While many Americans are being adversely affected by the slumping economy, there is also a large segment of the population who is doing quite well, and is able to consider purchasing a second home.
The majority of second home buyers are of the Baby Boomer generation, though younger buyers are also starting to enter the market. Second home buyers are typically looking for a home that can be used as a vacation retreat, an investment property, or as a future retirement home. With housing prices still dropping in many areas of the country, now is the best time to buy.
South Florida has long been a hub of second home owners, as the white sand beaches and glorious year-round temperatures promise leisure and relaxation. A quiet, tropical lifestyle can be quite alluring to city dwellers in the north, so thousands flock to South Florida every winter.
In highly sought after areas like Naples, housing prices are much more affordable than they were just a few years ago. Buyers from a wider range of income levels can now fulfill the dream of owning real estate in what is considered one of the nation's most unique and beautiful areas.
If you're thinking about buying a second residence, there are a few things to keep in mind. First, remember that buying a second home is a big decision. Don't buy on a whim simply because the travel brochures look nice. Research the area you're thinking about buying in—both online and in person.
Visit the community with the mindset of a local. You won't simply be a tourist anymore, so check out amenities and transportation in the area to make sure that this dream place will meet your everyday needs.
Talk to people who live in the community year-round to get a feel for what the neighborhood is really like. It's also important to hire a real estate agent who works in the area you want to move to. They will be able to provide sound market information and local knowledge that can make your purchase a smooth one.
Think about what you're going to use the second home for. Will it be strictly used for family vacations? And if so, how often do you plan to stay there? If you want to visit regularly, you may want to buy a home that is close to your primary residence to cut down on traveling costs. If the property is located close to your residence, you'll also be able to check on the property more easily, and make sure that there are no repairs or maintenance issues that need to be addressed.
Are you planning to retire in your second home? If so, you'll want to make sure that there are adequate services and medical facilities in the area to accommodate your needs as you age. Also, as you get older, mobility becomes an issue, so look for homes that you'll be able to get around in easily for many years to come.
You'll also want to find out what the rules are regarding whether or not you can rent out your property when you're not staying there. Having a second home strictly for your personal use is great, but the future is unpredictable, so it's smart to be prepared by knowing your rights ahead of time. Some communities will only allow homeowners to rent out their properties month-to-month, while others are fine with shorter stays.
Renting out your second home, even for a short time can help immensely with your mortgage payments. Some experts say that if you rent out your property for just 4 months, the rent can cover your mortgage for the entire year. This is because tourists are willing to pay big bucks to stay in a private home that's located in a premier vacation destination.
Renting out your home definitely has its financial benefits, but make sure that you know your responsibilities when it comes to tax time. Your tenants' rent is considered taxable income for you, though you will be able to deduct expenses for upkeep since your property is a rental.
By renting out your second home, you can cover your mortgage costs and still have a private oasis to escape to whenever the need strikes. Sounds like heaven!
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