Buying a second home has historically not been all that common in the U.S. However, those days are fast fading into the past. With an undoubted varied and expansive amount of beautiful nature and city getaways alike, second homes in this country are becoming a preferred investment for those looking for a vacation home, somewhere to retire, or somewhere to spend either summers or winters.
Vacation home experts Hot Springs Village Houses, who provide homes for rent in Hot Springs, AR, have reported a steady increase in the number of people choosing to relocate to the town permanently. This is just one example, but it shows the increasing popularity of second homes in the U.S.
However, purchasing a second home is not the same thing as purchasing your first one. For one thing, the tax can be a bit more complicated and the priorities for the home are naturally different. For example, second homes are rarely purchased with proximity to family amenities such as schools as a top priority. Very often, they are not family homes at all – and proximity to large urban areas is the exception not the rule for second homes.
Enlist the Right Property Expert
This usually means a relator who is familiar not only with the local market and area, but also the buying and selling of second homes. It is even possible to find realtors that specialize specifically in second homes. Normally, a consultation with a realtor is the very least you need, as an expert in this department will be able to alert you to the home’s future depreciation or appreciation in value. They will also give you a good list of things that you can insist upon and expect.
Steps to Buying a Second Home
So, with some of the major things to bear in mind out of the way, it is time to turn to the series of steps every potential buyer should pass through before purchasing a second home. Things vary from place to place but follow these tips and you are sure to at least have the most important bases covered.
Decide Whether it Makes Financial Sense
And this should be much more than just a consideration of whether you can afford it or whether it is worth the money. How much use will you get out of this second home? Do you intend to resell it? Perhaps after renovation? Could you rent the home out at certain times of year to provide an extra source of income? Ask yourself all these questions.
Plan the Where and What
You need to seriously consider both what type of second home you are going to purchase and where you will purchase it. Very often, second homes are vacation homes; is your potential home in the right location for that? You should also consider how easily the home can be resold if this is your ultimate or immediate plan.
Consider the Tax Implications
When you own a second home, your taxes will need a bit of revising. There will be property taxes, but also income tax. Moreover, when you come to sell the home, there is capital gains tax too.
Prepare to Be a Landlord
If indeed this is what you plan to do with your second home either all or some of time. There are too many legal and tax technicalities to get into here, but if you are going to be a landlord you need to start researching this.
With all of that covered, you are in a good position to not just buy a second home, but to buy the right one.