5 Important Questions You Need to Ask When Buying a 2nd Home

Posted by Team Donovan on Wednesday, February 24th, 2016 at 9:26am.

Buying a second home in Orlando for retirement or as a family vacation home requires serious thought. Choosing where to buy in Central Florida depends largely on what you can afford and whether or not you plan to rent out the property when you’re not using it. Here are a few core questions you need to ask before purchasing a home: 

How much will it cost?

When you buy a vacation home, there are additional costs to consider besides the sales price. You will have to factor the same costs you have with your primary residence such as taxes, insurance, utilities and maintenance fees. Plus, when you’re not living in a home on a daily basis, you may not have the ability to tackle small problems before they become big ones. That can translate into higher maintenance costs in the long run. And since you’re not on site, you’ll have to hire someone to keep an eye on the place. 

Can you really afford a second home?

With all of these costs in mind, it’s important to consider whether or not you truly have the funds available to buy a second home. You’ll have a better chance of managing the purchase if you have little debt and plenty of savings. In general, expects say you should be able to accommodate all of your mortgage payments (including the second home) and the rest of your debt using no more than 36 percent of your monthly gross income.

Will you need rental income?

The National Association of Realtors has found that most vacation home owners don’t rent out their properties. But if you can’t make the mortgage payments without some rental income, it’s best to choose a popular destination where demand for short-term lodging is high, such as the Orlando area. As the theme park capital of the world, visitors come from around the globe to visit Disney World, Universal Studios and take in the beautiful Florida sunshine. Not all areas of Orlando allow short-term rentals however, so do check with a real estate expert like the agents at Team Donovan, who can point you to the appropriate communities.

Will the location suit your future lifestyle?

Short-term speculation on residential real estate is risky business. Since vacation homes can appreciate over time, it’s best to settle on a property that you’ll enjoy for years to come. When choosing a location, consider buying a place that’s big enough for a growing family, or choosing a community with enough recreational opportunities to accommodate changing interests. Many Orlando vacation homes are located in communities that offer resort-style amenities, or are attached to a golf course, which makes them quite appealing to families as well as retirees.

Will you need to hire a property manager?

If you buy a second home with the intention of renting it out, you will have to decide whether or not to hire a property manager. That person will be able to handle advertising, finding and screening tenants, cleaning, handling contracts and deposits, as well as regular maintenance and repairs. If you don’t have time to do those duties yourself, it will be worth paying 20 to 30 percent of your rental income for property management services.

Depending on where you decide to buy a second home, you may not have to hire a manager for your rental property. Some Orlando condo/hotels offer that service as part of your purchase price. In addition, these properties also provide 24/7 security so you and your tenants can feel safe during their stay.

Contact Team Donovan at 407-705-2616 today for more information about buying a second home in Orlando.