Have you or your partner considered the possibility of purchasing a second home? Maybe it’s for work purposes, vacation, investment, or all of the above? Here are some things to consider when purchasing a second home.
Obviously the first things to consider when buying a second home is if you’re financially stable enough to do so. Only invest in a second home if your job is secure and doesn’t compromise other monetary investments and bills. A second home is an asset, not a necessity. In the long run a second home could benefit you economically, but in order for that to happen you must already be financially sound.
Also consider the investment benefits of buying a second home. Does it save you money from renting out a condo or hotel? Is it possible to rent the home while you’re away?
Although the purchasing of vacation homes has been on the rise in recent years, this could just be a phase. Talk to a real estate investor or banker prior to buying. It’s no secret the housing market is every-changing and can reap great rewards or extreme losses. Ask for their opinion about where the current market is and what direction it seems to be headed. Although no one can perfectly predict the outcome, you won’t be kicking yourself later for not seeking out advice.
Besides paying for a second mortgage, something often neglected when purchasing a home are the added costs of keeping it maintained. Can you afford an extra utility bill? Do you have someone to help with the landscaping while you’re gone? Also how do you plan to keep it secured when it’s vacant? (Link here) There are services that can help you preserve your home but these added costs are all things that should be considered.
Does it make sense?
Make sure this isn’t a spur of the moment decision. It’s a huge purchase. Will your family visit the property more than once? Will it save you money in the long run instead of staying in a hotel on business trips? Does the investment feel right? If you don’t feel confident answering these questions, it probably isn’t the right time to buy. But, if the benefits seem to outweigh the cons then we say take the plunge!
Buying a second home can be quite the adventure. It could help you make everlasting memories with loved ones or a relaxing getaway. No matter if it is for investment purposes or a treat to you, be aware of the potential risks that come with acquiring a second home.