Choosing to buy your first home is a monumental decision, if you’re considering buying a second home, put as much thought and care into that decision as you did the first time around. As a seasoned homeowner, you know the work that comes along with owning your home. Consider if you’ll be prepared to make the same commitment with a second home. To help you determine what’s best for you, we’ve put together a few questions to consider before you make the leap into second home ownership.
What is your motivation for a second home? Is it a vacation home, potential rental opportunity, or maybe a place to retire? By defining your motivation, you’ll be able to find a home that is suitable to your needs.
Buying a second home is financially different than buying your first home. Typically, you’ll need a considerable down payment in order to buy. Lenders may require up to 25 percent down.
When determining if you can afford a second home, consider all scenarios. If you plan on renting out your home, will you be able to afford it without renters? Take a close look at your finances and ensure you are in good shape before making the transition to second homeownership.
Although you already own a home and are familiar with the associated costs, have you kept this in mind for your second home? Such additional expenses include a mortgage, maintenance, upkeep, insurance, and the use of a management company.
Owning a vacation home along the beach is the dream for many, but is that same location in a danger zone? For example, is the home regularly hit by hurricanes or in a designated flood zone? If so, these homes will be much more expensive to insure.
Like buying your first home, the relationship you have with your second home should be a healthy one. Be confident in your decision before you choose to buy. Consider if you’ll be happy visiting this specific location year after year. Make sure your home is a good investment and will retain its value over the course of your ownership.
If you’ve answered all these questions and feel confident second home ownership is for you, make your move! If you’re still unsure, avoid an impulse buy and review your options.