Investing in a second property can be such a daunting task. When looking for second property, you are looking for one that will satisfy your needs, one that is easily accessible and one that satisfies other factors such as an increase in future value. This article is here to help you get the best property by giving you an idea of what you should be looking for.
Why are you buying?
The reason or reasons for buying a second or holiday home will determine the choice and location of the property you want to buy. When looking for rental investment, you may have different considerations than when you are looking for a retreat.
If your main interest is gaining capital, then you may likely choose a different destination than if it were for a retirement pad. Many people usually want a second home to be 'mixed use' i.e. they would like to get rental income and also use it for themselves, family and friends.
If the value increases as time goes by, then this can be a bonus! Since it can be hard to find all these factors in equal measures, it is a good idea to decide what is most important to you. This will make the process of finding a second home much simpler.
Where should you buy?
When looking for an area to buy luxurious condominiums, you need to consider transportation services to the area. Access is one of the most important factors to consider. If you want somewhere to escape to during weekends, it may not be a good idea to buy a home in Australia. Buy somewhere that’s accessible.
Consider the transportation services to the area and check the road and rail systems. Do low-cost airlines operate in the area? It is important that you consider the kind of surroundings you are looking for, the nightlife, scenery, food and various other factors.
Remember to check the weather as some areas have good weather throughout the year while others have low seasons where the shops and restaurants are closed down. I will suggest that you narrow your search area by using "ever decreasing circles".
This method involves choosing a country, then choosing a region, then a town until you can find a specific location you can focus on and search there.
What should you look for?
Come up with a list of things you are looking for in a second home.
- Do you need a garage? Is a garden essential?
- Do you want an apartment or house?
- How many bedrooms?
It is wise to decide on items that are non-negotiable and those that you are willing to compromise on. You also need to think about the style of property. You may like a stone-built farmhouse found in a rural area but the question is, will it earn you the rental income you need? Perhaps the maintenance will be unmanageable?
When is a good time to buy?
Properties bought at the bottom of the market usually make the most profit. You can spend months checking the market conditions and predictions for maximizing capital growth. However, it has to be the appropriate time for you.
You may spend years waiting for the right time to buy only to realize that you have missed the boat. People usually avoid buying in a downturn due to the uncertainty of the investment or because they can't arrange the finance.
What most people don't know is that the most competitively priced properties can easily be found in a downturn. Even though this may sound obvious, historical data shows that properties bought at the bottom of the market make the most profit. Therefore, in a buyer's market, you have room for negotiation.
Now that you have decided why, where, what but what about how? A major purchase like this will require some planning and budgeting in advance and research the options open to you.
If you have ready cash, talk to a currency expert who will advise you on how to get the best deal at the best time. If you are considering a mortgage, decide whether you need a US or international mortgage and how this will affect your income and currency exchange rates.
This will enable you to know the amount you will have to spend and help you find an attractive buyer. In all cases, you need to consult a legal advisor who can work in your best interests and help you have a peace of mind knowing that you will soon have a wonderful second home that will be comfortable for you to stay in.
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