Finding A Good Renter

Lets just say that you did all your research and you decided that a second home/investment property was the best way to go. One way to help pay the mortgage is to find someone who is looking to rent a home.

Typically people that are looking to rent homes either do not have good enough credit to apply for a home mortgage or they can not afford to get a home on there own. These types of people sometimes are the not the easiest to work with!

I speak from experience when I say this! For example my fiancé’s brother bought the home next door to our home for investment purposes and he decided to help with the cost he would find some good renters. Well I personally saw him shuffle through tons of different people to rent to. At the end of the day there was just no one that fit the bill.

A great way to find a good renter is to ask close friends and family members if they know of anyone who is looking to rent a home. If you or someone close to you knows the person you have a lot better chances of that person working out. My fiancé’s brother finally ended up asking our great uncle if he wanted to move in and rent the space because he was currently very unhappy at an apartment.

Well it all worked out for him! Next time you are in the same position always remember that people know people that know people…..

Tips About Investment Properties

When you are looking into purchasing an investment property make sure you have a clear head. Most people purchase a second home for personal use about 78%. The number is growing for the percentage of people that purchase a second home for an investment property. In 1999 only 20% people purchased properties for investments and now the percentage is 37%!

If you are focusing on appreciation value you want to make sure that you are in a prime location for example on the beach, not near the beach. The economy can be red-hot one minute and then cool way down the next; you want to be in the best position possible.

Always be ready to spend more money on investment properties. Be prepared to pay lenders about 1% higher on investment property vs. a regular mortgage and expect higher down payments up front.

Be educated and beware of time-shares! No matter what anybody says a time-share is not an investment property. Always approach a join ownership with caution, many people cannot afford a second home so they think that sharing the cost with a close friend or relative is a good idea. This is not always the case! Before you get into a situation like this think twice you might really regret it later!

I hope these tips help you make the right decision about purchasing an investment property!

More to Consider For a 2nd Home

Last week I wrote about things to consider when looking into buying a second home. This week I wanted to continue with more things to consider before purchasing a second home.

You have to have a significant disposable income to own a second home. So another thing to keep in mind is know what your budget is! Most people that have enough money to own a second home make around 85k a year! Make sure that all of your other expenses are taken care of such as having all credit card bills paid off and having an emergency fund available of at least 6 moths expenses saved up. Also never forget college funds and your own retirement! Once you have double checked all of those factors you may be on your way!

A good thing to remember is the tax breaks! The mortgage rates and property taxes are usually deductible on a second home. Anymore then two and you are out of luck! So keep that in mind.

Always look at the pros compared to the cons. If the cons out way the pros then wait until it is the other way around to purchase a second home. Good luck!

Tips for Purchasing a Second Home

When you are considering purchasing a second home there are many things to consider;

First of all you need to really know yourself and think about if you are the kind of person that loves to visit new places and be catered on hand and foot like your favorite hotel, or do you like to go the same place for vacations. If you are the type of person that likes going to new places you might want to reconsider a second home!

Another thing to consider is how long you plan to own the second home. Usually people plan to own the property for there whole lives but is that realistic? If you plan on having children is this option, most properties are not as flexible when it comes to children as you would think. For example the nice house by the lake, would be a nightmare for a parent who had a little toddler running around!

Consider all of the costs that are involved including home repairs, utilities, second mortgage, insurance, golf dues, membership dues, etc. Some people are so excited about the opportunity to own a second home that they forget all of the different costs that go into it!

Try to keep all of these things in mind and always do all of your homework!

The State of the Economy

If you are one of those people who are not worried about the state of economy and you want to buy a new home right now here is some advice that will help point you in the right direction.

First of all take the time to find the right place. Do not pay attention to seller’s asking price and bid 10% lower then what comparable homes are selling for. If the seller does not want to budge then move on!

Mortgage rates are low so right now is the time to buy, waiting could be more costly! Financing is getting more expensive the so the longer you wait the more you pay in financing. Also even if prices fall more there could be a penalty for waiting!

Always strive to purchase a home in a neighborhood with good schools. Schools with higher rating represent stability, and especially right now that is very important. If you are looking into a foreclosed property that usually reflects instability if there are a lot of them in the area, this could mean a lower quality of life which you want to stay away from. When you are buying a property you are also buying the neighborhood, so keep that in mind!

I hope these suggestions help you make the right decision.