With the interest rates at an all-time low, now is a good time to purchase an investment property or second home. Homeowners purchase a second home for one of two reasons – as a vacation home or as an investment. But why can't it be both? For those who don't mind renting it out to pre-screened short term renters, a second home could be a retreat away from your busy life and a money-making rental property!
As with any big ticket purchase, you need to be smart and savvy about where and in what condition to purchase your second home. Here are a few things to consider:
1) Look for a Low Maintenance Home – Who wants to spend their vacation fixing things, cleaning the yard, or doing basic maintenance work? Most vacation homes are located seafront or in the mountains, where the natural elements can wear down a property. Because you are not there all the time to keep up with the day-to-day work, choosing a solid home built with low maintenance materials can ensure that your vacation home can truly be a place of rest and relaxation when you are there.
2) Shop for Homes with Great Views and Close to Parks and Open Space – These features make your property more attractive to short-term renters looking for a vacation getaway as well as increase the re-sale value should you decide to sell. The value of your home could increase up to 60% for unobstructed ocean and mountain views. Close proximity to parks and open areas could increase the property value by 20%.
3) Research possible rental rates, whether or not you plan to rent it out – You may change your mind later so knowing how much you could rent it out for can help you make a wise decision about the purchase. Even if you don't end up renting it out, the higher the rental rate, the more attractive it will be to future buyers.
4) Consider selling your current home and buying two new homes – If you've lived in your home for a while and have built up a good amount of equity, consider using the equity to purchase your second home. If you have become an empty nester and maybe have no need for a big house, consider downsizing and buy yourself a new primary residence also. It's possible to end up with 2 new homes and have the same mortgage amount as you did with one home!
For more information about investing or any other real estate assistance, please contact us at 888-988-6248 or www.choicehomeshawaii.com
