“…I love it here. Should I buy a second home?”
Um hang on! Buying a vacation home is a BIG decision, and it’s easy to get blinded by the palm trees and swimming pools. Let’s dive into 5 questions you need to ask yourself FIRST.
Hey everyone, welcome back! I’m Lindsay, with the Wise Move AZ Team at Realty ONE Group. If you want to stay up to date on all things Anthem and Real Estate then you need to subscribe to our YouTube Channel. Pro Tip: You’re also going to want to hit that little bell icon when you’re there so that you’re the first to know when our new videos are posted every single Thursday!
As your Anthem, Arizona REALTOR® I love working with out of town buyers looking to purchase a second home. We’ve worked with a number of families, usually from cooler climates (I’m looking at you Canada), who want a place where they can kick back, relax, and enjoy the sunshine while everyone back home is getting buried in snow. Sounds pretty good, right?
Now, I’m sure some of you are thinking, “great here’s a REALTOR® ready to sell me on all the benefits of owning a vacation home”. Wrong! Owning a vacation home is NOT for everyone and our hope with this video is that you ask yourself some of the tough questions to decide if it’s even something you should consider. I mean, I’d love to have a house on the beach to escape to in the hottest part of the summer, but the truth is, it’s not going to happen for us right now.
Ask yourself the Tough Questions First
So, in no particular order here are 5 questions, I think you need to sit down and think about carefully before you pursue the thought of a second home.
#1: How much time will you have to spend at your second home?
This one is important! For example, if you only have 3 weeks off work each year, it probably doesn’t make sense for you to consider a vacation home at this point. The cost of renting an AirBnB or hotel room for those 3 weeks would likely be less than owning and paying the monthly expenses on for a whole year. On the other hand, if you are able to spend several months at a time at your vacation home, it starts to make more sense. Sit down and think about how much time you would realistically spend at your second home each year.
#2: Can you afford a second home?
Yup, the dreaded “F” word! We have to talk about your finances. Did you know that a second home can be just as expensive as your primary residence? Could you afford to pay cash for the second home? If not, you need to think about the cost of the mortgage. This would be the time to sit down with a lender and a REALTOR® in the area and chat about your options. You need to know how much homes cost in that area and how much you could afford.
In addition you need to think about all of the other monthly expenses that go along with home ownership. The easiest way to do that is to look at your current monthly expenses and see which ones you will also need to account for at the second home. This may include things like utilities, internet, landscapers, a pool maintenance company, pest control, insurance, and so on. I recommend building a budget on a spreadsheet, but I’m a nerd, so feel free to do this however makes sense for you.
#3: Do you prefer to travel or stay in one spot?
If seeing the world is on your bucket list then buying a second home might not be in the cards right now. On the other hand, if you like going to same place regularly, then buying a second home will start to make more sense. Think about this one. Buying a second home can be a great investment for your family and can be a place where you can make years of happy memories, but if it’s not a good fit, it could start to feel like an anchor.
#4: Who will look after your home when you’re not there?
For the most part you can’t just leave your home unattended for months on end. You could have a leak, the fridge could go out, pests could move in, you get the point, it can be risky. Earlier this year I interviewed Henry Barrie, of Barriecade Home Watch Services. He specializes in taking care of people’s vacation homes here in Anthem and he shared some really great tips about preparing your home for extended absences. I will link to that video here, so that you can check that out and get a sense of the work that is required. Also, it is important to know that some insurance providers won’t cover you if you don’t have someone checking in on the house regularly. You need to think about if there is someone you trust that can check in on your house for you while you are gone.
#5: This one might surprise you. Should you just move?
We have worked with a number of clients who set out with the intention of buying a second home in Anthem and end up making it their primary residence. For many people, they really love the place they are considering a buying a second home, but they feel like they NEED to keep their primary residence because of family, friends, and other commitments.
This is another one I want you think about carefully. We know that life is complicated and every family is unique, but consider if those needs are real or if they are something you think you should do because you’re worried about how others will think or feel. Chances are, if you made the move full time, and sold your primary residence you could keep your monthly expenses down. Could you stay with friends or family when you go back for visits? Would you be happier in the new place? What would life look like for you if you took this adventure to the next level and just moved.
So, there you have it! Did these questions make you think? Keep in mind, these are just my thoughts, there are always exceptions and there is no “one size fits all” solution here. For example, if you could buy a vacation home and rent it out as an income property while you’re not using it, that would change everything, If you want to run the numbers together or chat about your specific situation, don’t hesitate to call me (623.216.5075) or email me (Team@WiseMoveAZ.com).
See YOU, next Thursday!