With the price of houses dropping all over North America, coupled with the rise in cheap property through foreclosures, it is clear why many people are thinking of buying a second home. For some, this second home could be a family vacation spot, while for others it represents nothing more than an investment.
However, before you decide to buy a second home, it may be helpful to consider the following questions. The housing market, though rumoured to be gradually improving, can be unstable, and those who do not plan carefully may find themselves losing out. So before you meet with a realtor, ask yourself these questions.
What are you looking for?
It will pay off to narrow down exactly what you’re seeking. Are you looking for a vacation spot that you will use to make lasting family memories? In this case, look for something in an area where you will enjoy spending vacations and that can also accommodate yourself, your family, and whoever else may be tagging along. Conversely, if you want the second home to serve as the place where you retire, look for property that is close to good healthcare facilities and other amenities. Finally, if you are purely interested in investment potential, you can open up your search to include areas with the best prices, lowest mortgage rates, and greatest potential.
How much can you afford?
Because you already are a homeowner, you know how upkeep and maintenance can add up quickly. You will have to go to the house often, check everything out, and make the necessary repairs. Alternatively, you can pay someone to take care of these things for you, but that also can get expensive very quickly. You’ll also need to consider factors like insurance, particularly if your home is located in an area prone to extreme conditions, such as hurricanes, floods, or tornadoes.
Don’t forget the mortgage.
At this point, if you have determined why you want a second home and if you can afford the additional expenses, it can be helpful to start looking into the most cost-effective mortgage. You can find the best mortgage rates today by checking online. That way, you’ll be in a better position to make a decision about whether a second home is a good investment.
Will it pay off?
As with everything, there are pros and cons to owning a second home. If you have carefully considered the extra time and money, as well as how you will use your second home, you can have a clearer picture of the returns on your investment. Other ways you can prepare include looking for a reputable real estate agent, or by researching the homes available, particularly those that have been recently foreclosed, which tend to have significantly lower prices. In any case, research and careful planning will play a major role in investing in real estate.