Buying a second home or vacation property may be more difficult today than it was during the boom but there are some guidelines to remember when buying in a volatile real estate market. Economic conditions can change relatively quickly so what you may think as a sure bet, could turn out to be a bust, from an investment standpoint.
Some investment markets could have declined as the cold winter set in and heating prices skyrocketed while some coastal and vacation markets could have continued to increase in value. The market is always in flux and there are so many intangibles that effect the home value that you can never be completely sure.
The best way to avoid a real estate pitfall is to do as much research on the market as possible. Being well read on all the various nuances of a potential real estate market will make sure you avoid any obvious disasters and choose a market and property likely to succeed. There are many examples of things to look for and I’ll outline a few here.
Real estate bubbles can break and leave you losing money. When looking for an investment property or second home, choose a well-established area that will sustain its value much better.
Don’t let your emotions sell you on a home. Sure you may love that property you see on the California coast but will that expense, which you can barely afford, be worth it in the long run? What if the property doesn’t increase in value or hold value like you thought? Will you be financially destroyed?
Buy in an established area that has the potential to be rented out. You never know when you will need extra cash quick and renting a nice property can prove to be a life saver, and a property saver. Also, rent by owner instead of using a property management system, you can save a lot of money doing it yourself.
Choosing to do the research on a property before buying can prove to be an immense help in the long term when buying a second or vacation home. Following some simple guidelines can also help you avoid some real estate pitfalls that effect hasty buyers.