Despite a depressed housing market over the past few years, interest in buying second homes and investment properties has held its own. Real estate lawyers in Bryan Texas advise that while it is definitely a buyerâ€™s market even with investment homes, it is important to know that the market continues to move. When is the right time to invest? Following are some suggestions for prospective buyers of vacation or investment homes to consider to help make such a decision.
Why Do You Want A Second Home?
The reason for getting another property will certainly dictate where the property is located and how much will be spent. A home for personal use may be located in an area preferred and enjoyed by the owner, while strictly investment real estate located where popular tourist and vacation areas are desirable may be a better choice.
Decisions such as amenities, condition, size, and style can be different when choosing personal property versus investment property. It becomes a question of what is important – personal vs. investment use – which will determine how much to spend and make it essential that the property’s purpose be known ahead of time. Even if used in both roles, this is at least a starting point to determine how to satisfy both situations.
Affordability, Financing, and Property Tax
Purchasing a second home is quite a bit different than purchasing a primary residence. Before starting to look at homes, you need to analyze finances and available assets, how much can comfortably be borrowed, and what lending rates are desired and obtainable; consider creative financing options. Working with experienced Bryan TX real estate lawyers can help a potential buyer decide if that dream house is affordable and if not, what can be afforded.
Real estate lawyers in Bryan point out that no property purchase is without extra charges – property taxes, realtor and closing fees, and many other potential fees – so be sure the complete amount can be financed. If the residence will not be rented most of the time, is the cost still comfortable. If it is not, then now may not be the right time; it may be better to wait for a better time or price rather than risk losing the second property and having to sell it at a lower price than the original purchase price.
Donâ€™t Forget Income Tax
Besides property taxes, owning a second home may involve some additional income tax considerations for the owner. Consultation with a real estate lawyer can hep a potential buyer look at possible income tax considerations. Second homes do not offer as many tax deductions even if only used for personal use. A property that is rented produces income and must be filed as such, with income tax needing to be paid.
The point here is that buying a second home – whether for a get-away retreat or an investment – involves a slightly different process than buying a primary residence. Real estate lawyers in Bryan TX can help walk a client through the entire process of finding a second home that will meet all desired goals!