Purchasing a second home can be a good investment while providing unique opportunities. Second homes can give you a getaway from the harsh Utah winters, be a rental property to earn more income, or a property to renovate and sell for a much higher price. No matter your reason for purchasing a second home, there are some important steps to take to ensure you get the best home for your money.
Cole Val Construction builds a variety of homes across Utah, some of which can be second homes for residents. Our builders can help provide tips for current homes, or help improve your second investment property.
Don’t Impulse Buy
The biggest money smart tip is to avoid impulse buying. Doing thorough research will help you alleviate doubts about your second home purchase. Buying on a whim can mean that your purchase may not fit your needs, fall in a bad neighborhood, or lead you to drown in debt. Purchasing a home of any size is an investment and should be shopped before dropping thousands of dollars. Impulse buying can often lead to financial strain or relationship strain with family members or spouses.
Get To Know The Area
For homeowners that are purchasing a second home in a different state or different area than the one they currently live in, the first step is to learn more about the area and how much other homes in that area sell for.
Even if you have vacationed in this spot for years, knowing your way around and understanding the real estate market there are two different things. Visiting the place off-season, speaking with neighbors or other locals, and working with a local real estate agent are good steps to take to better understand the area.
Shop Different Mortgage Lenders
Finding a mortgage with an affordable interest rate can be a tough spot when purchasing a second home. Shopping for different mortgage companies or banks will help you get the best deal and may save you money in the long run. Mortgage loans on a second home may also take longer or require more of a down payment because this is another large purchase for the bank to hold you accountable for.
Consider Sharing The Cost
If you are going to use your second home as a vacation spot, consider sharing the cost with family members or friends to help you cut down on the up-front costs. Sharing the load can help save money on improvements, down payments, closing costs, and utilities throughout the year. Pooling resources help more people enjoy vacation space at a much lower cost.
Higher Down Payments Are Required
Because this is your second home, a loan officer or bank will want you to show that you can afford to purchase another home. This usually means a larger down payment than you made on your first home. Purchasing a second home is a higher risk for mortgage lenders and want to avoid a potential loss. Look into down payments, interest rates, and current loan borrowings and compare them to your finances before you take the leap.
Trust A Local Real Estate Agent
Local real estate agents will know the area well and help you find a home that fits your needs while sticking to a budget. They will help negotiate with the seller and take this stress off of your shoulders (especially if you currently live in a different state). Real estate agents are localized and will choose the best spot for your needs and provide expert advice when purchasing a second home.
Rent Out Your First Home For Extra Income
The biggest reason for purchasing a second home is to gain some extra income. Homeowners can rent out either home while they are not there to help pay both mortgages or build up their savings. Renting out a home can give you another stream of steady income to ensure your debts don’t pile up.
Homes With Cole Val Construction
Our home builders have constructed many quality homes in Utah. If you are looking to purchase a vacation home or even your first home in Utah, look for our Cole Val Construction homes.
Each member of our team is here to help homeowners and home builders improve their living situations. We offer remodeling services along with building custom homes because we believe if you have good bones, you can improve your living space with some common renovations. The owners of Cole Val have lots of construction experience which makes working with our team a smooth process. Whether you are purchasing a second home, building a new home, or looking to improve your own, we are here for you every step of the way.