From single professionals to growing families to empty nesters and retirees, people buy second homes for a variety of reasons: for vacations, rental income, or a place to stay near family. Regardless of your reason, here are five things you should consider before buying a second home.
- The cost of the home: Evaluate the purchase price of the house or condo as well as what it will take to maintain and manage it. Factor in all expenses, including the mortgage, taxes, insurance, utilities, maintenance costs, and homeowner's association (HOA) fees.
- The location of the home: Determine the time it takes to travel between your two homes and the difficulty of getting to your second home. Also factor in additional expenses such as activities like skiing, golfing, or boating.
- The purpose of the second home: If you plan to use your secondary residence for yourself, think about how frequently you'll visit and for how long. If you don't plan to spend a significant amount of time there, you may want to rent a place instead. If you're purchasing the home as a rental property, think like vacationers regarding location, amenities, and value.
- Tax benefits of a second home: Your property tax rate may depend on your usage of the home, as you may receive tax benefits by renting out your property for a certain portion of the year. Consult a tax professional before you buy.
- Plan for your absence: When the home is unoccupied, consider a caretaker or additional security. Do you have family or friends nearby who can look in on the house? Check out available resources in the area before you buy.
Learn more about purchasing a second home. And if you're ready to buy, find more information about taking out a mortgage from Regions.