The thought of acquiring a new investment property or vacation house can truly be exciting. If you’re in a place in your life where you’re able to seriously consider buying a second home, here are some things you need to do before taking the leap:
Are you ready to make the commitment?
A big part of making the decision to buy a second home is ensuring that you’re financially capable. Do a thorough and honest assessment of your finances by breaking down your assets and liabilities. It’s important that you’ve got enough disposable income and that you’ve paid off all your existing mortgages or are at least very close to doing so.
Your lifestyle will also be a major consideration in your decision. Is this the smartest, most fulfilling investment you can think of – is it the wisest use of your extra income or savings? Do you have the time, energy, and resources to maintain the home? Does buying this property align with your other long-term goals in life?
Make sure that your answer to all these questions is in the affirmative before moving onto the next step.
What will you be using your second home for?
Identify why exactly you want a second home. Will it be a personal vacation getaway or are you planning to rent it out? Being specific about your plans for the property will make it easier for you to determine exactly what you’re looking for.
This will also help you anticipate the costs you’ll be paying for the future. For example, the maintenance needs of a vacation home are different from those of an investment property.
Do your research
Knowing what the surrounding community is like, looking up market values of other properties in the area, and being aware of any noteworthy environmental factors is crucial. Arming yourself with this knowledge can help you make a more informed decision and makes it easier for you to choose a house that aligns with your goals. This information can also help you in deciding how much you would be willing to pay for the home.
Create a budget
Even if you’re in a good place financially, creating a budget will help you stay on track with your finances during this whole process. Decide on an amount you can afford to pay and stick to it.
Remember, though, that the price of the house itself isn’t the only thing you’ll need to save up for. Here are some of the other costs you’ll need to take into account when creating your budget for buying and owning a second home:
- Closing costs
- Homeowner’s insurance
- Property taxes
- Construction costs (If renovations and repairs are needed)
- Monthly utilities
- Maintenance of the home
Do you think you’re ready to take that next step towards purchasing a second home? If so, turn to our team, Coldwell Banker Cascade Real Estate. We’re the experts you can count on for your Cashmere, WA real estate needs. Contact us at 509.888.8887 or info(at)cbcascade(dotted)com.