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[pic] 8 Tips For Buying A Second Home In Florida

Thinking about buying a second home? Does the lure of owning a Florida or mountain getaway have you planning your vacation around looking at beachfront bungalows, log cabins or potential rental properties? Here are some tips on how to approach the process and make the decisions with which you’ll be faced.

1. Why buy a second home? If you’re thinking of buying a rental property, your motivation is income and appreciation. If you’re thinking of buying a vacation property, your motivation will revolve around the fun you and your family can have now and in the future. Or, you can combine your motivations, and purchase a rental property that will eventually become your family’s vacation hideaway. But be sure to evaluate how much time you’ll spend in your new home away from home, and whether you’ll want to keep returning time after time.

2. Go in with your eyes open. A second home comes with additional, initial expenses as well as ongoing expenses. Be sure you know what all your acquisition costs will be, and get a good feel for what it will cost on a monthly basis before pulling the trigger. Don’t make the mistake of underestimating what the real cost of owning and maintaining a second home will be. Florida’s Homestead Exemption reduces property taxes on primary residences, but not second homes. Know what your taxes will be. And be sure to consult with an accountant to determine how owning a second home will affect your income taxes.

3. Location, location, location. You’ve heard it before, but when it comes to buying a second home, whether it’s for income or fun, location really is the key. You already own your first home, so when you’re looking for your second you can take your time, relax and wait until the right location comes along. Don’t be in a hurry; the pressure is off. You still want your new home to appreciate, so consider buying in popular areas, perhaps near the beach, a lake or a waterway.

4. Choose a professional Realtor®. We can’t stress this strongly enough. You need a Realtor® who will listen and understand what your priorities are, the budget within which you need to work and someone who has established professional relationships with the people you’ll be working with. (i.e. appraisers, lenders, insurance brokers, etc.) You also want a Realtor® who knows the area, its neighborhoods, their weak and strong points, and where the market is moving. Chris Hounchell & Associates and Keller Williams Realty, Inc. can help you with all your real estate needs.

5. Insurance. Before you buy, make sure you’re able to purchase the insurance you need, especially if you’re thinking of a home near the water. If you take out a mortgage, title insurance will likely be required. You may also want to consider liability insurance if you will be renting your second home.

6. Find a lender. Keep in mind that not all lenders are alike, and some have different rules when it comes to mortgaging second homes. Rates are very attractive right now, and the rate you end up paying for a mortgage on your second home should be about the same as what you pay for your primary residence. However, some lenders may charge an additional one-half to full-point fee for loans on investment properties. As to your down payment, consider using the equity in your first home through a refinance or a home equity line of credit.

7. Revisit why you’re buying that second property. If it’s for income, your path is clear. You’ll become a landlord, which comes with all its rights and responsibilities. Is that something you really want to be? If it’s a vacation home, how much time do you really think you’ll spend there? Be honest with yourself when asking these important questions, or they’ll come back to haunt you later.

8. Make an offer. But not any offer. Today’s market is tipped toward the buyer, and there are fantastic deals to be had. When you’ve found the property that really meets your needs, submit an offer and see where it takes you. You’ll quickly find out how motivated the seller is. Make sure your offer is reasonable, and keep to your budget. If you can’t get the home at the price you’re willing to pay, walk away. Another opportunity will present itself very shortly.

Chris Hounchell & Associates, Keller Williams Realty, is the leader in general real estate, pre-foreclosure, short sale and foreclosure markets in the Pinellas County area. Contact Chris Hounchell today at 727-642-9107.

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