3 Essential Tips for Buying Your Second Home
The time has finally come. After scraping together all of your savings to buy your first home, you’re now in a position to sell up and get the next one.
1. Make a list
Chances are it will be the kind of house you wanted when you were first looking to enter the market, but couldn’t afford. Now you’re in a better financial position and ready to get that little bit closer to the home of your dreams.
Growing families are a common reason for trading up to a second home. The house you choose might still need to have some work done or improvements made, but if you get the important things right, you’ll be set to stay put for a long time.
Or maybe you did buy your dream home first time round but find that it no longer suits your lifestyle.
Perhaps you want to move closer to schools, or to leave the inner city behind for a bigger suburban block. Maybe you’re just ready to upgrade to something more modern and easier to maintain.
Whatever the reason, there are some important things to look for when it comes to buying your second property.
Let’s look at it in detail:
Write down all the things your second home must have, or offer the potential to have, for example an ensuite or fourth bedroom. Writing down your must-haves will help you stay focused when it comes to finding a house to suit your needs.
2. Understand the costs
Talk to your financial institution to work out exactly how much you can borrow
and the costs involved.
Things might have changed since you bought your first home. You will need to factor the following:
3. Don’t sweat the small stuff
- stamp duty,
- agent fees and loan fees,
- bridging loan costs (if you want to buy before selling your current home),
- building and pest inspections, legal fees, registration costs,
- lenders’ mortgage insurance (if borrowing more than 80 per cent of the property value),
- insurance costs (if you’re moving to a flood zone, for example, your insurance premiums could skyrocket),
- moving costs,
- council rates or body corporate fees and charges for contract changes (internet, phone, TV subscriptions, electricity, gas, water).
Once you start looking you might be disappointed that the homes you’re seeing are not quite ticking all of your boxes.
Just remember it takes time for a place to feel like home. Attend open houses and imagine yourself and your family using the different rooms and outdoor areas.
You can always buy a new oven for the kitchen and it’s easy to add extras like air-conditioning later.
Factor in the cost of these additions but remember, the home’s liveability and location and whether you feel happy in it is what matters most.