Many people out there feel that buying a second home is only a possibility if you are incredibly wealthy. While this is true for the most part, it isn’t always the case. You will need a fair amount of savings, but nothing wild regarding finances. However, just because you can, does it mean you should? On paper, two homes have to be better than one, right?
Well, the truth is that it might not always be the case. So, even if you have the money, it might not be a wise idea. We’re going to take a look at some of the problems and issues you might encounter. Hopefully, we’ll be able to establish whether it’s the right move or not. Let’s get started straight away.
You will need money
If you want to persuade your bank that you can afford a second home, you will need a decent income. It means that anyone looking to buy a second home won’t be able to do so if they are just getting by in life. You’ll need to be either doing well or have a mortgage paid off already. However, it’s not impossible to buy a second home if you are planning to buy to let. Banks often take in your income from rentals into account - and it might be a route to explore.
You will need to research
Don’t just go out there and buy the first house you fall in love with. You need to put a lot of work in first. Speak to local real estate agents and talk to them about the area. How much rental can you expect? Is there a potential for using the property as a vacation home? What does the future look like for the town Are there local developments happening, and how much value will the property go up?
Fixer-uppers have no guarantees
One of the big reasons many people buy a second home is to improve it and sell it on fast. However, there are no guarantees with fixer-uppers. You might take years to complete important work It could cost you a small fortune. And, there is a possibility by the time you finish the property has devalued. Unless you are 100% sure there is no risk, think carefully about buying doing up a run down property. Without a lot of experience, there are many mistakes you could make.
You will need to prepare for the worst
Finally, you’ll have to steel yourself for all manner of disasters. If you have tenants, they could cause a serious incident. Your boilers and heating systems could go, meaning you have to get them fixed. If you aren’t a good landlord, you will get a terrible reputation and fail to find tenants. And, if you don’t have time to market a vacation property, no one will ever stay in it. Buying a second home takes time, just as much as money. And if you don’t have both readily available, it might be worth looking for different investments.