Your Second Home

By: Kevin Bilberry

If you've recently taken the plunge and purchased a second home, or are considering doing so, there are a lot of special considerations to think about. Owning two homes is roughly twice the responsibility, twice the expense, and presents unique problems. However, all of these are manageable, and that second home can be extremely rewarding if it is managed properly.

Many people buy a second home so they can feel a bit of ownership over their favorite vacation spot. Sometimes it's because their lifestyle demands they have a guaranteed comfortable and accommodating place to come to whenever they want (for example, no one can tell you no pets are allowed!). Some buy a second home out of necessity because of a job that requires travel, or a spouse who works in another city. Whatever your reasons for buying a second home are, one thing is certain: you can't be in two places at once. When there are two homes, one is likely to be the primary home and one will be empty much of the time. Many people find success in renting their second home out to vacationers during the times they won't be there. This helps to pay the mortgage and also helps your home not seem abandoned.

However, renting your second home means you've essentially got groups of strangers taking turns staying in your home. In between guests, it will need to be checked for damage and cleaned. Depending on where this home is and how much time you've got on your hands, these jobs may be better handled by a property manager than by you. Having a property manager you trust can take a lot of the stress out of managing your second home. If managed carefully, your second home should easily be able to pay for itself and its maintenance, especially if it is a nice home in a desirable area.

A second home is also an investment in your future. Just like your primary home, it will gradually gain equity over time. Your goal may be to eventually move into your second home, perhaps when you retire. Depending on your circumstances, having that second home offers you a lot of choice. You can rent out your primary home, and if you've managed to pay off both of your mortgages, that's a nice little income for you. Or, you can sell your primary home and use the income to either pay off your second home or to retire on if you've already paid off both homes. Or, you can sell both and buy something that better suits your needs at that time. No matter what you do, you'll have twice as many choices with a second home as you did owning one.

If you are wanting a second home for vacation purposes, but just can't afford to fully own another home, consider time-shares or fractional ownership options. Time-shares are often condos or apartments, but could be cabins as well. These are often owned by a resort company, and leased in a way that allows each leaser a set amount of time in the home at a set time of year. Similarly, fractional ownership is when you own a share of a home or condo. A contract is drafted outlining use and payment arrangements, and the share is deeded in your name. Just like in full second-home ownership, a property manager helps to take care of the details in a fractional ownership situation. In fact, a manager may be even more important in the case of fractional ownership, because a manager is a third party and not a co-owner, so no personal issues can enter into the situation, and no one can claim to be doing an unfair percentage of the work of managing the home.

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