Is Buying a Second Home Right for You?

You've successfully owned a house for a number of years now, made your mortgage payments on time and experienced a gradual rise in income. It's possible you've come to a point in your life where you might be toying with the idea of owning a second home. There are many reasons people decide to buy a second home, but the most common are:

• A rental property to help boost finances and boost cash flow each month.
• A vacation home for a fun getaway.
• A home for your retirement years. You can lock your future retirement home payments into today's prices.
• A home for a family member which poses as an investment building to rent out till your heir comes of age.

Is buying a second home a good investment? The answer depends most critically on your current and future income levels. The biggest advantage right now is the soft real estate market nationwide. You can get great bargains all across the board. Many homes which were out of your reach a few years ago are now very affordable. However owning a second home is still a huge financial commitment. It would be foolish if you did not consider the risks alongside the advantages.

Location

Location is very important when considering a second home purchase. In real estate location is everything. You aren't going to buy property knowing that its value will decline over time. If you are not selective and thorough in your choice, than this can certainly happen. To increase the likelihood of a higher resale value look for property in popular areas near beaches, waterfronts and mountains.

Mortgages

Cost is also going to be a major consideration. Mortgage interest rates for a second home purchase will be at least a half to a whole percent higher than the rates for your primary residence. Home owner's insurance can be a lot higher as well, especially if you purchase land in an area with frequent severe weather like hurricanes, flooding, or forest fires. Many other financial decisions need to be thoughtfully discussed before making a purchase. These will mainly revolve around the overall principal and mortgage interest rates, but also the potential taxes and insurance costs associated with your location.

Taxes

Tax laws concerning second homes can be very complicated. You should seek professional advice concerning potential taxes because you will want to look for a property that reaps the biggest possibly tax benefits from your investment. The basics include the capital gains exemption. You are allowed a substantial amount in capital gains when you sell a primary residence, however, that does not apply to a vacation home. In order to get a tax break that second home would have to be a primary residence for at least two years. If you rent your second home more than two weeks out of the year you have to pay taxes on that income as well. So if you rent your property out you can't write it off in your taxes.

Learn the best methods for locating and buying a second home mortgage at www.real-estate-yogi.com. They have agents available around the clock, seven days a week ready to help you in your area of the country. Call them for a free consultation at 1-866-987-1397.

Buying A Second Home: A Good Time For Second Home Purchase

You've owned a home for a number of years now. Maybe your career has taken off or you've come upon some good fortune and good money. Making a sound investment is probably on your mind. Some might say to invest in the stock market, while others could tell you to put that money into a retirement plan. Is buying a second home a good investment? Despite the recent distress of the real estate market you don’t want to overlook a second home purchase. If you are smart with a real estate investment it can pay huge dividends down the road.

• Look for an area of your state or country where the property values have been steady if not growing.
• Find a real estate agent local to the area in which you are looking to buy property. They will have the inside information on where to find the best investments.
• Consider what you want this property for? Is it going to be a vacation home? Will it be a rental property? Maybe you are looking to flip it in a few years and consider it an investment.

Is it the right time?

Before you even think about buying a second home remember the financial burden it will have on your bank account. Just because you can afford a second home doesn’t always mean you should. Remember that you will be making payments on two properties now. Still, owning a second home is common in today’s market and many people have to own another home out of necessity because their job or family requires it.

Use the internet

The internet is a great resource to find information on the housing market. We are fortunate to live in a time of instant information. By using a search engine such as Google  yahoo, or bing.com you can instantly find the latest property values local to that area of the country. If you dig a little deeper you can get a list of real estate agencies attached to those properties. You can even get a history of that properties value over time. This will help provide you with a scouting report of the area’s potential value in the future.

Go visit the area first

Visit the area first before making any purchase. Stay for the weekend, or week and scope out the lay of the land. Is it a safe neighborhood? How are the schools? Is there access to hospitals, shopping, and entertainment? What’s its location in relation to potential employment? One of the best ways to buy a second home is to personally interview the property. If you can bring someone who knows something about home repair this can help. Look over the home in the best detail you can and make sure there aren’t any red flags like a collapsing deck or some other costly repair that will add to the overall costs of the home in the future. Also look for the potential to make this home more valuable in the future. Is there room to add a pool or even a deck? Can more rooms be added? If it is an investment property you need to consider how you will invest in it in the future.

Whether you are buying a second home as a primary residence, or as some sort of investment, begin your research at www.real-estate-yogi.com. They have agents available any day of the week to advise you on your next investment. Call them directly at 1-800-987-1397.