The past few years showed a decline in the second property market, mostly due to the recession. Homeowners simply can’t afford to purchase and maintain a second home.
However, you should know that buying a home is not a breezy process and there is a lot of guidance needed!
Whether you are buying your new home as an investment or whether you see it as a home away from home where you and your family can relax, it remains an exciting time.
A second home is seen as one of the greater assets that you will own, apart from your first home.
Additional income stream
It is perhaps the perfect opportunity to earn extra money.
Then there is also the fact that if you buy a certain property, like a farm, it could generate enough money to support itself without you having to rent it out to tenants.
Even though this might seem like the ideal choice for you as a homeowner, there are a few factors that you should consider before you take the plunge and purchase your second home:
- Make sure the property is in the right area. As you did with your first home, you need to do adequate research to determine the type of neighborhood your second home will be.
- Make sure you have enough income. If you purchase an extra home, you are going to be responsible for two mortgages. Will you be able to afford it? If not, find a way to earn extra money.
- Determine the type of property you would like to buy and what its purpose will be. There are many magnificent second homes in South Africa that people use as holiday homes, so you have a huge amount to choose from.
- Get the right people to manage your home. You need to screen managers and ensure that they take your second home as seriously as you do.
Buying a home in the wrong location can be detrimental. When reselling or renting it out, you are the one who will lose money in the end. So, do the necessary research and find out where the best area will be for your holiday home, for example.
It is important that you consider factors that influence your house price index like trends in house resale values, convenience and amenities, property tax, the quality of schools, and proximity of medical care. If you do decide to rent it out to tenants, make sure that your contract explicitly states what is expected of both parties.
Security is another important factor when buying a second home.
Considering the fact that you won’t be there for long periods at a time, you need trustworthy security to protect the house in your absence.
Always have someone check up on the house regularly. This should form part of the managerial duties of whoever is in charge of the house when you are away. Having proper insurance is also a must. It might be a bit higher than the first home, but it is better to be safe than sorry.
Taking these points into consideration, buying a second home can be a worthwhile investment.
There is nothing like leaving town and going down the coast with your family to your very own home where you have all the privacy you need.
It feels more at home than booked accommodation, not to mention the lack of stress that comes with not having to look for a place to stay during the busy summer holidays!