Buying a second home is enticing, especially in the summer when you dream about spending every free moment in that vacation abode. However, as with any big life decision, there are some things you should take into consideration before you purchase your second home.
Cost
First and foremost, you’ll need to determine the cost – not only the obvious costs like your mortgage, insurance and taxes, but also the costs you may not think of at first. There’s a lot that goes into home ownership as you may already know, and you’ll double that with a second home – double the housekeeping, lawn maintenance, heat and electricity, and everything else.
Financial Health
If the cost hasn’t scared you away, take a look at how a second home will impact your finances in general. Will the additional payments detract from other financial goals that you have, such as college or retirement? Have you taken a moment to model out the potential impact of that?
Use
While you may be dreaming of using that second home every moment that you’re free, will you really use it every time you can? Will you give up other potential vacations in order to go to your second home, or do you have a plan to rent it our instead?
Opportunity Cost
Usage leads right into this topic – opportunity cost. When you have a second home, you’ll feel obligated to use it, and it often replaces other types of vacations instead, so it’s something to keep in mind when making this decision.
Lifestyle
A second home isn’t just another cost and financial decision, it becomes a part of your identity and lifestyle. You’ll have your “home” life and your beach life or your mountain life. You’ll have a set of friends at each location. It’s a full commitment not only for you but for your family as well.
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