You may be looking for a second home for a place that your family can vacation at or as an investment property to bring in extra money by renting it out or flipping it. There are some considerations you may want to think about before you purchase that second home.
Check The Local Market: Take a look at the prices of homes from the past, present and predictions for the future. Are house prices rising in that area so you can make a profit if you are going to sell it in the future. Are there too many rentals available? Are rentals hard to come buy which could increase the rent you are able to charge? You have to check the average rental prices in the area you want to purchase to make sure your rental price can over the mortgage, taxes and other expenses you’ll be paying.
Maintenance: Take all costs for maintaining the property into consideration. Who will be taking care of the yard work? If you’re renting, find out any safety standards your home needs to meet before you get a tenant into your space. Who is going to check on the home and do any repairs? You may have to hire a property management company to handle these sorts of concerns.
Insurance Costs: Check with our home insurance company to find out if you need any extra coverage you may not have and is different than your primary residence insurance. You may have to pay higher insurance costs if you are renting or it’s a vacation home. Find out before you buy.
Financing: Plan on the lending institution going over everything with a fine tooth comb. Often you need a higher down payment on second homes, plus normally the interest rates are much higher than what you currently pay.
Tax Implications: When you buy a second home to rent out, you have to report the income and pay taxes on this money. You will be able to deduct certain expenses such as repairs, but best to check this out ahead of time.
Are you looking for a second property? Irene has been in the Real Estate field for a long time and has assisted people in second home purchases. Give her a call at 613-858-1151. Buy smart!!