What Are Some Tips for Buying a Second Home?

What Are Some Tips for Buying a Second Home?

Some tips for buying a second home include considering location, distance and access. A house bought as a quick getaway retreat should be close enough for easy access in order to reduce the amount of money spent on gas.

Second homes in desirable locations and close to parks, bike paths and hiking trails can offer more in the way of activities and possible resale value. If a homeowner plans to rent the house when not in use, he must consider tax implications, as income tax policies vary by state.

Another factor to consider is whether the homeowner can purchase the house with cash or if he must finance it. Many sellers prefer all-cash transactions to eliminate long, drawn-out financing deals. A buyer should also be able to assess if a second home is truly affordable without rental income. A homeowner must report all rental income from a second home if he rents the home for more than 14 days each year, as of 2015.

A person considering a second home should consult a real estate agent who is familiar with the desired location. Realtors can provide information on comparable homes that have sold in the area and amenities that can boost a home’s resale value. Realtors can also access the historical prices of an area and help to gauge the return on a second home investment.

If a person purchases a second home in a beach area or coastal community, insurance should be a consideration. The cost of flood insurance may be high, or insurance may not be available, depending on home's proximity to the water.