Purchasing a second home can be exciting and it can mark a major milestone in your life as a double homeowner. When it comes down to it, many people decide to purchase a second home – either as a vacation home or an investment property. As an investment property, you can rent out the home to tenants or you can turn your home into a vacation rental. Turning your second home into a vacation rental can be especially lucrative if the property is near or in a popular tourist destination. In fact, renting out the home may garner a nice profit – on top of covering the mortgage. Before you purchase a second home, though, you may want some home buying advice. Here are five things to consider before purchasing a second home.
- Know why you are purchasing a second home. Before you purchase a second home, you want to have a good reason for doing so. For instance, if you are recently retired and want to spend more time in the country, it may be smart to invest in a second home. If you want to have a secondary source of income, a second home can make a great rental property.
- Don’t purchase based on a gut instinct. When it comes down to it, you don’t want to purchase a second home on gut instinct alone. This will only wind up getting you in trouble later on down the line. It may seem like an affordable deal, but what happens later when you realize that the home needs extensive work. If you purchase a second home on a whim, you could easily wind up with a lemon.
- Make sure to team up with a real estate agent. It is also critical to team up with a real estate agency, like David Painter Properties of Keller Williams, because buying a second home may require the expertise of someone in that industry. A real estate agent will also come in handy when you are looking for a home in a certain area or community – the agent will know the real estate atmosphere and he or she will be able to guide you through the process more efficiently.
- Don’t settle with one mortgage plan. When you are looking for a mortgage for a second home, you don’t want to settle with one financial institution. There is a good chance that if you shop around for a mortgage, you will find something that is more reasonable for your budget. When it comes down to it, purchasing a second home can be big financial commitment, so you want to be able to manage all your monthly costs accordingly.
- Calculate all the miscellaneous expenses. When you purchase a second home, there may be some other expenses that you have to be responsible for, like remodeling and adding utilities. This is especially the case if you purchase a home in a more remote location – you may need to hook up electricity from a generator or you may need to install a septic tank. In the end, you want to calculate all these costs before you go into escrow.