There are many successful individuals who decide to buy a second home. Whether it’s a beachside escape or a downtown loft convenient for work, there are a number of individuals who make the decision to purchase second homes. However, buying a second home differs slightly from buying your first one, so there are several tips any buyer should keep in mind before making this big purchase. Remembering these tips can help any individual looking to purchase a second home get the assistance they need to end up with the home of their dreams.
1. Do Not Impulse Buy
When you are financially secure enough to buy a second home, it can be easy to succumb to the urge to impulse buy a second home. Don’t go on a vacation and return deciding to buy a home where you just spent a week relaxing on the beach. Buying a second home requires as much — if not more — research into the property. You need to make sure that you can really afford this second home and that it will fit your needs.
2. Be Realistic
It might be nice to buy a second home on an exotic island, and you may actually be able to afford it, but you need to be realistic about what your needs are, what your long-term goals are and what type of home will actually suit your current lifestyle. Don’t buy the home on the exotic island if you know your schedule will only allow you to fly there once or twice a year. There are multiple factors to consider.
3. Get to Know the Area First
If you are buying a second home in a new location, then make sure that you get to know the area first. Visit the area, and if it is a tourist area, make sure that you visit in the off-season. Do your research, but most importantly. Hire a local real estate agent to help you get to know the market and the neighborhoods as well.
4. Shop Around for a Mortgage
Since this is a second home, applying for a mortgage will likely be slightly different. Plus, you don’t have the same type of rush that comes with buying a first home. With this in mind, make sure that you take the time to shop around for a mortgage. Don’t just settle on the first mortgage that your lender offers you; get a few different offers and take your time to really see what is out there so you get the best deal possible.
5. Look At Your Tax Benefits
There are a number of tax benefits that come with owning a second home that you likely weren’t privy to with your first home. Make sure that you look into these tax benefits and that you are well aware of what they are before you close on a property. For example, if you rent out your second home for fewer than 15 days a year, you don’t have to pay rental income taxes on that property, you also are not allowed to deduct any rental expenses from that home. Make sure that you get all of the tax insights first, before you buy your property.
Keep these tips in mind when considering buying your second home and you will be well on your way to making a smart investment into your future.