Buying a Second Home: Income, Getaway or Retirement [NOOK Book]

Overview

Second-home hunting has never been easier with everything you need to find and buy the right place at the best price!


You don't have to be rich to buy a second home -- but you do need to be smart. Buying a Second Home delivers the goods, showing you how to make the purchase of your second home a success!


...

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Buying a Second Home: Income, Getaway or Retirement

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Overview

Second-home hunting has never been easier with everything you need to find and buy the right place at the best price!


You don't have to be rich to buy a second home -- but you do need to be smart. Buying a Second Home delivers the goods, showing you how to make the purchase of your second home a success!


You'll learn how to identify an affordable price range, choose a great location, get low-cost financing, minimize taxes and more. Explore topics you won't find in other home-buying books, including:

  • innovative financing strategies

  • how to rent your property profitably

  • how to assess the investment potential of a fixer-upper

  • choosing the right mortgage for you

  • profiting from a second-home sale

  • buying a home in foreclosure


The CD-ROM includes handy checklists and custom worksheets that help you make sense of the entire process, from buying to ownership.


The new 2nd edition includes updated market and mortgage information, including the latest criteria you'll need to meet in order to get a loan and how to assess the potential of a recently foreclosed home. Get the step-by-step information you need to be smart about your investment with Buying a Second Home.

The CD-ROM that accompanies the printed version of this book includes forms or other tools; in this eBook, you'll find all those documents in the appendix or at the back of the book.

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Editorial Reviews

Los Angeles Times
Shows how to purchase the property that's right for you, whether you're an investor, vacationer or future retiree.
California Bookwatch
It can be easily done through use of Buying a Second Home, which identifies strategies from identifying locations and obtaining low-cost financing to taking advantage of taxes.
EscapeHomes.com
A must-read for anyone dreaming of owning second home.
— David Hehman
LendingTree
This book is a helpful tool for those looking to understand the process of purchasing a second home. It's a must read for anyone looking to buy for investment, vacation or future retirement.
— Lori Collins
Prudential NJ Properties
Anyone contemplating buying a second, or even third, home owes it to himself or herself to read and benefit from this comprehensive book.
— Christopher A. Brown
Reference & Research Book News
Guides readers through the process of buying a second home, sharing a wealth of practical, money-saving tips along the way.
San Francisco Chronicle
If you have ever thought about buying a second home -- whether as an investment, a vacation retreat or for eventual retirement -- this book is a must.
— Bill Burnett
2ndhome Journal
Offers practical and comprehensible information that will help you think through the process of becoming a successful second home owner.
— Francis Carlet
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Product Details

  • ISBN-13: 9781413314373
  • Publisher: NOLO
  • Publication date: 1/29/2009
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 2
  • Pages: 390
  • Sales rank: 846,039
  • File size: 12 MB
  • Note: This product may take a few minutes to download.

Meet the Author

Craig Venezia is a nationally recognized authority on private mortgages. He has appeared on CNN/Money's "Open House" and been quoted by major media including the New York Times, Los Angeles Times, Chicago Tribune and National Public Radio. Formerly, Mr. Venezia served as an executive at Wells Fargo Bank and was affiliated with E*TRADE Financial. He has also worked as a senior executive specializing in private mortgages at a financial services company. He resides in Massachusetts with his wife and three children.
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Read an Excerpt

Introduction

One out of every three homes in the United States today was bought as a second home. We're in the midst of a second-home ownership boom, fueled by such factors as the shrinking American family, older and wealthier households, and new technologies for working from home.

And now you're thinking about taking the plunge. Maybe you're looking for an alternative to other investments and will rent or resell the house. Or maybe a cabin by your favorite lake or ski area is calling to you. And if you're thinking ahead toward retirement, you may want to find a manageable, well-located home now.

Whether you plan to buy a second home for investment, vacation, or future retirement, this book is for you. It covers everything you need to know, from how to locate a house that meet your needs, to ways to stay within your budget, to a crash course in being a landlord. We cover topics you may be curious about but won't find in other home-buying books, such as how to buy jointly with friends, how to arrange loans from family members, and how to choose the best place to retire. And we help you understand some complex legal and financial matters, to make sure your home is a good investment no matter your reason for buying it.
What's Your Main Reason for Buying a Second Home?

Before you so much as open the real estate section of your newspaper, decide what you really want out of your second home. And, of course, discuss your goals with anyone who'll be buying, or moving, along with you.

Most people looking for a second home are doing so for either:

* investment, or to earn money from rental income or home-value appreciation
* vacation, or tofind a destination to escape the daily grind, or
* future retirement, or to establish a place to enjoy the post-workforce years.

Choosing and staying focused on your main goal will help you make later decisions, for example regarding the type of home you choose, where it will be located, and whether or not you will rent it out.

You may already know which goal is uppermost in your mind. But take a moment to review the characteristics of each type of second-home buyer, below. This is your chance to feel certain about your choice and learn what's unique about your home-buying needs.
Curious About Your Fellow Second-Home Buyers?

The following fun facts were revealed in a 2006 survey by the National Association of Realtors®:

* The typical vacation-home owner is 59 years old and earns $120,600 per year.
* 18% of vacation-home owners plan to retire there eventually.
* The typical investment-home owner is 55 years old, and earns $98,600 per year.
* Most second-home owners are married couples -- 83% of vacation-home owners, and 75% of investment-home owners.
* Minorities are playing an increasing role in the second-home market, accounting for 11% of vacation-home purchases and 17% of investment-home purchases between the years 2003 and 2005.
* Buyers must be enjoying the second-home experience -- 21% of vacation-home owners go on to buy one or more additional vacation homes, and 34% of investment-home owners go on to buy additional investment properties.

Buying a Second Home for Investment

If you see a home with deeded beach rights and the first thought that pops into your head is, "Wow! imagine how much I could sell that for after a few years and a paint job," then you're probably motivated by investment goals.

Investors heed one thing above all others -- getting a healthy return on their second home, be it through rental income or, more likely, appreciation. Everything else takes a back seat. Investors view buying a second home as simply an alternative to putting money into stocks, bonds, or other investment vehicles, and their decisions about purchasing a second home are methodical and financially based. Instead of scouting for a home in their favorite vacation destination, investors might buy one in a town where they'd never go, but which has had a track record of steady appreciation in home values.
Are You a Tortoise or a Hare Investor?

In the childhood story, "The Tortoise and the Hare," slow and steady always wins out over fast and furious. In real estate investing, both approaches can win -- but you'll probably want to stick to one or the other, depending on your level of patience and willingness to take risks.

* A tortoise will purchase a second home with the idea of holding onto it over a long period of time: ten, 20, even 30 years. Tortoises aren't looking to make a quick buck. Their strategy is to weather the ups and downs of the real estate market and profit through long-term rises in home values. Tortoises often also rent out their property, ideally to achieve monthly profits, but at a minimum to offset expenses.
* A hare will purchase a second home with the idea of reselling it as soon as a reasonable profit can be gained. This is commonly referred to as "flipping" a property. Hare investors often try to add value to the property by fixing it up, preferably with low-cost cosmetic changes. Hares want to see house values increase sharply over a short period of time. While some hares may rent out their properties, most don't, because that would get in the way of a quick sale.

It doesn't matter whether you're a tortoise or a hare, so long as you recognize your tendencies and make well-researched decisions around them. You can also change in midrace. For example, during the housing boom that started in the mid- to late 1990s, many tortoises sold their properties after holding onto them for only a few years, because house values had increased so fast and furiously. Conversely, when house values flattened, and even dipped, in the mid 2000s, many hares decided to hold onto their properties longer than anticipated, because they weren't achieving the desired profits.

Buying a Second Home for Vacation

If you see a home with deeded beach rights and the first thought that pops into your head is, "Wow, a private beach where I could relax and leave the craziness of life behind," then you're thinking like a vacationer. You're probably already fantasizing about using your second home during your free time, holidays, or peak sport seasons. While almost every vacationer wants a second home to be a good financial investment, turning a profit is not the main motivation.

Don't confuse a vacationer with an investor who buys a vacation home. A true vacationer buys a second home for personal enjoyment above all else. If the property is rented out, it's usually only as a means to offset expenses. When an investor buys a vacation home, the purpose is to profit from rental income, appreciation, or a combination of the two. In many cases, an investor won't even use the home personally.

For vacationers, decisions about purchasing a second home are driven by emotion more than by logic. For example, a vacationer who has always dreamed of owning a condo on Poipu Beach in Kauai isn't going to buy one on the other side of the island in Hanalei Bay just because it promises to appreciate at a faster rate or would command a higher rental price. That's not to say a vacationer doesn't ever rent out a second home to offset expenses, or even look for the home to appreciate in value. Rental or other profits are not, however, the driving factor behind a vacationer's buying decisions.
Buying a Second Home as a Future Retiree

If you see a home with deeded beach rights and instantly think, "What a great place to live after I've stopped working," you're thinking like a future retiree. It doesn't matter whether your retirement date is just around the corner or decades away.

With people living longer (current life expectancies are around 75 years for men and 80 years for women), retirement has the potential to be the start of life, not the end. Buying a second home now for future retirement could give you a jump start on the good life.

Like vacationers, future retirees often rent out their second homes to offset expenses, and even look for the home to appreciate in value. However, rental or other profits are not the driving factor behind future retirees' buying decisions. Rather, their goal is to have a second home they can ultimately call "home."
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Table of Contents

1. The Seven Rules of Buying a Second Home
2. What a Second Home Really Costs
3. Crunching the Numbers: How Much Second Home Can You Afford?
4. Narrowing Your Search: What and Where to Buy
5. Picking the Right House
6. How Experts Can Save You Time and Money
7. Fixer-Uppers: Finding the Gems and Avoiding the Junk
8. Buying Straight from the Seller: FSBOs
9. Raising the Cash You'll Need Up Front
10. How Family and Friends Can Help (and Why They'll Even Want To)
11. Finding Your Way Through the Mortgage Maze
12. You Don't Have to Go It Alone: Buying With Others
13. Being a Landlord: What You Need to Know
14. Tax-Saving Strategies
Appendix A—How to Use the CD-ROM
Appendix B—Forms and Checklists

Forms from the CD-Rom, are available under the Appendix B of the EBOOK.
Forms for Calculating Costs and Affordability
Hud-1 Settlement Statement
Affordable Monthly Expenditures Worksheet
Estimated Maximum Loan Amount Worksheet
Maximum Purchase Price Worksheet
Forms for Evaluating Individual Houses
Initial Walk-Through Checklist
Rental Property Annual Pretax Cash Flow Worksheet
Return on Investment (ROI) Worksheet
Forms for Interviewing Professionals
Real Estate Agent Interview Questionnaire
Mortgage Broker Interview Questionnaire
Attorney Interview Questionnaire
Home Inspector Interview Questionnaire
Forms for Evaluating Fixer-Uppers
Fixer-Upper State-of-Mind Quiz
Fixer-Upper Walk-Through Checklist
Fixer-Upper Cost-Tracking Form
Forms to Facilitate Down Payment and Other Informal Loans
Annual Nonessential Expenditures Adjustment Worksheet
Borrowing Against Home Equity: Comparison Worksheet
Promissory Note
Form for Choosing Management Company
Property Management Company Interview Questionnaire

INDEX

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  • Posted March 13, 2012

    Huge waste of time and money

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