Guest post by: Karin Gage, Summit Sotheby’s International
About the author: Karin Gage is an associate broker with Summit Sotheby’s International in Park City, Utah. She has been helping clients buy and sell second and primary homes for over 30 years.
Whether you dream of a lake house retreat, a ski chalet getaway, or an urban pied-à-terre, now could be the perfect time to finally to buy that second home. Purchasing a getaway house in between the high-use summer and winter vacation seasons allows you to see the area in the off-season and weigh your options, before it’s time to put your house to use. Below are five tips to help you navigate buying a second home.
1.) Thoroughly research the location: The value of a second home is largely determined by its location, such as how close it is to recreational hotspots, a downtown area, top restaurants, etc. Visit these areas in the off-season in order to get a feel of the year-round community. Also consider purchasing a second home within approximately two hours of your primary residence, so you are close enough to enjoy your new home, but far enough to feel like you’re traveling to a destination.
2.) Evaluate the possible rental worth: If renting out your new property is a top priority, then attractive amenities should be a primary focus. Million dollar views, outdoor hot tubs, or waterfront property are all ways to attract potential renters. Research the area’s going rental rates to see if they align with your financial plan.
3.) Maintenance and cost of living fees: It is important to estimate the initial on-going maintenance expenses of a second home. Additional costs may include HOA or association fees, home improvements, caretaker fees for the off-season, and the expense of any toys that might accompany your new lifestyle, such as ski gear or boating equipment. Set aside 10% of what you originally budgeted to invest in your new home, to cover any unforeseen maintenance expenses.
4.) Secure the best rate: Mortgage rates on second homes are often higher than those on primary homes. Work with your real estate agent and mortgage broker to determine if this property will primarily be used a second residence, or as a rental property. This will help you to secure the best rate for your situation.
5.) Be patient: Take a night to sleep on any buying decisions before you rush to make an offer. When buying a vacation home, it’s important to be patient during the home hunting process to avoid paying more than you planned, traveling farther than you intended, or discovering the house needs more improvements than you budgeted.