Terri Ramsey Beavers Are you looking to get away? To getaway to a place of your own with the sole purpose of relaxing and taking it easy? You are not alone, more and more people are investing in a second home than ever. But, it is not all plain sailing and there are lots to consider when taking the plunge and putting your hard-earned savings into a second property.
Are you sure you know why you want to buy this property? Do you really want to use this property, in this location, for the next decade or so? Or perhaps it is a long-term investment, or simply a status symbol. Be sure you know your why and are confident in your reasons as it will help you throughout the decision-making process. Have you dreamed of a second home that is near the beach and if so can you afford it? After all, luxurious properties near water come with a luxurious price tag. Can you afford everything you want from this second home right now? If the property you really want and the reasons you want it are unattainable at this moment, then perhaps you should be prepared to compromise or reconsider whether now is actually the right time.
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Considering the timing of your purchase has never been more important than in the wake of a global pandemic that has seen job losses and livelihoods rocked. A second home is a huge undertaking that requires a considerable investment. You will want to be confident your industry or sector is and will remain stable.
If you are confident that now is the right time for you to be making this investment then it is sensible to have your finances in order. You will need to have a healthy store of savings behind you when it comes to buying a second home. If you don’t intend to buy your property outright then the downpayment required is likely to be more on a second home, it is advised you have a down payment of 30% of the purchase price available. There will also be additional requirements that come with a second mortgage so be sure to fully research what is available to you and all of the requirements you have to meet.
You will, of course, also be liable for the monthly repayments on the property. You need to be sure you will be able to cover this cost or if you don’t intend to, that the property has a good rental option for the times you are not using it. It is always worth researching the local rental market and considering what options you have. If your property can benefit from the additional income when you are not using it then is this a compromise you are happy to make?
Top Tip; don’t forget the additional fees that come with property ownership, not just on purchase but on property maintenance too.
If you are confident that now is the right time for you and you have taken into account all of the financials then the greatest tip left is to truly research the area you intend to buy the property, and not just for rental purposes. Is it somewhere you know you want to return year on year? Is it family-friendly? Safe? Close? Buying a second home is a big commitment for both your finances and your time. Making sure it is a place you want to spend your downtime is arguably the most decisive factor.