4 Steps to Buying a Second Home

Lakeside Real Estate
Published on April 21, 2016

4 Steps to Buying a Second Home

Many people love the idea of owning a chalet in the mountains, a beach house retreat, or a rustic cabin on the lake, but never take the plunge. Buying a second home is a big financial and life changing step that requires a lot of thought. By following the steps below, you can make then decision of whether or not you are ready for a second property, and find out exactly how how to go about preparing for the purchase of a second home if it is the right decision for you.

 

Is a second home affordable for you and your financial situation?

Before you get excited about a cozy cabin on beautiful Smith Lake, you should assess your financial situation and research the costs of a second home, beyond just acquiring a second mortgage. Be aware that some mortgage companies will charge more interest for a second home if you intend to rent out the property as a holiday let, or to a tenant, as financial lenders categorize a rental as a greater risk than a property used as a primary residence.

Are the maintenance, insurance, and property taxes affordable when you are not using the property as a residence? Gas, electric, garbage disposal, and water utility bills all require paying, even when you are not using the property.

As with the property you currently reside, unexpected upkeep and repair costs always appear at some stage. If you like the idea of a large garden for summer BBQs and family get-togethers, you must be prepared for the landscaping costs to maintain the property when you are away from your second home.

It is worth noting that hiring a property manager to keep check of your second home may be advisable, especially if you plan on leaving your property for longer than a few weeks at a time.

You can also consider make this purchase a joint venture with family or friends. After all, who are you going to be enjoying this second home with? If this is something you are considering check out How to Purchase a Vacation Home with Friends and Family, for tips on making this purchase stress free.

 

Pick a location for your second home

The idea of a second home on the beach may sound ideal, but will you have the time to visit your new second home as often as you would like to? Unless you plan on renting out your second home for large segments of the year, it may not be a good idea to invest in a property that you will only be able to use a couple of weeks a year.

If you are already spending a considerable amount of time in a location, and have the finances to afford a second home, then purchasing a vacation home may be a great option for you.

 

ae0850ad82a52cccd9798ce8bbc8ea73

 

Look into insuring a second property

After you have evaluated the real cost of owning a second home, and you know the location you want to buy in, researching the cost and considerations of insuring a second property is next.

The insurer of your current property is a great place to start. By insuring both your properties and any vehicles may make you eligible for discounted rates.

Insurance rates can vary on lots of factors. If your new second home is in an area affected by flooding, or has a swimming pool, especially with no fencing or gates surrounding it, it may mean more expensive rates or no possibility of insurance coverage at all.

 

Find your new second home and enjoy it

After you have looked into all the possible costs of owning a second home and you have selected potential areas you wish to buy, get in contact with a real estate agent and arrange some viewings to find your new dream vacation property.

A second home offers the possibility of enjoying glorious vacation time from the comfort and familiarity of your own home. After spending some time at your new property you will come to realize how cost-saving owning a vacation home is to renting, along with the privacy that cannot be found among the crowds of tourists at hotels and resorts.

A second home that is purchased in the right area can also be a financially beneficial purchase, even if you decide against renting out the property. Depending on how they are used, a second home can also be eligible for some tax benefits. Check out my earlier post for more information on Important Rental Property Tax Considerations.

If you are in the market for a second home, I hope that you consider Smith Lake, Alabama. Located in north-central Alabama it is a convenient location to many, and located right off of I-65. Regardless of where, choose a location that you love to frequent and use your second home as a place to unwind, relax, and experience memorable days with the family.

Let me help you find the perfect second home for you and your family. Contact me today to set up an appointment, and preview the gorgeous lake homes we have here on Smith Lake.

 

Smith Lake

Powered by WPeMatico

4 Steps to Buying a Second Home
Please use a valid email.
Please use a valid phone.
Please fill in all fields.
view now