People may buy a second home for a variety of reasons such as a family vacation home, rental character or as an investment for their future retirement dwelling. No matter what your motivation may be, the following are tips to securing a second home.
Securing a second character to utilize as a vacation home can be a wise investment, and you’ll be happy to know that sales in some travel communities have sky rocketed to levels that haven’t been seen since before the real estate expansion. Several meaningful factors to the increase in sales can be credited to low interest rates, discounted housing prices, and the rise in the stock market. Some areas such as Mercer Island in Washington, Hilton Head Island, South Carolina and Palm Beach, Florida have experienced sales that have nearly tripled since the real estate peak and the figures are expected to increase.
For those with a little additional cash that are looking for a second home, the housing industry may be a more substantial investment than in past years. To ensure that this is the right time for you, you need to make sure that you have your finances and credit in order. Lending institutions have stricter guidelines in place and are going to only lend money to investors with a substantial credit history. You may also be expected to put additional money down to obtain a low interest rate and zero points in loan origination fees.
If your financial future looks substantial, and you’re interested in securing a second home, you need to start by putting together a list of possible locations that are of interest to you and research the area to make positive return on investment (ROI) if you decide to sell within the next five to seven years. You should also decide on the kind of dwelling such as a town home, single family or condominium. A single-family residence does require a little more upkeep, but it may have a better resale value in five years time when current renters are able to become home owners again.
After you’ve found the great option for a second or vacation home, and you’ve negotiated a fair price, you need to find an experienced and knowledgeable home inspector to do a thorough character inspection. This is a vital part of the due diligence course of action and can prevent you from needing to output additional funds for repairs. Consider doing a radon test or a termite inspection at the same time if your possible character is geographically located in an area with granite in the soil or termites are a shared concern. Combining due diligence sets can save you money and speed up the time it takes to ensure your second home is a good investment.