Things to keep in mind before purchasing a second home

Are you thinking of buying a second home? There is an evident growth in the number of people who are purchasing multiple properties and the trend seems to have seen serious traction. The decision of purchasing a second property comes with a lot of responsibilities. One should think over the following points before purchasing a second home.

Purpose: The purpose for buying a second home must be clear right from the word go. There are various reasons why people decide to purchase additional properties. Some people are looking for a new home to move into, while others are looking for a steadily growing long term investment to make some profits on the side. People also buy second homes and give them up on a rental basis to tenants to create a second source of income. The concept of vacation homes is also a very popular reason behind buying additional properties.

The type, cost and location of property have direct relation with the purpose. Rental flats may give tax advantages along with an additional revenue source. When it comes to vacation homes, they need not be at prime locations. On the other hand, investing in real estate property pays not only in money, but also in security, redundancy and pride.

Financial capacity: This is also a very important thing that one must consider before taking a decision on buying a second home. One must make sure that they have significant reserves and ample savings. When it comes to loans, it is also necessary to save and keep a buffer amount before disbursing loan money. One must make sure that one doesn’t have too much debt on their backs and one has a sound financial history if one is looking for a loan. If the debt from the first property is not yet paid off, monthly mortgages from both, the first and the second home may make for a difficult financial situation in the immediate short term.

Location and accessibility: Location may not be of the highest priority but it is worth considering while taking such a big decision. Preference for location and accessibility will vary depending on the purpose of buying a second home. Questions like — How is the quality of public transport at the property location? ; Is it close to metropolitan or suburban areas? , etc., should be put forth and thought about. There are certain locations that have a promising future in terms of growth, development and lifestyle. One must not just compromise on the location while buying a second home.

Long-term plans: Finally, it is extremely important to have a long term vision of how buying an additional property is going to affect your future. Investing such a vast amount of money is definitely a risk, but it should be a calculated risk. One must keep in mind that this decision needs to be well thought of so that it could turn out to be a profitable decision. Buying a second home is a good step towards being self-secure and happy.

These are some of the things one must keep in mind before deciding to buy a second home. Buying a property is a big decision and should be backed by great amount of thought. Once all these parameters have been thought over, one doesn’t need to fear venturing into the property market. One should go in fearlessly and buy the home of their dreams.

(The writer is Founder and Director of Mirador Dwellers)