Best Strategies For Buying A Second Home
Right now in Sarasota the housing market is hot and favors sellers; but, that doesn't mean there aren't good deals to find. If you're considering purchasing a second home or vacation property, because you're relocating from Canada to Sarasota, or for another reason, you should know there are certain beneficial strategies. This is a great investment to make because home values are steadily on the rise and having a second home means a more robust portfolio.
Best Strategies for Buying a Second Home
One of the most important things to keep in mind is that when you buy any type of property, you are buying into the neighborhood. This is so important because you cannot change the surrounding neighborhood and if it changes, so too, will your equity situation. You need to find a good, stable neighborhood and the good news is, there are several here in sunny Sarasota. Whether you're looking for a single family or townhome in a master planned community or stand-alone neighborhood, you'll find plenty of options in this area.
If you have plans to buy a home at the beach, in the mountains or in the desert for your retirement years, you might be tempted to take the plunge and buy your future home now while interest rates and home prices are low. Financial experts say buying your retirement home five to 10 years before you stop working could be beneficial. However, people in this age group should be aware of the risks of tying up money and perhaps losing flexibility with a second home purchase. --Bankrate.com
Another great aspect of buying a second home is there's no rush. Unlike purchasing a primary residence, which can set you on a tight timeline, there won't be the same pressure. Take advantage of this and you'll make a much better decision you'll come to appreciate more and more as time goes on. Yet another great proposition is the ability to rent it out to earn some income from the home before you move permanently. Here are more of the best strategies for buying a second home:
- Think about tax implications. The IRS allows for many write-offs when a second home is also a rental property or is a year-round rental home. Speak with a professional, licensed accountant about your intentions and discuss various scenarios. Being in-the-know about what tax implications are involved is imperative before you start shopping for a mortgage or searching for a home.
- Put down a sizeable down payment. Most real estate professionals advise to put down at least 20 percent when buying a vacation home or rental property. This is to avoid paying private mortgage insurance and kickstarting equity building. It also helps to save a little every month by not having to pay PMI. Of course, the bigger your down payment, the smaller your home loan and the faster you can amortize the mortgage.
- Decide which type of property to buy. Think carefully about which type of property will be the best fit when you're living in it full time. If your personal living circumstances will change, take these into consideration because you do not want to be in the unenviable position of having a home that doesn't fit your future lifestyle. You need a property that will make sense over the long term.
- Stay patient to get a really good deal. As mentioned above, the very fact you're buying a second home or vacation home to become your primary residence in the future, means you don't have to settle on something quickly. You have time to wait and this is a huge advantage, since you can be a bit more particular. Of course, if there's a good deal out there now, give it serious considerations and do not wait too long because homes are selling fast right now.
- Get to know the neighborhood and locality well. One of the most important things about buying any home is to learn the neighborhood and locality well. Get to know these well before you choose a neighborhood or community to buy into. You should experience day-to-day life (and weekend life) several times before you settle on a property. This will give you ample opportunity to know its dynamics and nuances.
Another smart move is to consider all financing alternatives. Before you start house hunting, take some time to learn about different debt instruments and check with various lenders. You're more likely to find better options in small, regional banks and credit unions than with national chains.