Thursday, December 18, 2008 4:34 PM
Tim and Kym Team
10 Tips for Buying a Second Home
Top 10 Tips to Know About Buying a Second Home
NAR stats indicate that 1 in every 3 homes purchased in 2007 was a vacation home, or investment property slated for a retirement home in the next 3-7 years. This indicates that demand for second homes remains healthy despite an overall slow housing market. With prices in the resort market of Phoenix/Scottsdale being at 2003/04 levels, combined with recent favorable interest rates, now may be the best time to make that second home purchase. No matter your dream: waterfront lot, sparkling resort pools, 200 choice golf courses, or purely for profit- take advantage of these 10 tips when planning your investment.
1)Resist Impulse Buying- Many resort communities in and around the Phoenix/Scottsdale resort market are traveling to great distances putting on enticing community seminars, or engaging you to try a vacation in their community, thus pressure to purchase there. Do your research thoroughly and take into consideration activities and events you will be participating in when you use the property. Location and distances to and from events can be key to where you buy. Buying on a whim can equate to more than you can comfortably afford, or one that doesn’t fit your needs.
2) Evaluate needs and long term goals -
Be realistic about what type of second home suits your lifestyle. If you're looking for a weekend getaway, staying within a day's drive of your primary home could be a good move. If you'd like your second home to someday serve as a retirement spot, assess the home's accessibility and check out health care services in the area.
3)Get to know the area before buying- Conduct research not as a tourist looking for the top destination spot in the town or city, but like a permanent resident. Things to consider: local and state taxes, schools, roads and community improvements, local job market, sporting facilities, arts and entertainment. Within the Phoenix/Scottsdale area there are so many recreational reasons to buy in various areas; there is certainly something for everyone.
4) Hire your local Real Estate Agent – Make the best financial decisions with a full time local realtor that specializes in resort properties. Not all homes are alike, and a critical step is entrusting a good realtor with your goals. They can help you plan out your transition, help you get to know a market, and often prepare you for some unseen steps along the way. Look for individuals with the RSPS designation. That stands for Resort and Second Home Property Specialists. The Tim and Kym Team specialize in Resort and Second Home properties in the Phoenix/Scottsdale area. Visit their website and customize your home needs list into an exclusive web portal with only properties that fits your needs delivered to your inbox daily. http://www.arizonaehomes.com/Second_Homes_in_Phoenix_Scottsdale_Arizona/page_1951574.html
5)Decide what type of residence is right for you- This is a key decision in your lifestyle and realistic expectations need to be addressed. Many people think of a second home and immediately think of a condo for an easy lock and go lifestyle. Make sure you think about the time you want to spend on maintenance and repair, the type of privacy you are looking for, and other amenities that are important to you. Assess your style needs-will you find an apartment style condo unit or townhome suitable to your lifestyle needs- or do you prefer the privacy and space that a single family home offers? Many communities now offer easy care and maintenance for these types of dwellings when you are away.
6)Financing- Make sure that you sufficiently plan for how you will afford and pay for a second residence, will the purchase be financed? There are significant differences in qualifying, rates, and initial investment between a primary residence and a second home. Make sure you speak with your banker or a reputable lender to discuss options and affordability.
7) Additional Expenses- Don’t overlook other expenses such as insurance, taxes, and maintenance fees. HOA or home owner’s association fees can vary widely depending on the community and amenities offered. Fortunately, most homes in the Phoenix/Scottsdale area are not at a high risk and insurance is quite affordable. A good rule of thumb for calculating taxes is approx. 1% of the purchase price annually. 2% of the purchase price should be factored in as repair and maintenance costs annually.
8)Consider Fractional Ownership In many circumstances, individuals are purchasing a 2nd home that they intend to use more regularly in about 3-7 years. In the interim, you may find yourself shelling out a lot of money compared to the amount of time you are there. Often, a good way to overcome this obstacle is to purchase with family or friends, pool resources, and use of the property.
9) Look into Tax Benefits- How you use your second home will determine the tax advantages you may have. If you rent your home less than 15 days a year, you do not have to report the rental income, but cannot deduct any rental expenses. If you rent your home more than 15 days a year, you have to report the income, but also can deduct the expenses. Check with your tax advisor for further details on tax benefits with a second home.
10)Vacation Rentals- If you need extra income to support your investment, renting out your home could be a good strategy. Being a landlord often comes with more responsibility than most people realize, make sure you become familiar with landlord/tenant laws in your state and the Fair Housing Act before you begin.
How would you like a Resort Property Specialist that will help you take into account the above information and put it to best use for you? How about someone you can trust with specific knowledge of the property you are looking for? How about someone who is going to negotiate to obtain the best price and features for your needs? In the Phoenix/Scottsdale metro area, that specialist is a clear choice. The Tim and Kym Team have helped hundreds of vacation and second home owners find their perfect paradise. Simply visit their website and fill out the Vacation Home Inquiry form to get started on the right path to your dream of resort living. http://www.arizonaehomes.com/Second_Homes_in_Phoenix_Scottsdale_Arizona/page_1951574.html