Buying your first home is an important milestone - but what about buying your second property? Because life is slightly unfair, it is actually a lot easier to climb the property ladder and get ahold of your second home, holiday house or investment property once you’ve secured that first one.
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To many, this is something that really boosts their economy as it can provide a passive income - to others, it seems like an almost unachievable dream.
Here is a handful of great tips on how, when, and why you should buy that second property and finally join the club of passive incomes, fancy holiday homes or simply a sanctuary in another city that you can retreat to.
Before you do anything: know your finances
First things first; buying another property is something you should do when you’re in a stable financial situation. You probably know this very well but it’s worth mentioning in any way since so many people are unable to make the payments on that mortgage and end up with a tense relationship with the bank.
That doesn’t mean that you shouldn’t purchase another property just because you have a poor credit from the past, though, as you’ll be able to find a lot of poor credit homeowner loans out there. The point is that you need to know that you’ll be able to make the payments in the future, so have a long talk with your financial advisor or sit down and work it out yourself.
Why buy? Use it as a three-in-one
Now that you know what you can afford, it’s time to figure out how a second property can benefit you in the future. The best thing to do is to find a place that you can use as a holiday home, an investment property, and a retirement home when you need it; try to keep this in mind when you’re property shopping.
Coastal properties are, of course, in high demand and you’ll have to pay up to secure yourself one of these. Yet, finding a place in a good location is key to making as much as possible from it as you can rent it out on Airbnb when it’s not in use, save yourself the money of renting accommodation when you need a holiday - and, when you’re a bit older, you can simply retreat to your cosy seaside resort.
Luckily, nature is everywhere and you won’t have to settle for a coastal property if it’s out of your reach or simply not your cuppa tea. Think about other scenic places where anyone would love to spend the holidays, such as the countryside or next to an idyllic lake.
Make money as a property developer
Another alternative is to buy a fix-me-upper and sell it once you’ve improved its condition. There is quite a lot of money that can be made of this if you put your mind to it, but remember that this is no easy part-time job and you need to be prepared for some rather high costs if the place is in a particularly poor condition.
Keep an eye on the property market and try to figure out if it’s about to rise or fall. Buying an apartment when the prices are lower, fixing it up to a decent condition, and selling it when the market is booming is, of course, what every property developer hopes for and you might be able to make it.