Congratulations if you currently find yourself in the enviable position of looking to buy a second property. The equity that you stand to gain from this purchase can be considerable. Remember to plan properly to maximize your gain. Deciding what the second home will be utilized for is the first step in this process. Is it a vacation home? Or maybe a long or short-term rental? Either way, the more detailed you are about your forward planning, the smoother the process will be.
As a source of revenue
There are certain steps that you should take to ensure the home will bring in as much money as possible if you are looking at this purchase as a source of revenue. This will allow you to pay off the mortgage quickly. For this kind of investment, the cleaner the better. Nice homes are in high demand, and they bring in a good monthly rate. Enough for the mortgage payment to be made easily with cash to spare. Also, ask yourself if you are ready to be a landlord. This will involve the task of finding and maintaining good tenants, and doing what’s right for you and your property, not what’s right for the renters. Land lording might not be for you if you have the tendency to be “too nice”.
Be sure to cover all the bases no matter what your property is intended for. You should be as diligent as you were when buying your first home. You will be able to apply the lessons you learned during that process on the new home, and avoid the mistakes or areas of stress that were present in the first purchase. Most people buy a second house and then find themselves buying another. It is kind of hard to stop once you start to climb the equity ladder!