Owning a second home has many benefits, but you should keep in mind that there are many hidden costs that come with owning a second property. Whether you inherited the home, bought a vacation house, or just wanted to invest in multiple properties, you need to consider that not properly investing your second home can put you in financial and emotional distress.
Consider Hidden Costs
The most obvious cost is the mortgage. Taking on more than one mortgage can be precarious. You need to carefully examine your own finances before taking on a second mortgage. Once you look over your finances, determine whether taking on a second mortgage is feasible then consider turning the home into an investment property.
Utilities, Wear & Tear, Inspections, Insurance, etc.
These costs are a little less obvious, but they can be a risky burden. Depending on the age and condition of the home, repairs can outweigh almost all of the other costs. You will also have to get home insurance, pay utilities, get updated inspections, and maintain the appearance both inside and outside the home.
The Bottom Line: Sell, Rent, or Move In
Before attempting to sell, be sure to get an appraiser to determine the value of your home. Selling the home can be an easy way to resolve ownership but keep in mind that homes don’t always sell quickly. You may end up holding onto an empty house longer than you would like. Using a real estate agent can help, but you are still not guaranteed a quick sale. However, investing the home to a property management company easily passes financial responsibility.
Renting out the home can supplement your income and relieve you of the stress and responsibility of holding onto an empty home. You can rent the home for as long as you would like and can choose to sell at any time. Renting out your home through a property management company can also greatly decrease the amount you pay for repairs and expenses. Also, renting through a property management company helps guarantee that your home will always have renters and be a profitable investment.
While moving into your second property may be enticing, it simply may not be practical. You need to consider the number of repairs and the entire cost of ownership before deciding to move into the home. You also need to consider if the home is suitable for you and your needs. Investing the home will likely be a move than trying to move into the home.
Taking on a second property can be stressful, but turning your second property into a profitable investment is simple. Property management companies, such as Omni Property Management, can help you make the right decision that will give you the most benefits. For more information, please give us a call at (901) 372-5513 or visit our website at www.omnirealty.net.