including expenses such as insurance, security, landscaping and repairs.
Consider Nearby Homes
The farther away a second property is located, the more difficult it will be to maintain. Always give serious thought to the location of any property you buy. You don’t want to turn your current life upside-down over a new investment.
A second home can be a very valuable investment. Give it the proper consideration it deserves and it will pay you back well in the long run.