Should You Buy a Second Home?

A second home can be a great investment financially and in other ways, but only if it is the right time and it is a fit for your lifestyle. It is a huge lifestyle decision that will impact how you spend both time and money. Below, we go over factors you should consider before you decide to buy a second home or vacation home.

1. Financial readiness. The most important starting point is to review your finances before you make a second home purchase. You need to make sure that you would be able to afford the mortgage on the second home, while still keeping up with your existing mortgage (if you still have one) and all your other regular expenses. On top of that, you need to ensure that you are still able to keep putting away money for other savings and investments as you continue to work toward your retirement goals. If you are already retired, you will have to check if your new financial situation will be able to support the lifestyle you want in retirement once you buy the second home. Think about other goals you might have for the future too, like if you want to be able to fund your kids’ or grandkids’ college educations. Will you still be able to make progress toward those goals if you buy the second home? If you meet all the requirements for financial readiness, you can consider taking the next steps. But there are still a few other things to think about.
2. Planned use for the second home. Do you have a clear vision for how you want to use the home? Do you want to rent it out part time or full-time? Do you want to live in it? How much of the year do you plan to spend there, and do you think you’ll be there every year? Do you want to share its use with family or friends sometimes? Do you plan to change how you use the home in the distant future (i.e. move into it someday full-time)? You should only get a second home if you pretty strongly know what you will do with it. This will help you figure out if it really fits your lifestyle and will help you reach your financial goals.
3. Maintenance and management. Think about the upkeep you have to do on your primary residence. A second home will also be subject to wear and tear, and will require routine maintenance. Sometimes, it’ll need repairs. You need to decide whether you’ll do that work yourself or hire out for it. Will you be up to traveling to the home when you need to oversee work or check on it (or do that work)? And if you will have tenants, what is your plan for managing them? Even with a property management company, you will still be doing some manual work. It’s easy to underestimate what being a landlord involves.
4. Emotional factors. Are you thinking of getting a second home purely because you’re bored being in one place all the time? If so, a second home probably is not going to fully solve that problem. In time, you may also get bored of the second home’s location, and the longing for newness will return. If, on the other hand, you are thinking of getting a second home in part because you truly love the area it is in, that is a much stronger emotional justification for doing it. You are not likely to fatigue of the area, and will continue to enjoy the house for many years to come. In short, you are running toward something, and not away from something.

Buy a Second Home in WA or CO

If you have read through the list above and feel like this is the time to move forward with a second home, it may be time to shop for a home loan. Blue Square Mortgage is based in Seattle. We can help you apply for a mortgage to buy a second home in Washington State or Colorado. To get started, please give us a call at (206) 352-6453 to schedule your mortgage consultation.