Benefits of Owning a Second Home
Whether it's a vacation home or a rental property, a second home can give you many of the same personal and financial benefits as your first home. Make sure you understand the tax implications before you buy, however, so you can make the most of your home investment.
If your second home will serve as a personal getaway, you're probably looking forward to having a place to relax with family and friends. Whether it's a lake-side cottage or a condo by the beach, knowing that you can retreat from the hustle of daily life to your own private vacation spot has an obvious appeal.
Investing in a second home has the potential to pay off in a number of ways. First, there are the same financial rewards that come with homeownership in general: tax-deductible interest* and possible price appreciation. In addition, you may be able to use the home as a source of rental income. If it's a vacation home, renting it out for part of the year can help offset the costs of ownership. If it's strictly a rental property, you can use it as a significant source of income, although the tax implications may be somewhat different.
Can you shop for, look at, and ultimately make an offer on a home without real estate experts? Technically yes, but why would you when it costs you nothing for agents like us to take much of the stress off your shoulders? Not only will we help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but we also have knowledge of the market that you don’t possess. Finding the perfect home can be a daunting task, this is where our expertise and wealth of knowledge come into play. Let us show you around some homes that meet your dream home criteria so you can find the one that's right for you.
Although you can't deduct mortgage interest for an investment property, you can deduct operating expenses (such as maintenance and advertising costs) that exceed the rent you collect, as well as losses on the sale of the home. Neither is deductible for a second home.
*Consult your tax advisor
Buying a second home is more complicated that buying a primary residence. There are different underwriting & down-payment requirements. Many lenders will have different programs and rates will vary depending on whether or not you will rent the property. Working with a financing professional is key to starting this process.
Not only do you need to buy the home, but you often need to completely furnish it and purchase duplicates of many items that you have in your primary home. You need to build these costs into your overall budget, including repairs, maintenance, utilities, and other costs like property management if needed.
Consider how often you want to visit, how far are you willing to travel, how much are you willing to spend for transportation and how all of the factors impact you and your family. If you are planning to rent, consider how much you plan to use the house and when, you may find that you want to use it during the same dates that people may want to rent it. Is personal enjoyment more important that rental revenue?
Since you will need many of the items you have at have at your primary residence, the best approach is to standardize on the same brands, models and supplies that you already use. For example, having the same coffee maker s, TVs, DVD players at both homes makes day to day living less complex. It's also best to setup your main rooms with similar supplies and locate them in similar areas so both homes feel very similar for basic living needs.
OK, now your thinking we have lost our minds after we just told you to standardize your homes. You only want the products and appliances to be standardized. Make the second home different from your primary home in decor, colors, furniture style and overall look. This will make you feel like you are on vacation even if you frequently use the home. A different feel (with standardized basics) makes your second home easy to live in and manage, but gives you a great sense of change ... more of a get-a-way!
Get ready, get set, GO – begin your home search!
Wait - Stop! Are you sure you know where to begin, or what type of home you need, or where you want to live? Before rushing in and buying the first home you see, you need to do some homework. We can help.
Thoughtful preparation in the beginning of your home search will help you find the home of your dreams that also fits your unique needs. The key is to stay organized and focused on the ultimate goal of finding your ideal home.
We help our busy clients structure their property search so they achieve their goals & timeframes in the most efficient manner possible.
• Maximize your effort spent by asking us to set up a customized MLS search. Use our expert web-based tools to search for properties and keep you up to date on the market.
• Use our online resources to learn about communities & schools or just ask s for a customized resource directory.
• Schedule "field trips" to see if a town or community or neighborhood is right for you. We’ll show you how and give you great tips on getting to know the neighborhood.
• Combine Open House tours and agent showings to narrow your choices.
• Consistently communicate with your real estate consultant as your needs and preferences change.
• Rely on experts to provide data and experience that will strengthen your negotiations and manage your purchase process when you find the right home.
• Close on time and enjoy a hassle free transaction by working with our team as your trusted advisors.
Before you start your search you need to know what you can afford. Searching for homes far below or above your price range is frustrating and a waste of time. Speak with one of our recommended home finance advisors to find out how much home you can afford.
We are real estate consultants. Our job is to help you manage the process and provide outstanding resources making your new home purchase a complete success. We work exclusively for you as the buyer and we are compensated for our efforts thru the seller's broker. And no matter where you are moving we have a network of agents in the Chicagoland area and worldwide that get results for our clients. We handle the details to make the search and sale smooth and efficient.
Ask us to set up a customized MLS search that can update you daily, weekly or monthly on what’s new on the market and when prices change. Your custom MLS search can be much more specific helping you find the perfect new home. Whether you demand a fireplace, heated garage, super laundry or accommodations for your furry friends a Shoreline Smart Search is the most efficient tool you can use. There is no sense in searching website after website seeing the same property listings only to find the one you like is already sold. Contact us to get started!
We manage our loyal clients transactions to make sure their timelines and goals are met. Our client’s transactions close on-time. We average a 99.7% on-time closing service level.
Home rehabbers who are considering a move in the not-too-distant future should focus mostly on exterior upgrades. That's the message from REALTORS® who participated in Remodeling magazine's 26th annual "Cost vs. Value Report," done in cooperation with REALTOR® Magazine.
REALTORS® in 65 markets were given construction specs and costs on 29 upscale and mid-range projects and asked to estimate the percentage return at resale.
Of projects that saw national cost recovery rates of more than 80 percent in 2014, only one — a minor kitchen remodel, with 83 percent of cost recovered — was a strictly interior job. The others were an upscale siding replacement using fiber cement materials (88.1 percent), a wood deck addition (85.4 percent), mid-range vinyl siding replacement (83.2 percent), and upscale vinyl and mid-range wood window replacements (81 percent and 81.2 percent, respectively).
On most projects, the value of remodeling trended down in 2014 compared with 2013. No project exceeded an 88 percent return. The likely culprits for the year-to-year drop: rising remodeling costs and slowing home appreciation brought on by the lackluster housing market in many areas.
The story was somewhat different in the Pacific region, however, where REALTORS® estimated cost recovery of more than 100 percent for six projects: a wood deck addition, a minor kitchen remodel, fiber-cement siding replacement, wood window replacement, and an upscale wood and vinyl window replacement.
Nationally, projects at the bottom of the cost-recovery ladder included home office remodels (57 percent), installing a back-up power generator (58 percent), and adding a mid-range sun room (59.1 percent).
Do the needed research to figure out if the work or project that you are considering will payoff when you sell your home. Our clients always check with us when considering a model or home improvement project to make sure they will get the most return at resale (even if they don't intend to sell soon).
Know what you can spend and plan for the cost to go over by 10-20%. Consider speaking with a financing person if you will need additional funds.
Outline the project and your expectations so you can makes sure the results will match your vision. This is key when getting bids ion the work so you know you are comparing apples to apples.
Get 3 bids on the work to be done so you have a good idea of the cost and can choose the vendor who may not be the lowest cost, but who will get the job done right and on time.
Before you sign anything make sure the vendor you are planning to use has good references by calling them. Also, make sure you get copies of insurance and bonding if that is needed.
Before you start any work make sure you know if the work will need permits. A good vendor will help you with this or handle it for you.
Select a Geographic Area
A buyer needs to select a geographic area that is suitable for their individual lifestyle. Today, lifestyles are the key determinant to making an informed home buying decision.
You should determine what is a reasonable commute to work and what the means of transportation will be…via interstate or mass transit. Schools will be of great interest if you have a family.
If seeking a pre-retirement or retirement home, you should determine the proximity of family, friends, and existing home.
A determination should be made as to where consumer goods and medical services are made available.
Affordability is a key factor in any home buying decision. Knowing if this is a move-up in home value, or a lateral or downward move, will move the decision making process right along.
Once these lifestyle issues can be resolved, the search can be narrowed to several qualifying locations.
Once location has been selected you can now focus on new home sites and move to thenext step-research the builders. A reputable homebuilder will belong to a local homebuilders association. Also, it is advisable to check with the local building inspector for an opinion on quality.
Choosing a builder is just as important as choosing the style of the home. The builder not only has the responsibility for the largest investment a buyer may ever make, but his or her skill and preferences can have a direct impact on future comfort and happiness.
Not all new home communities are the same. Each one carries the distinctive mark of the builder, whether that happens to be innovative floor plans, distinctive craftsmanship, bold architectural statements, or just great value. Each builder also has a different personal style and way of communicating with his or her clients.
The buyer should consider references of past clients. Drive through one of the builder's previous subdivisions on a Saturday morning and try to get a random sample of opinions. Ask questions like: are you happy with your home? People are usually willing to share their joy or their sorrow.
Now that the right location and the right builder have been selected, it is appropriate to go to contract. Most builders require anywhere from 10% to 25% down in order to start a home. If the home is up and standing, the builder may accept 10%. If a custom home were to be created specifically for the purchaser, the builder may expect a 25% deposit at contract.
Selections increase in proportion to the price tag of the home. Correspondingly, the time it takes to build the home increases with the size and the number of custom features selected.
Realistically, a home delivery date range, if started from scratch with an improved road to the home site, can take anywhere from 120 days to 18 months. Remember, the builder is anxious to keep the home delivery schedule on time. The builder does not get paid until closing.
Before the closing, a home inspection tour will be conducted. During the tour the builder will point out all of the features and provide warranty information on each. Learning about maintenance and upkeep responsibilities is very important. Most new homes come with a one-year warranty on workmanship and materials. However, such warranties do not cover problems that develop because of failure to perform required maintenance. Many builders provide a booklet explaining common upkeep responsibilities and how to perform them.
Manufacturers provide warranties that are covered by the manufacturer, not the builder. The builder is responsible for any building code violations that occurred. However, in the unlikely event that there has been a violation (because builder research was conducted), the responsibility becomes the builder's.
During the inspection, the purchaser should look for scratches in the counter tops and flooring. Walls should not have gouges and the moldings and trim should be square. The buyer should take pictures before the title is taken, particularly if a problem is discovered. The builder will prefer, under all circumstances, to conduct any and all repairs prior to the buyer moving in because it is easier for them to work on repairs in an empty house.
There are over 30,000 parts in a new home. Therefore, the propensity to find a small imperfection is great. However, many builders conduct their own thorough inspection before the buyer sees it. Most builders employ a cleaning service to make sure the home is clean prior to the closing.
One year later, it's not uncommon to find settlement cracks in the drywall or nail pops. These are easily remedied and are the responsibility of the builder. A call to the builder is recommended prior to the termination of the one-year warranty.
This is the marketing center for the builder or developer and is used to provide sales assistance to prospective buyers.They often have brochures, floorplans, models, finish samples and other media to provide a good overview of the how the finished homes or units will look.
It is very important to either arrange to go to a sales center with your Realtor or contact your agent BEFORE you go to a sales center to make sure your agent can advise you through the process.
This is the list of items that the builder or developer need to complete either prior to closing or with in an agreed time period after closing. Examples may be cracks, paint, caulking, missing items, etc.
Common Construction Terms: Here's a sample of some of the terms the home buyer needs to know.
One of a string of small poles used to support the handrail of a stairway.
Molding used at the junction of the baseboard and the floor.
Framing lumber nailed at an angle to provide rigidity.
A frame, as of a window or door.
A decorative molding at the top of the exterior walls under the eaves.
The overhang of a roof that extends beyond the walls of the house.
Sheet metal or other impervious material used in roof and wall construction to protect a building from seepage of water.
Horizontal boards laid on edge resting on the beams or walls that provide the main support for the floor. The subflooring is nailed directly to the joists.
A horizontal exterior molding resting directly beneath the cornice.
The strip of molding placed above a door or window frame.
The decorative facing placed above a fireplace.
Thin vertical strips inside the window sash that divide the window glass into panes.
A coat of cement mortar on the face of rough masonry. Typically used on the exterior of foundation walls to cover up concrete block.
A plan of a construction site showing the position and dimensions of the building to be erected and the dimensions and contours of the lot.
The under-surface of a cornice or overhang.
1 N Whittaker Street Suite A New Buffalo MI 49117
1 N Whittaker Street Suite A New Buffalo MI 49117