One of the most significant milestones in life is buying your first home. But so is buying a second home. Some purchase a second home as their vacation property. Others buy a second home as a long-term investment. Whatever the reason, it’s important to assess the soundness of your decision based on factors that will allow you to enjoy your new property in the years to come.
CHECK YOUR FINANCES
First and foremost, check if your bank account can support the purchase and maintenance of a second home. Think of the financial checklist you prepared when you bought your first house. Apply the same when it comes to a second purchase, such as having enough for a down payment, maintaining a sterling credit score, having the capacity to pay HOA fees, property taxes, and maintenance costs. Plus, the ability to pay for a second mortgage if you’re still paying for the first.
IDENTIFY YOUR REASON FOR BUYING A SECOND HOME
If you want a vacation home, location is key. Buying in a tourist spot will affect the price of the property, as well as impact your privacy and the rental potential of the home. If you plan to rent out the home, the income stream can offset expenses, be eligible for tax breaks, and help pay for the mortgage. You’ll also need to hire a property manager if you don’t want to deal with the administration of a rental.
If you want a place that’s secluded, the long drives or longer treks might quickly lose their charm. A secluded location may also mean higher travel costs if you plan on visiting often. Consider the year-round weather as well – is the area prone to hurricanes, flooding, or seasonal fires?
CONSIDER MARKET TRENDS
Which way does the wind blow now and in the near future? Do you see a decrease in market demand or activity? Are there enough houses for sale in the area you’re interested in? How have prices risen and fallen in the last several months? What are the median values of homes in the area? If there are fewer buyers, lower market prices, an increase in inventory, and renewed or increased economic activity or development plans in the area, factor everything in when you make your decision. Think about the impact of the bigger picture such as interest rates and global trends on your purchase. At the end of the day, however, it’s best to consult a Realtor for advice when making decisions concerning the real estate market.
CONSIDER BUYING A SECOND HOME BEFORE YOUR FIRST
If you live and work in an area where home prices are a bit too rich for your blood, consider buying a second home first in more remote locations. This has been a growing trend among first-time homebuyers who work in cities with eye-watering real estate prices. To fulfill their dream of owning a home, first-time buyers are purchasing vacation homes in affordable areas first, while continuing to rent full-time in the city they work in. Buying a second home first is an option that’s more affordable, has the potential to become a source of passive income, and offers you a ready place to stay for weekend getaways.
If you want a second home in a place with pleasant year-round weather, explore La Quinta vacation homes for sale. Seasoned real estate agent Kathleen Galigher has years of experience serving clients in the La Quinta and Indian Wells communities.
Check out homes for sale in La Quinta, CA today. Call 760.567.7822 or contact Kathleen here.