Create a clear plan and an all-inclusive budget before you set your sights on purchasing a second home.
Buying a second home is just a big upgrade, whether you're laying claim to your preferred vacation spot or having a first step into real estate investment.
But the expense associated with purchasing and maintaining another home add up fast, and vary considerably depending on how you utilize the property. Mortgage options may also be based on your plans for making use of your second home. Here's making sure you're ready.
Reasons to get an additional home
There are plenty of scenarios in which a second home makes sense:
You want a vacation home, simply as a typical getaway or as a spot where you'll eventually retire.
You need a commuter home, as you or your partner work far enough from your primary home to make a daily drive or train trip untenable.
You wish to invest in real estate by buying a second home that you'll either rent out or flip.
You're looking to upgrade by getting into a new house but keeping your overall home as a rental.
You're purchasing a home for a family member, perhaps to keep your parents near by or to give your college student a campus-adjacent pad.
It's very important to be clear about your plans because the manner in which you use your second home affects your financing options and ongoing costs, and of course the location and type of home.
If you will want commuter home or housing for the scholar, purchasing a condo may make more sense than the usual detached single-family home. A rental house or even a flip will need to attract tenants or buyers in order to be a sound investment. A vacation home that doubles as a short-term rental may be difficult to handle all on your own in the event that you don't live nearby the destination.
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