Purchasing a Second Home – Real Estate Advice

The US Real Estate Market

The real estate market has been through many phases in the last decade, peaking to record highs in the mid-2000’s and taking a subsequent decline through the following years. For some, it was a time to seize upon the reduction in housing prices. Others faced difficulties in renting, selling, or paying for their homes. It became difficult for people to own even a single home, let alone several.

But now the economy has turned around somewhat, and there is a reviving interest in owning multiple pieces of real estate. For those who are looking into purchasing a second home, we’ve got a couple of things to consider first so that you can make the most well-informed decision possible about your purchase.

Purchasing a Second Home

The first thing that needs to be considered when you are looking into purchasing a second home is your reason for purchasing. Is it a financial endeavor, or it personal? How often will you be living in the home, or renting it out? Do you see yourself owning this property in 10 or 20 years? These are all questions that need to be considered first before you buy a second home. While the idea of owning a second home is an exciting one, buying one without a clear plan in mind might lead to unexpected difficulties.

Financing a Second Home

Once you’re sure of why you want the second home, the next thing to consider is the financing. Is the down payment for the home readily accessible to you? How much do you have to put on the line to finance the house? A vacation home isn’t a very good reason to refinance your car, after all. And if you’re getting into the house for financial reasons, how easily can you recoup the loss in case of disaster? Can you insure the house? Remember that insurance in vacation or resort areas runs much higher than insurance in a suburban area. Since a second home is a significant financial undertaking, you’ll want to take full measures to protect your home.

If you’re getting into your second home for profit, there are a host of things you’ll want to look into. There are certain tax laws which will affect that decision, as well as other factors like an understanding of the housing market in the area, property managers, and so on. Certain areas are better for financial investments than others.

Is this home a vacation home, or perhaps a retirement home? Consider the long term circumstances of real estate in the area. Millenials, the newest generation of homeowners, are known to favor certain areas of the country.

Types of Second Homes

Once you decide on the area and your reasons, the last thing to consider is the type of home you’re looking to purchase. Are you intent on having a single-family home and all of the types of considerations that requires? If you’re going to be using the home only part-time or you’re looking for a good rental property, you might consider getting a condominium. These types of units are easier to get tenants into and out of so that you can use the place for the other part of the year.

While single-family homes are the image of classic homeownership, you may also consider alternative forms of property, like a duplex. This can allow you even more options for living/renting than you get with a traditional single-family home. It’s also a good backup home in case of emergency. You can get a revenue stream by renting one half of the duplex, and live in the other half.

Regardless of the type of home you choose to buy, the one thing you need to have for sure is a plan. A clear idea is key when it comes to purchasing a second home. It only takes a little bit of bad luck to turn your good fortunes into a huge loss, so make sure you have the commitment well thought-out and that you’re capable of handling setbacks. If you prepare yourself properly, the joys of a second home can be one of the most fulfilling purchases that you’ll ever make.

For questions about purchasing a second home in Winter Park, CO please contact Grand Park today.