Buying a second home is not for the faint of heart. It’s a major investment of your money, time, and energy. It’s also one of the smartest ways to build wealth and secure the health of your financial future.
With that in mind, we’ve put together a guide to buying your second home. It’s packed with helpful info, tips and tricks, and factors to consider before putting a pen to paper.
If you’re thinking about investing in a second property, or ready to take the plunge, contact us today to learn more about buying in Miami.
Facts About Buying a Second Home
Before we get into the nitty-gritty of how you purchase a second home, consider the following facts:
- The median age of a second home buyer is forty-six
- The median household income is $99,100
- The most popular reason to buy a second home is as a family vacation home
- The most popular types of second homes are detached single family
- The most popular areas for second homes are the suburbs, small towns, urban areas, and resort/vacation locations
Decide Why You Want a Second Home
The first thing you need to ask yourself is why you want a second home. For some, this question is simple. They want a second home for investment or retirement reasons. For others, though, things are a bit more complicated.
If you fall into this second group – people who know they want a second home but aren’t quite sure why – you should make sure you have a reason before buying. Remember, purchasing any property is a huge step. This is especially true if you’re considering a second property and have a mortgage on your primary residence.
Make sure your reasons for buying are crystal clear. If you’re unsure, or can’t come up with a truly compelling reason, it’s probably best to wait to buy.
Make Sure You’re Ready to Buy
This tip goes hand-in-hand with the one above. Once you’ve come up with why you want a second home, it’s time to consider if you’re ready to buy.
There are a lot of reasons why you may or may not be ready, including: much money you have saved, your current mortgage payments, any expected changes to your interest rate, the location you’re looking to buy in, any active investments, the size of your family, and more.
That’s far from an exhaustive list, but it gives you a good idea of your overall financial health.
Pick the Perfect Location
This step is near and dear to our hearts. Make sure to pick the perfect location when buying a second home. Not an alright location. Not a good location. You want to pick the perfect location.
What makes the perfect location? Well, you want to consider things like: the current state of the housing market where you’re looking, the historic state of the housing market, the county your second home is located in, the nearby cities, the nearby attractions (restaurants, parks, etc.), etc.
When it comes to perfect locations, you can’t get much better than South Florida. We’re particularly fond of Coral Gables, Sunny Isles, Surfside, and Bal Harbor, but you really can’t go wrong with anywhere in Broward or Miami-Dade county. The market is strong, the location is ideal, and the attractions are world-class.
Research Financing Options
This is where the rubber meets the road. You want to make sure you pick the right financing options for your particular situation. These vary, of course, but there are some constants you’ll want to keep in mind.
First, can you put down a 20% down payment? While this is often thought of as an unbreakable rule of purchasing a home (first or second), it isn’t always the case. If you only have 5%, for example, you may want to use the equity you already have in your current home to make up the rest.
Next, do you have family who are able or willing to pitch in? While this isn’t always the most attractive method of financing your second home, it is a smart move when considering interest. Not only can you save a potential windfall of money in avoided interest, but you may be able to pool your money with another family member’s to invest in a larger property.
These are just two examples. To get a complete understanding of your financing options, you’re going to want to consult with a Realtor®. Speaking of which…
Work with the Right Realtor®
This is your hidden weapon. Working with the right Realtor® to purchase a second home won’t just make the process easier. It’ll save you time, money, frustration, and allow you to be confident in your investment.
That’s where the YK Group enters the picture. Not only are we experienced, expert real estate agents, but we know the South Florida market intimately. We deliver nothing short of supreme customer satisfaction to everyone who walks through our door.
Contact us today to get an expert on your side!