7 things you need to know before buying a second home
Whether you find yourself daydreaming of a beachfront paradise or a backcountry lodge, a second home can provide a welcome escape from everyday life. And while it’s fun to start thinking about all those warm, snow-free winters or family reunions in the sand, purchasing a vacation residence is a huge financial decision.
Here are seven tips to consider before buying a second home:
1. The changing nature of second homes
Traditionally, owners of a second home might use the property only for vacations, typically just staying for the weekend during the school year and longer stretches during the summer or holidays. But the changing realities of work and school are shifting use patterns for second home users, leading new owners to stay for weeks and months at a time. As such qualities like high-speed internet, home offices, and learning areas for children are important to keep in mind as you consider a second home.
2. Don’t rush your decision
Location, view, features and other amenities determine whether a vacation home is a wise investment or a financial sinkhole. Would you spend more time skiing or soaking up the sun? We know those listings are tantalizing—but make sure you get your money’s worth.
3. Relaxation should be your main motivation
In many destinations—especially beaches and ski resorts—it’s possible to earn substantial rental income on a second home. However, renting out your home can mean constant cleaning, dealing with booking sites, and an inconsistent customer flow. Plus, to earn top dollar, you’ll often need to open up your home to renters during peak season—the same time you’ll want to be there.
4. Can you go the distance?
Don’t underestimate the difference between a two-hour drive and an eight-hour drive. An accessible vacation home will inevitably be frequented much more often than a remote residence that requires much more time to get to.
5. Make sure to account for all the costs
Don’t bite off more than you can chew—in addition to a second mortgage payment, you’ll need to foot the bill for real estate taxes, homeowner insurance and ongoing repairs and maintenance.
6. Work with a lender who knows the area
Local lenders will be comfortable with appraisals and lending in rural areas. Appraisals can be more difficult in rural areas, since it can often be hard to find comparable sales. Plus, a lender well-versed in the area can help you navigate local rules and policies.
7. You can’t put a price on uncluttered time with family and friends
If the last year has taught us anything, it’s that time with family is more important than ever. A second home can function as a calming retreat away from your day-to-day realities. Time away from your routine, in a beautiful locale (and maybe with spotty cell reception) could be just what you and your family need to unplug, reenergize and reconnect.