Second homes can be places for families to gather, lucrative investments, or a mix. Think about what your long-term goals are and how buying a second home would help you achieve them. Is it a place for your family to gather? A place for you to enjoy a particular natural landscape? Or is it a property you don’t see yourself visiting often and want to rent out? If you’re thinking about buying a second home, there are many pros and cons to consider.
The Maintenance
Any homeowner knows that your house requires constant maintenance – it seems like something always needs to be painted, fixed, or replaced. If you don’t expect to occupy it for more than a small portion of the year, you might want to look into whether it could pay for itself. If it can’t, the cost and labor associated with maintenance could defeat the purpose. Assess how much of your time the house will take up and consider if that will make it more of a burden than an asset.
The Location
Many people prioritize natural beauty when looking for a vacation home. Being away from the city and closer to nature is a wonderful thing, but it can come with downsides. You may also want to consider if your second house is close to a hospital or other healthcare facility. If you frequent doctors, physical therapists, dentists, or other professionals, consider if living in a scenic but isolated area will work for you.
The Investment Aspect
If you own a second property, it could appreciate over time. However, it also has the potential to depreciate, and either way, it can tie up your money in the meantime. Since a second home requires a big financial commitment, you should investigate how easy or difficult it would be to liquidate. If your financial situation changes and you need to sell, consider the desirability of the property. Remember that if market volatility forces you to sell, you may not be alone, which could affect prices and demand. If you’re buying a second home as an investment, research how easily you can rent it and the laws surrounding using real estate as an investment. A unique residence in a desirable location can make for a great investment.
A home is one of the most significant purchases you’ve made in your lifetime, so you should take your time when thinking about buying a second one. The ability to rent the house, how you will use it and its future value are all important things to think about. If you think a second home is part of your retirement plan, talk to us before making the big decision. We can help you assess your financial situation and weigh the pros and cons. Schedule your complimentary, no-obligation review today.
