Everything You Need to Know Before Buying Your Dream Second Home

Buying a second home is a dream for many. Whether it’s a place on the beach for summer vacations, a cozy cabin in the woods, or a ski lodge in the mountains, the idea of a getaway to call your own is hard to resist. Beyond getting a mortgage and finding that ideal property, though, there are implications to second home ownership that extend beyond that dream.

If you understand what to expect before you buy, you can avoid disappointment and make sure that the dream of owning a second home holds up to the reality of owning a second home.

Owning a Second Home is Expensive – Beyond the Purchase Price

It’s no secret that buying a second home costs money. The less obvious part of this reality is that owning a second home is also an expensive venture. Beyond the monthly mortgage payment, you have annual property taxes and monthly utility bills that need to be paid no matter how often you visit the property.

The costs associated with maintaining a second home are also higher than the costs of maintaining a first home. A first home usually gets regular use and attention. Second homes that sit empty for months can see maintenance issues take hold. Heating systems can fail, pipes can freeze, and mold can develop if no one is there to notice an issue.

If you plan for ongoing expenses before you buy a second home, your finances will survive the purchase! Some second homes require more upkeep than others. Properties near the coast are battered more by storms and high winds. Homes in flood zones are exposed to the elements in different ways. Areas with extreme temperatures have their own maintenance challenges.

You’ll Need Different Kinds of Insurance

Second homes require different insurance than primary residences. Standard home insurance policies are not written with the fact in mind that second homes will often sit empty for long stretches of time. Second homes face different risks when it comes to break-ins, weather damages, and issues related to empty homes that go unnoticed.

Getting proper home insurance for second property ownership ensures coverage actually reflects how the property will be used. Policies for second homes account for periods of vacancy and provide protection that standard home insurance might exclude or limit.

Some insurance providers will require you to implement specific security measures in order to qualify for second home insurance. Your second home insurance policy might require you to install window locks, burglar alarms, or require that you have someone monitoring the property while it is not occupied.

Contents insurance for second homes also has some different considerations. If the home is empty for long stretches, it will need separate insurance on any belongings it contains. Standard contents insurance policies may not apply to items in homes that are not occupied.

Location is Different Than Buying a First Home

The location of your second home will affect everything from how often you use it to how much it costs to own. Properties far away from the owners may not be used as often as they thought they would be. The value of the property as a getaway diminishes when owners have to balance long road trips with their desire to spend time there.

Costs associated with second home ownership near popular second home locations are generally higher. Properties that are closer to the owner may be used more often but they also cost more in property taxes and utilities.

Second home property location should also take into account amenities in the area. A property that is isolated might be easy to find but difficult to get to. Second homes that are not close to shops, restaurants and attractions are less valuable to their owners. A second home that is far away from grocery stores, gas stations and shopping won’t be an attractive property.

The lives of people who buy second homes change over time. The cost of buying a second home is not something people can ignore when those changes happen.

You’ll Need to Manage It Differently Than You Do Your Primary Residence

A second home needs to be watched while it is not in use. Issues that develop in a home can be addressed faster by people living in the house. When no one is around those issues can quickly develop into expensive headaches.

Burst pipes, broken windows and roof leaks can all go unnoticed for weeks if no one visits the property. Second home owners in some areas arrange for someone who lives nearby to keep an eye on the property while they are gone. Others organize for a neighbourhood watch.

It also needs someone to monitor its utility use. The heating system has to remain on to avoid freezing pipes but this adds a hefty bill to houses that sit empty for long stretches of time. Someone has to check every so often to make sure the water system does not stagnate.

Make Sure You Are Going To Use It Before You Buy One

A second home needs to work for you after the thrill of buying one wears off. Before you decide you need one, think about how often you think you are going to use it.

If you think you’ll only use it three or four times a year, maybe think about whether you should be buying one in the first place!

People buy second homes for various reasons: a place for families to gather, future rental properties and with plans to use them for retirement. Unless people will be using these homes regularly, though, these dreams take time and money to develop.

Second homes can be a wonderful addition to your life if you plan for it before you buy it! If a second home fits into your life (and your budget), buying one can be one of the best purchases you’ve ever made.