Are You Prepped and Ready For a Second Home?

Could it be time to invest your hard earned money into a second home and the real estate market? The potential income from a second property is a profitable solution on the housing market that you could benefit from. You would do well, however you have to consider whether you are really ready for it. Having a vacation home or a new investment property is an excellent way to expand your existing real estate portfolio. However, before you decide, you should look at the facts and prepare for the responsibility a second home brings.

Are you ready to commit yourself to the task?

Consider whether you’re ready to take on the maintenance and tasks of a second home and or whether you would be better off renting a vacation home rather than being a landlord yourself. There are a lot of things you will need to take care of in terms of prepping a home and maintaining the property throughout the year. Plus if you are the owner and renting it out, there’s even more work to be done dealing with renters and legal matters. If you decide you do want to own and take on the responsibilities, companies like our First Team Property Management division can help with the upkeep and renters.

Consider the financial impact

Just because you have money for a property that doesn’t automatically mean you will be successful in finding what you need right away. You would do well to consider the long-term financial impact on you and your wallet for maintaining a new property and its ongoing financial commitments. There will be property taxes, insurance coverage and more you will need to address before you purchase the place, so keep this in mind as well as the price you will need to pay in the long run.

Will it be worth the investment?

Consider how often you will use your second home when deciding on a location. You need to make sure your property is either close enough for you make use of it on a regular basis or be ready to rent it out instead for any tenants and additional profits you can make from the building itself. In real estate it’s all about location, location, location. Whether that’s a location close to you or a vacation hotspot, make sure you’re making a smart choice before diving in.

What will you do about your tax situation?

One final thing worth keeping in mind is that the IRS has a different approach for people with vacation homes and second homes, which are generally defined by staying in a home for at least two weeks at a time. This situation will affect your taxes, so you would do well to keep it in mind whenever you prepare your finances. Talk to a tax professional before you expand your real estate portfolio with a second home so there are no surprises come tax season.

If you are ready for a second home, team up with a First Team agent to help you find the perfect property. Search for an agent online or reach out and we’ll find an experienced agent near you to help.