Does your current lifestyle allow for a second home?
Now that we’ve covered some of the financial aspects on how to buy a second home, we’ll go through some lifestyle impacts to consider.
Will you be able to use your second home frequently? Or rent it out?
A second home sounds like a great idea, but will you visit it often enough? Perhaps you have pets who don’t like to travel. Or maybe you have young children who thrive on routine. Consider all of the variables in your life and ensure you’re able to visit your home − or rent it out − frequently.
Can you hire someone to take care of the home while you’re not there?
All homes, including second homes, require regular maintenance. You need to plan how you’ll take care of unexpected (or planned) work. For example, are you able to hire someone to mow the lawn, take care of the plumbing and clean if you’re unavailable?
What purpose should your second home serve?
Before researching second homes, think about your goals: Are you simply looking for a vacation home, or an opportunity to earn extra income? If you want a second home long term, consider locations that are conducive to you and your family’s lifestyles. Look into areas where you already enjoy spending time or can potentially envision settling down.
If you want your second home to be an investment, rental properties can provide a great source of income during the weeks or seasons you’re not around. But they’ll also keep you busy, since you’ll be assuming the role of landlord and taking care of your tenants’ needs. If you need help, you can consider hiring a property manager – although doing so can reduce your returns on investment.
Regardless of how you plan to use your additional property, you’ll need to purchase a second insurance policy, which may be different from your existing home insurance coverage. Your second home’s location, type of property, amenities and occupancy can all impact your premium.
And because owning another home means taking on a new financial responsibility, it can also impact your need for life insurance. Be sure to review your coverage, perhaps aligning a term policy with the length of your second home mortgage if you need to take one out.