Buying A Second Home: A How-To Guide
It’s summer in Alabama, and the water is calling. Whether it’s a lake house, a home on the river, or a beach condo, a secondary property can be an excellent investment for your family. And a perfect getaway!
If you’ve been considering purchasing a second home, here are a few tips to get you started.
Think about how you’ll use your secondary property.
Thinking about how you’ll utilize your second home is a biggie. Will it be a second home? A vacation property? An investment property? You may think you have a clear vision, but it’s essential to consider all of your options!
Are you considering using your second home as a vacation or secondary residence only for you, your friends, and your family? This makes perfect sense if you vacation often, have a job that demands a lot of travel, or spend time in another city for personal reasons.
Buying a second home as an investment property is an excellent option if you want some extra income or a vacation home that you don’t plan on using that often. Long-term rentals make more sense if you don’t plan on using the home for vacations. But if you want to keep the option open, you can opt for short-term rentals (STR). Make sure the city, neighborhood zoning, and HOA allow for STR.
Is a second home in your budget?
Downpayment, interest rates, debt-to-income ratios, and budgeting. They’re all things to consider when you’re thinking about buying a home! Unlike your first home, your second home may have stricter requirements. Remember that a mortgage on a second home may be more strict than your primary home loan, so ensure your finances are in order before diving back into the home-buying process.
For more information, check out my other blogs, “Real World Tips for Buying a House Out of State,” “A Beginner's Guide to Real Estate Investing,” and “Homebuying with Guro: Know What You Can Afford!.”
Ready to buy a second home? Here’s where to start!
When you have a plan/goal and financing, you are ready to start looking. First, you need to choose a location. If you’re looking for a secondary home, choose a location in which you spend a lot of time. But if it’s meant to be a vacation home or investment property, choose a location that’s a tourist destination.
If you don’t know the area, a local real estate agent can also help you narrow down the areas most suit your budget and needs. I am happy to help you find a local agent in your preferred area!
After you’re pre-approved and have secured a REALTOR®, it’s time to begin your home search. Make sure you have a list of your needs and wants and that you’ve communicated that to your agent. And, as always, be flexible. You never know what you’ll encounter on your real estate journey!
What’s the bottom line?
The bottom line is that buying a second home can be challenging. But if it’s something that you really want, go after it! Just make sure that you know what you want, are pre-approved, find a great agent, and advocate for what you want. And before you know it, you’ll have your second home!
