Buying your second home is an exciting event, even more than getting your first one. There are many considerations though, if you can afford a second mortgage, other bills to stay on top of, the type of home you want, or additional maintenance and other costs that may come into play. Take a look at these tips to help you make that important decision.
- Prioritize the location.
The sales price is not the main driving force in real estate. It is location. Price carries weight but not as much as where your second home will be. How often you plan to use it and how soon can you get there will have a direct bearing on its location, too.
- Determine the type of home you are after.
The type of home you want to buy for a second home also involves location. For example, a mountain vacation home gives you a choice between small, affordable cabins or high-end ski resort residences. Alternatively, there are people who buy a second home as an investment. If you plan to rent it, location remains the top consideration. Remember to run a comparison of the mortgage, upkeep, and other costs, and subtract it from the monthly rent you can expect to receive to guarantee a return of your investment.
- Set a price range.
Keep yourself from getting swept away by the grandeur of it all. Remember that you must finance your second home. If you intend to finance the purchase, your maximum price might be affected by interest rates, the amount of your mortgage payment, and taxes. Consider all these when looking at the sales price. Also, pay attention to the tax breaks and home credits since they are likely to be smaller than your first home purchase.
- Look for an experienced real estate agent.
A local, experienced agent can give you insight on the property that you want to buy. For example, if you consider the long-term or resale value of your second home, your agent can tell you price histories for comparable homes and how recent sales have fared, as well as resale prospects for your targeted home. Of course, know your agent because it is wrong to think they always have your best interests at heart!