5 Tips For Buying a Second Home/Condo for Investment or Vacation

Hi Folks,

   A Happy Friday to All. In our continuing series of answering your requests, today, we will be covering the process of buying a second home or condo as either an investment home or as a vacation home. We have had numerous experts weigh in on the topic, and their comments break out into 5 main tips/categories:

Tip 1 - Location:

"Look for an area with tremendous upside", says Jeffery Nielsen of MyntStyle.com. Nielsen says that he prefers to look for cities that cater to a large international audience so you are not, "tied to the economy of one country." Nancy Clement, Realtor/ Dollar-Wi$e Divas Columnist, concurs, and advises, "Buy a second home in a location that has broad appeal and lots of people are interested in living in the area". Nielsen says that you must also see whether you walk to major conveniences, i.e., "Is there good public transportation nearby (not the bus)."

Tip 2 - Purpose of Home/Goal:

Karl J Trommler, Business Development Manager with PenFed Realty, says that you need to begin by asking yourself some questions: Is it "Truly just a vacation home used only by friends and family? An income property that we will use sometimes? An income property now that will be converted to a primary or secondary residence later? Am I looking for a long term or short term investment? Am I looking for a personal retreat, a source of cash flow, a tax shelter, future income (i.e. retirement)?", and that you should, "Decide what you can afford and be realistic.- Upfront costs and ongoing monthly". Mike Smith of The Aliya Team/WEST USA Realty, says that, "Define Your End Goal. Is this second home/condo a retirement home or an investment or both? Defining this could make a big difference in what you buy. For instance, if this will eventually be your retirement home, you would want to pick a home near amenities that you enjoy (golf, tennis, hiking, etc...).You may also want to chose a single story home because climbing stairs may not be what you want to do as you get older."

Dina Goldentayer, Principle at The DS Team, Keller Williams Miami Beach weighs in and says, "Weigh the pros and cons of purchasing a home vs a condo. A full service condo can offer the the benefits of on-site security, which is vital to a residence that is vacant a few months per year. A home has added privacy, but added responsibility for upkeep of the grounds". Even more importantly, she says, "Consider the possibility that the home may become the primary residence one day, and this is especially important for Baby Boomers nearing retirement."

Tip 3 - Pricing/Finances:

"Sellers are expecting low offers. But how low do you want to go and at what cost? Appearing ruthless can ruin a negotiation to the point where a seller will no longer respond.", says Kristen Maley, an Associate Broker with BJ Adams and Company. Trommler adds that you need to, "Arrange financing before you look. - This will be influenced by how you plan to use the property. Decide what data you need and where you will get it- Loan programs and rates, zoning, tax considerations, HOA costs if any, insurance costs. Brainstorm and make a list." Clement adds, that, "What financing is available for second homes and can you qualify to purchase? Get your loan pre-approved before you shop for a home as qualifying may be more difficult for you to obtain than is true for a person who plans to live in the home full-time." Anyone who purchases or has purchased a second home realizes that this is a vital point.

Tip 4 - Team:

Building your team is essential. Maley suggests that you, "Get a broker and go look", and to, "Get a lender to help you define your buying power - before the search", and to, "Look past the circa 1973 rock walls - these are the properties that make for a good deal. The market has forced them into the lowest price ranges. Don't be afraid to take on a project in a second home." Smith adds that you, "Consult a Tax Advisor. The tax implications could be devastating if you don't collect all the facts". Sound advice!

Clement also suggests that you, "Hire a good property manger and have the person not only collect rent but do an interior inspection at least quarterly. That way you will be aware of any potential and costly problems the tenants may not want to tell you about, like a leaking toilet that could lead to an expensive to repair problem like water intrusion that could lead to a problem with mold.". Obviously, if you have tenants, this would apply, but sound advice, nonetheless.

Tip 5 - Costs:

Trommler warns us to, "Plan for unexpected costs- Repairs now and ongoing repairs and maintenance", and Goldentayer similarly states that, "Consider carrying costs and maintenance fees of a condo building, especially if it is only a part time residence."

Patrick Hohman, a 22-year Association President, advises that, "Primary tip for condo buying, is to check the difference between what SHOULD BE in the Reserves NOW, as opposed to what is actually there. Otherwise, potentially big special assessments or even worse, maintenance is neglected and property values tank."

   Overall, your strength is in your team and your dedication to the details. Do you have any additional tips to add that would be helpful to others? Please comment below.

Have a Great Weekend, and Happy Rent-to-Owning !

Baby Boomers and Rent to Own...

Hi Everyone,

We hope you had a great summer-like pre-summer weekend, and welcome back !

There is an important topic that we wanted to touch on, and that is the topic of Baby Boomers, and whether they should Buy, Rent, or Rent to Own. The last two options might strike you as odd - Rent and Rent to Own - but we will explain here.

As the first group of Baby Boomers approaches 65 years of age, the youngest of the Baby Boomers is in their mid-upper 40's. Since we are trained to think about who would normally rent or rent to own a home, we think of people just starting out in life, and looking to either rent for a while before finding a home to buy, or renting to own a property and converting it to a purchase within a specified period of time. However, this can be faulty thinking for a number of reasons, and to make a long story short, the Economy has really blurred these lines. There are plenty of folks out there who were close to retirement, and then they have lost it all, only to start all over again. In these such cases, a Rent to Own would be ideal for them, since they can still pursue the home-ownership option that they lost due to unfortunate occurrences often beyond their control.

I tried not to rant much on this, but we have seen so many people who have been hurt so badly by this economy, that it is absolutely heartbreaking. When you hear a 60 year old couple crying over how they lost their life savings and their home, and they have come to our website looking for a Rent to Own home, it is just painful. It is something that you literally want to cry over. It's days like that where we know that our site is there for people who are in need of finding or selling a Rent to Own Home, and we know that people are finding what they need so they can regain their dignity, pick up the pieces, and carry on with their lives again.


On a much lighter note, we are proud to announce that we have just surpassed 1100 Friends on our Facebook Page (http://www.facebook.com/homerunhomes), 217 Fans on our new Facebook Fan Page (http://www.facebook.com/lease2buy), and are we are now well over 900 Followers on our Twitter Page (http://twitter.com/homerunhomes). We would love to have you as Friends, Fans, and Followers on all of our pages, so be sure to check them out. Please note that our Blog Posts update those sites automatically soon after they are posted.


Have a great week, and Happy Rent-to-Owning !!