People purchase condos or single-family properties to serve as their vacation home in the area. And if you fancy one yourself, congrats! Real estate is a good investment (yes, despite the recent market troubles) and the Twin Cities will not disappoint you. However, as in the case of any real estate home buying and selling projects, it is important to observe due diligence and exercise caution when purchasing second homes.
And while you may already be familiar with the things to do when buying a second home, here is our take on the things not to do when purchasing a second home:
Top seven mistakes to avoid in second-home buying
Thinking too much
Don’t be the crowd that waits for the “right time” to make purchase property because there is none. Real estate is a dynamic market and if you’re lucky enough to find a property that meets your requirements and budget, move fast and make an offer. Don’t put off the purchase till a time when prices go down further. You may end up losing the property all together.
Thinking too little
Thinking too little while purchasing is just as big a mistake as thinking too much. Ensure you’re not making an impulse buy – purchasing a condo or home just because you like it or it fits your budget. Think the purchase through. Are you buying because you want and can afford a second home, or because you know the owner is selling off at a discounted price?Another aspect of thinking too little before purchasing is not doing enough research. You want to check amenities, crime records and other details before zeroing in on a second home.
Not thinking long term
Assessing a potential second home on the basis of your current lifestyle is a mistake. A costly one that too. Think about your long term goals as well. Would you like to retire in the second home someday? Would you want your second home to be a vacation home for your grandchildren?
Not obtaining pre-qualified mortgage
Pre-qualified mortgage will help you make a swift offer and is often the difference between buying and losing, when multiple buyers are interested in the same second home. Further, a pre-qualified mortgage will prevent you from going over budget.
Forgetting additional expenses
Ensure you haven’t forgotten to add maintenance and insurance-based expenses before making a purchase. If the property is in a flood zone, your insurance costs will be higher. Further, since you’ll be away from the second home, you’ll have to pay for maintenance.
Ignoring tax implications
Have you looked into the tax implications of owning a second home? You will have to pay taxes for income if you are renting the condo or home. The good news is you can deduct maintenance costs when filing for returns. Ensure you’re not missing out on these tax duties and benefits.
Not hiring a local REALTOR®
Online research will only get you so far when it comes to residential real estate. A trusted local REALTOR® will help you pick the right property and get a fair price.
Realty Group, Inc.
Shannon Lindstrom, REALTOR®, AHWD, CRS, GREEN
3495 Northdale Blvd NW Ste 200
Minneapolis, MN 55448