Is the Timing Right for a Second Home
For many, wanting to get away is just a part of life. You buy a beautiful house someplace, settle down, start a family, but there is always that nagging feeling that’s itching to get away. Holidays are part of that wanderlust; the chance to get away someplace gorgeous. And then you see it. The local paper at your holiday spot, and lo and behold, there’s a real estate section right there. Daring you to even look? You can’t afford it, can you? Two houses? Is dual home ownership for you?
A second home can work for you, but you have to go into the process well aware of what to expect. If you are looking to get rich quick, don’t count on it. According to recent data, the price of real estate in areas that are deemed “Vacation Markets” has risen twice as fast as real estate in other areas. Even with the housing crunch, these vacation homes are holding their value better. So, not only is a second home in your destination of choice going to cost you a pretty penny, it’s no longer a well-kept secret any longer and the chances of you flipping it to make a fast buck are slim.
The best piece of advice a possible vacation home purchaser can listen to right now is to buy for love not for money. Recent sharp downswings in vacation markets like Naples, Florida, Lake Tahoe, Nevada and Cape Cod, Massachusetts, have shown that trying to turn a profit in a vacation market is just about impossible. But there is a silver lining to all of this. With the housing bubble going poof all across the country, those that are looking to sell will be doing so at lower prices. Now can be a great time to buy a place that you are planning on keeping for a long while.
But how do you know if you have your head on straight about the whole affair? Well, take some time and appraise the pluses and minuses of buying another home. Once you’ve decided on a area, spend some time there to make certain you like it. If it’s going to be a holiday home, you will want the scenery to be relaxing (if that’s what you’re looking for) or exciting (if that’s what you go on vacation to experience). A final check off should be the bottom-line price. If the monthly payments of the two houses makes up more than one third of your total earnings, you’ve spent too much.
Purchasing property is a large investment for everyone, even the rich. Take the time to properly appraise the pros and cons before you choose to own a second home or you could find yourself on a permanent vacation.