In the last few years the second home property market has declined dramatically, due to the recession. But markets are steadily recovering and this would definitely impact the growth of second homes.This brings forward the opportunity to guide you into buying your second home.
Buying a new home is an exciting time whether you are buying it as an investment of if you if you see it as your home away from home where you can spend some time with your family. When buying a second home it could also be seen as one of your greatest assets. It is a perfect opportunity to earn extra money. Also consider the fact that having a second property like a farm it could generate enough income to support it on its own. There are many however certain factors that should be considered before you buy your property.
- Make sure the property you buy is in the right area, research your area.
- Make sure you have the extra income.
- Determine what property you would like to buy, there are many magnificent second homes especially in South Africa, so you have a vast amount to choose from.
- Have the right people to manage your property.
Buying a home in the wrong location will not be a sound investment and when reselling or renting out the property you will ultimately be on the losing end. Do some market research to see whether it is viable for you to invest in a holiday home and whether it is to your own personal preference when your aim is to use it as a holiday home. It is imperative that you look into factors that influence your house price index for example – trends in house resale values, convenience and amenities, property tax and the quality of schools and medical care in the area, as it would also be a consideration to the tenants when renting it out decide on whether you plan on renting for short term or long term, and make sure that you understand the terms and conditions of both, as well as fraction in regular maintenance costs.
Security is also very important when you buy a second home. Taking into consideration that you will not be there for long periods of time means that you should have good security (combine this with the previous periods of absence). Always have someone to come around and just check the property regularly, which should form part of whoever manages your property. Having proper insurance is also a must, the biggest mistake one can make in having a second home is not having your insurance in order. The insurance for a second home might be a bit higher but is at utmost importance.
All together taking all these points into consideration, buying your second home could still be worth it. There is nothing like going down to the coast with your family and not having to worry about the stress of booking accommodation. It also feels much more at home when you do have a second home, you can decorate your home to your own personal preference. Also with markets now looking more stable there are great investment opportunities for you in buying a second home.
By Jacques Erasmus
Engel & Völkers Southern Africa