Are you considering buying a second home, maybe as a vacation home or for a rental or possibly a combination of the two? You may have been through the home-buying process before (once or several times) and think you know what to expect, but when it comes to a second home, things are a little different. So it pays to be forearmed with some knowledge before jumping into it. Here, then, are 3 important things you need to know about buying a second home in Harford County.
1. Affordability Is a Major Consideration
When buying a second home in Harford County (or anywhere else really), most people will have to take out a mortgage to buy the second home. For most, that means paying on two mortgages, at least for a while. If you’re in this boat, the affordability of the second home becomes a major consideration.
First, you need to consider whether you can in fact qualify for a second mortgage. Credit requirements have grown stricter, and that is multiplied when it comes to a second mortgage because, for one thing, your debt-to-income ratio will change. There’s also the down payment to consider. Do have access to that big chunk of cash? And then there are the property taxes and homeowners insurance for the second home.
Just make sure to carefully consider these things and whether you can actually afford a second home before taking the plunge.
2. There Will Be More Taxes and Expenses
In a similar vein, buying a second home means that you will be paying more in taxes, and you’ll have more expenses.
First, you need to understand the tax implications of purchasing and owning a second home. If the home is for rental purposes, for example, not only will you have to pay property tax, but you’ll also pay income tax on the rental income.
Then there are the additional expenses. As with your first home/primary residence, a second home will require you to spend money on property taxes, insurance, (possible HOA dues), maintenance, repairs, and upgrades. In addition, these expenses for a second home are often higher because the home may be at a distance from where you live. And in that case, you’ll have to hire more of the work done, and that can get expensive very quickly.
3. Location Becomes More Important
Location is a very important consideration when you’re buying any home or property. But it becomes an even more important consideration when you’re buying a second home, whether for personal enjoyment or as an investment property.
For example, you wouldn’t want to buy a vacation home that requires you to travel long distances to get to it or one that is located in a flood-prone area. And if a rental property is in an unpopular location or in a rundown area, it may sit for months unoccupied and so become a liability rather than an asset. A second home in the right location will ensure a positive return on your investment.
Be sure, then, before buying a second home, to research the area thoroughly to make sure it will meet your needs. You can also work with a Harford County agent to ensure that the home is in the right location. To consult an agent, just call 443-616-5486.
Your Team for Buying a Second Home
Purchasing a second home is a big step and huge financial responsibility for most people. It requires careful planning, research, and careful selection. That’s why most buyers considering a second home, should work closely with an experienced Harford County agent. When you’re considering buying a second home, be sure to contact us at 443-616-5486.