With the ever-fluctuating cost of housing, buying real estate can be one of the best investments a person can make. However, a lot of important factors can be left out of the final decision when it comes to purchasing a home as rental property.
If you are taking the initial steps to invest in a second home, here are some important things to consider before you make the financial commitment.
The Distance To A Destination
Many people who purchase second homes to rent out choose to buy in places that are sought after, whether it’s a trendy area or beachfront property. While buying a home in a popular area may end up being good for your bank account, areas like this can often be out of the way and will take a little bit of car time to get to. If you’re doing the landlord duties on your own, this may take up a lot of precious evening and weekend time.
A Potential Vacation Home
There is certainly a great financial boon to be found in a home that you can rent out year round, but if you’ve purchased in an enviable location, this can also be a great place for you to take your family for a couple weeks out of the year during low-rental season.
While this may mean no rental income for a time, the savings of having a home at which to hang out can make up the difference. Of course, if it’s a place you won’t want to vacation, it may not be the right choice for you.
The Possibility Of Additional Income
If you’re planning to purchase in a cool new area or by a university, there’s a good chance you’ll have no issues finding a good renter as long as you have a nice property. However, while renting out a home can seem pretty straightforward, it’s necessary to consider how many months out of the year the place will actually be rented.
Many people go into this type of purchase expecting it to be occupied all year around, but demand can shift from season to season and this will directly impact the upside of your investment.
There are a number of benefits associated with owning a second home for rental property, but it’s also important to be aware of the financials downsides that can come from taking on another property.
If you are currently considering an investment property, contact one of our local mortgage professionals for more information.