Buying a second home in 2021? Here’s what you should know.

With its abundance of gorgeous landscapes, Wenatchee, WA is a wonderful place to invest in quality real estate. No wonder so many people consider buying a second home in this exquisite North Central Washington location.

Make your real estate investment count. Here are four essential considerations if you want to buy a second home in Wenatchee this year:

Be clear about how you want to use it

Define your long-term goals with the second property. Do you want it exclusively for personal use, like when you go on your annual holiday vacations? On the other hand, are you willing to rent it out when you are not occupying it?

Take note that lenders view private second properties differently from rental or investment properties and will apply varying loan underwriting considerations accordingly.

Be sure you can afford it

Mortgage interest rates remain at historically low levels (hovering around 3%), as of mid-April 2021. This means you can save more money from your mortgage payments over the long term, even though home prices are soaring due to the low inventory of available properties.

It is worth noting that mortgage rates and requirements for second homes are typically more stringent than loans for first homes. However, if you already have a large amount of equity in your current home, you can use it to justify a cash-out refinance, a home equity loan, or home equity lines of credit.

Budget for other necessary expenses

Paying off your home loan is not your only financial commitment when buying a home. Consider the following, as well:

• Furniture and appliances

Whether you plan to rent it out or keep it as a personal vacation retreat, you will want your second home to be fully furnished and fitted with essential appliances and utilities.

• Maintenance and insurance costs

Regular upkeep and good insurance coverage will help you preserve and even improve the long-term value of your second home. Routine maintenance is especially important since the property is going to be occupied and used for only a few weeks or months per year.

• Tax obligations and benefits

Having a second property means being responsible for paying a second set of taxes. Be sure you can sustain this financial obligation before diving into another home purchase.

If you rent out your second property, you can deduct expenses like your loan interest, property taxes, repair costs, and operating expenses from your tax return.

Alternatively, you can avoid paying rental income taxes if you do not rent out your property for more than 15 days each year. The previously mentioned deductions no longer apply in this case, however.

Work with a reputable local real estate agent

Like any real estate transaction, buying a second home goes more smoothly with the help of a reliable, experienced real estate professional. Hire a local agent who can match you with the finest available opportunities in the market, as well as confidently guide you through every step of the homebuying process.

If you are searching for the finest homes for sale in Wenatchee, WA, as well as in nearby locations, such as Dryden, Cashmere, and Rock Island, reach out to the local experts at Coldwell Banker Cascade Real Estate for top-notch professional support. Call 509.888.8887 or email info(at)cbcascade(dotted)com for more information.