Beginners Guide to Purchasing a Second Home

BY MELISSA EISENMAN

From having a space to enjoy on your time off to making some extra money, there are many reasons people purchase a second home. However, owning a second home comes with responsibility. Before you take the plunge, it’s important to determine which type of property would most benefit your lifestyle. Be realistic about how much time and energy you can commit because maintaining two properties can be challenging.

First, choose the type of second home you want to purchase. Do you want a vacation spot? Do you want a place to go when the weather gets cold? Or would you like to make money by flipping a home or renting it out?  

After determining your purpose, then you may choose which type of second home is best for you. There are typically three types of second homes: a vacation home, seasonal home or an investment property.

 

Vacation Home

A vacation home is a second home purchased to use with friends and family during time off.

Seasonal Home

A seasonal home is a property where you reside for a season or two. Seasonal homes in warmer climates are quite popular for people with a permanent residence in northern cities looking to escape the cold winter months.

Investment Property

An investment property is real estate purchased with the intention of gaining a return on the investment. This could mean one of two things, you purchase a brand-new piece of real estate property for reselling or rental income purposes, or you purchase property with the goal of making upgrades to it, to later gain your return.  

 

Buying a Vacation Home in A Managed Community

There are countless benefits to purchasing a home that is part of a managed community, and this is especially true for buying a second home. Beyond giving you additional resources and a second pair of eyes to watch over your investment, it also helps ensure steady home values. In a managed community you’ll have professionals to take care of off-season maintenance.

Living in a managed community not only adds value and security, it also allows you to spend your time enjoying the home instead of doing yard work or other chores. It’s likely that you’ll have neighbors, who hopefully become your lifelong friends, who live there full-time, so you can trust them to look after your property while you’re away. If you plan to rent out your property in a community with a HOA, I recommend offering long-term rentals instead of short-term rentals. Short-term renters don’t typically take care of your home the same way you do, and you don’t want to lose value. Keep in mind that rental rules and regulations are different for each HOA, so make sure to check with your board of directors before renting out your property.

Make sure it’s easily accessible. Before purchasing a second home, be sure it’s easy to get there. Confirm there are nearby airports and frequent flights to and from both properties so it won’t be a hassle to travel.

Know your rights as a buyer. Only work with a professional real estate company, agent, and a licensed real estate attorney throughout the purchasing process.

Know the area. It’s important to know exactly where you’re buying a property. Do your research, talk to locals, join online forum groups, and determine what will best suit your future lifestyle needs.

Budget properly. Budget for everything correctly and factor in any additional costs– like extra fees for real estate agents and closing costs.

Use local businesses. If you’re purchasing a home that you plan to flip, use local businesses with local prices. Local contractors that are native to the area have unique knowledge and will make sure your home fits in with the surrounding areas.

This article was originally published on Associaonline.com and is republished with permission.

Melissa can be contacted at Associa Mexico, Costa Azul, San Jose del Cabo. Cell: 624-157-4799.