A second home can be a luxury commodity or a prudent real-estate investment. Yet whatever the core reason behind purchasing an additional property, there are plenty of factors to consider before you begin the process.
Here are a few essential thoughts to keep in mind.
What’s the purpose?
As with any significant life change, keep the motivation behind the decision at the forefront. For example, if your second home will be a weekend escape haven, choose a location that’s a reasonable Friday evening commute away.
You may be searching for holiday homes with the aim of retiring in one. If that’s the case, consider ease of access and proximity to health care. Serviced apartments are excellent options for pensioners, but it’s also important to investigate what commodities are available within close proximity of your second home, including adequate public transport.
If you’re buying with the primary aim of renting the property out, research the local market to ensure there’s plenty of demand for rental properties before taking the plunge. Buy-to-let vacation homes can be tricky to maintain, and tenants aren’t always eager to stay in a seasonally limited holiday destination all year around.
What’s the area like?
Hire a local estate agent to gain in-depth information on the neighbourhood. The knowledge, experience and market insight an expert on the area can provide is invaluable.
You’ll want to discover your real-estate investment’s destination as a resident, too. Seek out locals to chat with and refrain from assuming that your summer holiday experience applies all year around. Take an off-season trip to get a sense of whether you – or potential tenants – will find the area appealing in colder climes.
What’s your budget?
This could depend on whether you’re willing to remortgage your first property to buy a second. If this is the case, shop around for the best loans.
If you’re a cash buyer, consider all aspects of the cost before purchasing. The property may need some work, but, unless you thrive on a renovation project, a good real-estate investment shouldn’t require too much additional money.
Preparing a property for rental is another matter entirely. If letting the place out is proving difficult, be sure to have the finances to cover every scenario: six months’ worth of mortgage costs is ideal. Also, avoid the temptation to squeeze in as many extra beds as possible. Aim to create a quality experience for the tenant, as this is what will keep them extending their lease.
Another option to consider is part-ownership. Pool your resources with friends or relatives for increased buying power and to split the oft-high costs of maintaining a property.
If you’re considering purchasing a second home as a buy to let or for weekend getaways, discuss your options with our experts at Engel & Völkers. Browse our range of luxury properties online or visit a local branch for real-estate advice and tips for investment.