Purchasing a Second Home- Things to Consider
Have you been thinking about purchasing a second home, possibly an investment property or maybe a retirement home? Perhaps you keep hearing about how real estate is a great way to invest your money, or you want to take advantage of real estate opportunities. Have you spent countless hours looking at available properties, wondering where to buy, how to find the best value, but are unsure? Are you having trouble narrowing down your options? Are you ready?
The housing market has drastically changed over the past 10 years, from housing boom to bust, with record foreclosures. The question is, “Is now the right time to invest?” And if yes, should it be an Investment property, a retirement home, or both. The combination of relatively low home prices and interest rates makes this one of the most attractive times in years to become a real estate investor. Here are some topics to consider when exploring the opportunities:
- Decide first what type of property you would like to purchase? Is it a maintenance free condo or a single or multi- family home? Consider the size, number of bedrooms, bathrooms, square footage, and lot size.
- Location, Location, Location! Buying a property near a town or city with access to quality healthcare and low crime rates are just a few of the criteria you should consider when purchasing a second home. Whether you are purchasing an investment property or a retirement home, consider markets that have appealing characteristics such as great climate, lower living costs and taxes, extensive cultural amenities, and quality transportation services.
- Know your financial situation: Can you afford to become a property investor? Know your capital and get your personal finances in order. Also, have a clear plan of what you would like to accomplish, most lenders want to know your plans for the property. Invest in a property that provides both rental income now and capital appreciation later. Consider the differences between retirement home loans-versus-investment property loans. Be prepared to pay up to a 35% down payment. Mortgage lenders will charge a higher interest for investment properties because they assume the property will depreciate faster. For more information and advice you can visit //www.mortgageadvisors.org/.
- Seek expert help: discuss market opportunities with a real estate agent. Consider the advice of a property manager to help you assess the potential maintenance cost of the property. For more information on property values, real estate advice, market trends, and more, visit: www.zillow.com; www.realtor.com.
- Research laws and regulations: State Landlord-Tenant laws, landlord liabilities, tax deductions available to landlords are all important topics to understand. For more information regarding laws and regulations you may visit www.nolo.com.
- If you are unsure or have not found your ideal property market, I invite you take a test that may help you find it. Click on the following link: //money.cnn.com/quizzes/2012/pf/retirement/best-places-to-retire-quiz/index.html.