Does it make sense to buy a second home for your family? Owning one home is enough of a financial commitment, so what will it mean if you have a second one? Still, many families opt to do this for various reasons, plenty of which make perfect sense. Today’s post will look at the idea of owning a second property, why you might do it, and what you should consider before taking the plunge. Strap yourselves in and prepare for what’s in store:
Why might you buy a second home?
Under what circumstances will it make the most sense for your family to own a second home? Typically, these scenarios are the best:
- You want a holiday home in a different country
- You want a second home closer to your parents/extended family
- You need to temporarily move for work and want a place to stay
Most of the time, it’s the first option that encourages people to buy a second house. Having a holiday home in a different country means you instantly get free accommodation for your holidays. You can travel to the country without worrying about searching for hotels or places to stay. It’s a very popular idea, particularly if your family goes on holiday to the same place all the time.
In truth, this idea will often merge with the second one. If you go on holiday to visit family in another country, you may be inclined to buy a second property to act as your holiday home, but also to bring you closer to them. Alternatively, your family might live in the same country but a few hours away. So, buying a second home gives you an excuse to travel to see them and stay for as long as you like. Many families do this, using their second home during any school holidays throughout the year.
The final one is less likely, but there are cases where people have to move away to work for a year or so. You know it’s temporary, so you don’t want to sell your current home. Instead, you buy a second one in the new work location, giving your family somewhere to stay without worrying about rent payments or lease agreements.
If you are in any of the situations described above, it might be a good idea for your family to have a second property. But, what are the benefits of this?
What are the benefits of owning a second family home?
Naturally, there are many advantages you may come across when you have a second property at your disposal. This will normally include:
- More space for your family to enjoy
- A new home in a new location to take advantage of
- A money-making opportunity for your family
- Extra investment to add to your financial books
Tackling the first two benefits, a second family home will give you more space to spread out your belongings. While you won’t technically live in both at the same time, you can use both houses as storage space, meaning neither of them gets too cluttered. Also, and this was something that wasn’t mentioned in the first point, you may buy a new home and move into it. The new house could be more spacious and comfortable for you to live in, leaving the old one to become a potential rental property.
Speaking of which, having a second property means you can potentially make a lot of money from it. Whichever home you don’t live in permanently can be used to rent out to other people. Your holiday home can be used as a holiday home by other families until you plan on visiting it. By offering short-term rentals you can earn a tidy bit of income on the side, which can help your family finances.
Similarly, a second house is an investment. You now have two properties in your portfolio, giving you two assets to hold onto and sell in the future. This can put you in a very commanding financial position later in life.
What should you think about when buying a second property?
What things need to be on your mind before you go out and buy a second property? Clearly, the main thing is whether or not you can afford it. This is a discussion you need to have with your partner – and probably a financial advisor. See if you can afford to buy a new home, while still possibly pay the mortgage on your current one. If you recently ran into some unexpected wealth, this might not be a problem for you. However, a lot of families would like a second home, but they can’t afford one.
Another consideration is the type of property you will buy for your family. Again, this depends on the reason you are buying it. If it’s just a second place to live while visiting relatives or going on holiday, you could look into things like condo complexes or apartments. But, if you will get more serious use out of it, you may want to consider getting a traditional house instead. A villa is also a great option for holiday homes, so bear all of this in mind.
Finally, think about how you will look after the property. If it’s far away and you have tenants renting it out, you may need to pay for a property management company to look after it for you. This links back to the previous point on whether or not you can afford this. In an ideal world, you can maintain your second home by yourself, while also looking after your main one.
To conclude, buying a second home for your family does make sense in many situations. However, the main thing to understand is if you can afford a second home or not. If you can’t, then you shouldn’t try to buy one as it will be too much of a financial burden. If you can, then there’s nothing wrong with getting your hands on an extra asset for your family.
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