With COVID-19 numbers starting to decline, and domestic and international travel curtailed, many people are considering the purchase of a second home. Some of our clients are looking in Flagstaff and Payson, while others are checking out cities and towns in neighboring states.
This year has really made owning a second home a feasible option as so many people are working and schooling remotely. However, with everything that has happened in 2020, it is not surprising that drivability to that second home is a prime consideration.
If you are considering the purchase of a second property in Flagstaff, Carlsbad, Taos, or Tahoe, here are a few things to consider before you buy.
How Often Will You Visit?
Pre-COVID, getting to a second home could be challenging with the coordination of vacation days and school breaks. As we find ourselves less tethered to a specific location, the question becomes, “What time of year will we want to live in our second home?” Will you visit in the summer or winter months, and how will that factor into spending time at the property when normal life returns.
How Accessible is the Property?
Is the second home a three-hour drive or less? Or does it take two plane rides and a four-hour rental car trek to get there? Is it feasible to just go for the weekend? Answering these questions will also help you answer How Often Will You Visit.
Are You Planning on Renting the Property?
Renting a second home can be a great financial tool. However, if you want to use your beach condo in the summer, your usage may conflict with your rental goals. Would you be willing to give up time at your second home during the prime season? Does the property have multiple seasons and would you want to be there at those times, too? If you are banking on rental income, will you be able to carry the costs when you have off-season vacancies?
What Are the Actual Carrying Costs?
If you have been bitten by the second house bug, you probably have already run numbers through an online mortgage calculator and worked the costs of the second mortgage into your budget. Just be aware that getting a mortgage on a second property can be more challenging, and typically comes with a higher down payment and interest rate than a loan for a primary residence.
Take careful consideration of whether the property needs mechanical upgrades and renovations — expenses that will not be rolled into the mortgage. Also, evaluate other expenses such as HOA fees, property taxes, insurance (is there additional flood, wind, fire insurance?), utilities, yard maintenance, cleaning costs and property management fees.
Are You Ready to Furnish Another Home?
After a few days of house hunting, you may have already made a list of everything you could use from your current home to furnish your second home. However, will it make sense to ship everything? Will you have the time/budget to furnish a new home? It might just be worth trying to negotiate the furnishings into the purchase of the home you are buying!
How Many Times Have You Visited the Area?
Our vacation selves find it exciting and liberating to be spontaneous. But, if you are about to make a major investment, take a step back and plan for another visit. For example, Seattle is paradise in July, but will you still love it in October, December and March when your kids have vacation school breaks? Maybe signing a year lease is a better way to test the waters.
Have an Advocate
Make sure you are working with an experienced real estate agent who will help you navigate the negotiations and inspections of your second home. Since you may not know the area, it is important to have someone with local expertise who can guide you through everything from building restrictions to community issues. Are there restrictions that will prevent you from renting your property? What are the labor costs in that market for doing a redo on your great find? Be sure to get the scoop from an expert. We know agents in many markets and are happy to refer you to someone who can help!
Figure It Out and Go For It!
Life is short and getting away is priceless. Perhaps this second property will bring you closer to family or maybe just having that place for a regular escape will inspire you in new ways. If you are thinking that your second home will be a place to retire in the coming years, it may also be easier to buy this property now while you are still working.
Don’t hesitate to call us with any questions and then just go for it and enjoy your new adventure!
John and Natascha Karadsheh are co-owners of KOR Properties, a boutique real estate brokerage serving the Valley of the Sun, and the creators and founding sponsors of Mesa Food Truck Fridays.
John has been a Multi-Million Dollar producing agent for over 17 years and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS), and is the Chairman on the Arizona Regional MLS Rules & Policies Committee.
Natascha is an Associate Broker of KOR Properties, a Multi-Million Dollar Producer, Past-Chair of the City of Mesa Economic Development Advisory Board and the founder of the Falcon Business Alliance.
You can reach John at (602) 615-0843 and Natascha at (602) 909-4995, or visit their website: KORProperties.com.