As the real estate market slowly regains its footing, American consumers are finally starting to move forward with their home shopping decisions. Many are looking to buy second homes for retirement purposes or for investment properties or as replacements for their current homes. But, regardless of the reason, Trusst’s Leland NC builders suggest using a reality checklist to help ensure that your second home purchase is the right one for you.
Here are six crucial steps you need to be taking when shopping for your second home.
Make Sure the Purchase Makes Financial Sense
All too often, buyers of second homes underestimate the costs associated with managing another property. When you buy a second home, there is so much more involved than just the purchase price. Landscaping, home repairs, utilities, and other ongoing expenses can add up quickly. Make sure you go over the numbers to verify that the purchase is a sound investment before your buy.
Really Get to Know the Location
A property could look absolutely beautiful, but that will mean nothing if it is in a bad location. Homes in bad locations are hard to rent and even more challenging to sell, so really get to know the location of your intended buy before you purchase it. Research the area online, ask your realtor questions, talk to neighbors, and look into recent sales, the local economy, and crime rates so you have a complete picture of the area’s quality of life.
Keep Tax Implications in Mind
Whether you buy a second home as a replacement for your current one or you plan on renting the new home out, you need to know how this purchase will affect your tax situation. For instance, if you purchase a second home in another state, you will have that state’s property taxes to worry about. Or, if you choose to rent it, then you will have to claim the rent on your income taxes. In either case, your taxes will be affected when you buy a second home.
Prepare for Your Role as a Landlord if You Plan on Renting Out the Second Home
If you want to be a good (or successful) landlord, there will be a lot of things you need to learn and it is best to learn them before you become one. Find out how to choose good tenants, learn about leases and short-term agreements, and look into what’s involved with dealing with property management and repairs. Understanding your requirements and responsibilities will help your investment pay off and keep you out of legal trouble.
Determine Your Down Payment Resources and Financing Options
The more you put down on your second home, the less your monthly payments are going to be. Ideally, you should try to put at least 20% down. It will help if you know before you start shopping around exactly how you plan on coming up with that money. Will you take out a home equity loan on your current home? Can you borrow against a life insurance policy or from family members? You should also consider all of your financing options, even those that are considered alternative or “non-traditional” to make sure you choose the best avenue for your needs.
Protect Your Second Home as Thoroughly as Possible
Sometimes when people buy a second car, they downgrade that vehicle’s insurance coverage to just liability to help cut costs. But, when you buy a second home, you need to make sure it is just as well protected as your primary home. This means getting it inspected prior to purchasing it, obtain title and hazard insurance, and add liability insurance to your policy so both your home and your family are protected.
Let Trusst Builder Group’s Leland NC Builders Help You Get the Second Home of Your Dreams
Trusst Builder Group are experienced builders in the Wilmington/Leland area that can build you the ultimate second home. We offer a variety of building options and floorplans so you can get the right home at the right price. Whether you are buying a second home for retirement, for moving into, or as an investment, our Leland NC builders can customize any of our standard floorplans to fit your family’s needs and wants. If you want to learn more about our available homes or you want to schedule a consultation with one of our professional designers, give us a call today at 910-371-0304.