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Basics in Buying a Second Home

Dec 02, 2018 09:02PM ● By MED Magazine

By Tracie Storo

An estimated three out of ten homeowners, own a secondary home whether it be for investment or vacation purposes.  Now might be the time for your household to purchase a secondary home. Regardless of the reason, here are some ideas to think about before you sign the deed.  

Know Your Why

Figure out what you are wanting to do with your second home.  Are you looking to invest your money? Are you looking for a vacation home that you visit a few times a year or a few times a month? Knowing your purpose in buying is important so you can narrow down what you are looking for. The other thing you might consider is, who will be with you?  Are you looking for something for just your close family or extending out to other family and friends to enjoy your home?

Know Your Location

Once you have figured out your purpose, you can figure out how near or far your new property will be.  If you are visiting often, you probably want to choose somewhere relatively close so you spend less time getting there. If you are there less often, you can find somewhere you may have to travel a bit, a true vacation spot.  

Before you make the leap to buy, spend some time in the location so you become familiar with the community and truly know if it is the place for you.  Know the market in the area, so you know your investment is worth it. Talk to locals who can point out the great and not so great things about the area. Also, talk with an expert agent who knows the local market.   

Know Your Budget

Schedule an appointment with your financial advisor to see what you can afford in a second home and if it is a wise investment for your family.  Learn about the tax implications about owning a second home and know the differences if you are seeking your home in another state, there may be some differences. Make sure to consider the maintenance, cleaning and security budgets for when you are not there.  

Know What Will Happen When You Are Not There

If your new home is at a popular vacation spot, you might want to make some extra income.

Remember to consider the income and maintenance in your budget.  You can make more money during those peak vacation times and use it when it’s not so busy. Another option would be to pool your money with family and friends and go in on a home together. Be sure to get this type of ownership done with a professional. This could help fractionalize the costs of having a vacation home.  

Hopefully these basics about buying a second home have helped in preparing you to buy another home. Whether you are looking to invest for the future or spend more time with your family, make sure to take your time and do your research.  

Tracie Storo is a real estate expert with RE/MAX Professionals Inc.