The following is a guest post.
Many financial experts are saying that now is the time to get into real estate. There are so many good deals to be had because prices are so low, and at the same time, interest rates are making for very cheap mortgages for buyers. However, if you already own a home, it may not make sense to get into a second home. Even if you have a lot of cash and think you can afford it, there are some compelling reasons why you should avoid buying a second home.
Editions with Terry Bradshaw looks at some of the main reasons why a vacation or second home doesn’t always make sense. From finances to family, there are a lot of reasons to avoid getting into more real estate. Here are some of the key points.
The Financial Costs
The biggest thing to consider about a second home are the financial costs. Homes cost money, and they don’t always return money to you. When you buy a second home, unless you pay cash, you will need to take out another mortgage and make payments on it.
Even if you plan on buying the second home for all cash, Editions TV also reminds you that you will have a lot of other expenses as well. As with any home, you will need to pay for insurance, property taxes, utilities, and maintenance on the property. Depending on the location, you could also need to pay association dues. All of these little expenses can add up to make owning a second home not financially worth it.
The Added Responsibility
Beyond the finances, you have to remember that you now have a second home you’re responsible for. This means maintaining it and dealing with any issues that arise. This can be particularly difficult if it is in a remote place that you only visit once or twice a year. You’re going to have to figure out how you’re going to keep an eye on your property to make sure that nothing happens to it.
There are companies that can help you with this, but then going back to the financial aspect, there is a price to be paid for this service.
You Own It Now
You have to remember that you own this property now, and you may not be able to sell it easily if you don’t want to own it anymore. Editions TV show reminds you of some of the original points you were considering buying a second home: low home prices and a buyers market. However, this doesn’t play into your favor if you decide you no longer want to own the home. It could take a long time to sell the property, especially if it is in a more remote area or not in a popular tourist destination.
Editions TV on Renting a Vacation Home
One of the positives that many people consider with a second home is renting it out as a vacation rental. While this sounds appealing, it can be much more difficult to execute. If you want to have a vacation rental, you will most likely need to find a vacation rental company that can handle everything for you, since you’ll most likely be far away. You need to trust this company to maintain you home, while also booking clients.
Plus, this company will typically take a good 40% of the rental fees, so you may not get as much money as you thought you would. Plus, renting out your home increases maintenance costs because there will inevitably be more wear and tear.
Family Needs Over Time
Finally, no family stays the same over time. When you first buy the second house, you may visit it multiple times per year. Over the years, as kids grow up and move away, that may get less and less. You have to realize that your second home may not be the popular place you thought it would be for years to come, just because you family will change over time.