Purchasing a Second Home
Can We Make The American Dream Come True, Twice?
Maybe it's a piece of beach that you've been planning to build on, a time share condo you'd like to buy or that duplex in your favorite neighborhood that just went up for sale. Whatever the scenario, we'll help you know what to look for when judging investment properties, give you creative solutions for financing, and offer ways to evaluate that seeming slice of paradise.
Making An Investment In Real Estate
For many Americans, investing means real estate. A second home. A vacation getaway. An income property. Today, the three are increasingly becoming one and the same. Because in addition to being used by the family, these popular home-away-from-homes are also providing significant revenue for their owners in the form of vacation rentals. But, they aren't the only resort property people are investing in. Timeshares continue to be popular despite their drawbacks.
Owning A Piece of Paradise
Owning a piece of a resort property that guarantees you an annual vacation and the chance to use exchange privileges for other properties around the world is an alluring dream. But, for some the reality of timeshare is far different from the dream. Projects go bankrupt, trades for exotic spots don't materialize and those who bought under pressure come to regret their hasty decisions. Here are some things to remember when judging a timeshare opportunity:
Picking The Right Property
Always remember that property you consider for investment should be located in places where people want to live or recreate. Communities and their neighborhoods normally go through four-stage cycles, progressing through growth, maturity, decline and finally rehabilitation. Traditionally property values rise with growth, stabilize, then typically fall during the decline stage. The most dramatic price increases usually occur during the comeback rehabilitation phase. So, whether your interest is in recreational real estate or urban housing, you should always make a careful study of the property's location with these kinds of inevitable cycles in mind. Here are some tips that can help you uncover the best rental deals:
Taking On A Second Mortgage
If new conventional financing is required on the purchase of income-producing property, expect to put a substantial amount down—at least 30% plus closing costs that run higher than the average single family home. However, there is room for creativity: