Buying a home is for most of us the biggest purchase we’ll ever make in our lives.
Interesting enough, some people don’t stop here and purchase a second and even a third home. Maybe even more.
The reasons are diverse: some look for a vacation home, others purchase a second home for their offspring, others look into real estate investing.
No matter what your reasons are to look for a second home, here are 10 crucial mistakes you need to avoid:
You buy a home on impulse
When purchasing a second home you should already have enough experience with the entire home buying process to know you should never buy on impulse. Not when purchasing clothing or gadgets, lest a house that costs a lot.
Study the housing market properly, see the prices homes sell for in your selected neighborhood, meet with realtors and go to open houses.
Chances are that, if you are doing your due diligence, you will find a great deal.
You ignore the area
A home is not a car you can take with you to move somewhere nicer, so, if the neighborhood is not good, you’ll be stuck there for as long as you own the house.
Many buyers of second homes do not know anyone in the area more than the seller of the house or the real estate agent. Drive around the area for a while. Do it in the daylight and nighttime. You can also contact the local police and have a chat.
See if you can chat with few neighbors. Are they nice people? If not, maybe it’s a better idea to look for something else.
You don’t take into account the maintenance costs
What’s the current condition of this house? Is it an old home that needs extensive repairs? Is it in excellent shape?
Do you need a swimming pool? It’s great during the summer, but it’s also costly to maintain.
What about the taxes? In some areas the taxes are so big, it’s almost enough to buy a new home elsewhere with this money.
You ignore the weather
Husband always dreamt of moving to Alaska. I love sunny California.
But each comes with it’s pros and cons. A warm winter might also mean super-hot summers and having enough snow might mean you get way too much during the year, that you start hating it.
I have close friends who moved to Germany, which is well known for it’s rainy weather. After 2-3 years my friends are sick and tired of this weather.
Outside of the weather, you also have to think if the apartment that we like is in a totally abandoned area at another time of the year. The insurance has all this in mind when calculating the annuity.
You buy a home in a popular place
Living in a posh area has its perks, but it also means high prices and taxes, lack of parking (take Manhattan for instance), possible traffic jams and wasted time (when leaving and coming back home).
You buy a home in a too remote area
The opposite of the previous mistake: buying a home in the middle of nowhere.
Catching a plane and renting a car for several days may seem entertaining on paper, but perhaps we will tire on the third trip. Many people stop using their second home because they are too lazy to reach it.
You don’t think about the future
Will you have children? If you have a family and the kids are small now, won’t they need to go to a great school?
Our life needs change over the years and something serious, such a house, needs to take this into account. If you can now settle for a small studio apartment and be content with it, maybe in 2 years this will be too crowded to accommodate your growing family.
You buy too big of a house
When you have a family, you probably expect to need many rooms for quite a long time.
It makes sense for starting a family, but there are parents who buy a retirement home thinking that it has rooms to accommodate all their children and grandchildren, something that perhaps happens one week a year or less.
In this case it makes more sense to downsize, not get a huge mansion that’s going to remain empty for 350 days a year.
You jump into buying a home, even if renting would make better sense
Renting has its perks, just like home ownership has its own. Before you get into another mortgage (or spend all your savings buying a second home, do think if it’s not better to just rent an apartment or a house for the time being.
You marry a place
It is not the same to go to a zone a week of vacations in summer to go every weekend to the same place or to repeat every summer in the same urbanization.
Finally, if you are convinced … go ahead! Now there are numerous homes for sale that can fit your budget and your needs. If all these handicaps are avoided and a thoughtful purchase is made, surely a second residence will provide endless satisfactions. Who does not remember their summer vacation?