In this guide, you will find advice on these topics:
- How to Budget for a Second Home
- Advantages to Owning a Second Home
- How To Choose the Location of Your Second Home
- Why You Should Build Your Second Home
- How To Choose the Right Builder for Your Second Home
If you are considering a second home, we want you to be armed with all the knowledge you can get. This guide should help jumpstart your research.
Part I: How To Budget for a Second Home
Ensuring you can afford a second home is the most crucial step toward purchasing vacation property. If building a home is going to stress your financial situation, then it is important to practice patience. You know how challenging it is to own one home, so it is vital to figure out whether you can comfortably take on the added burdens of another. Here are a few questions to ask yourself and your family?
- Are you comfortably keeping up with your existing mortgage? Some may be envisioning purchasing a second home as a way to secure passive income. However, if you are struggling to pay off existing debts, attempting to purchase a rental investment will not help you get back on your feet. You should be paying off your existing mortgage comfortably before you begin the process of building or buying a second home.
- Can you afford a larger down payment than your first one? There are a number of different mortgage products you will be exploring for your second house. Most of them will likely require a more significant down payment than your existing mortgage.
- Are you in a position to pay cash for your second house? In many cases, it is ideal to be able to pay cash for a vacation property. If you are close, consider continuing to save until you reach that milestone.
- Are you saving for retirement? Your second home is not necessarily a good investment if your retirement savings are not in order. You may not be ready to explore a second home until you are putting aside at least 10 to 15% of your income toward retirement.
- Have you saved at least six to nine months of cash for an emergency fund? Your second house will not be liquid. In other words, in case of a substantial emergency, you may lose your second house before you can sell it. Make sure your emergency fund is established before you explore a second home.
- Are you saving for college or other milestones for children? Your second home is something your children and family will enjoy, but you want to make sure it should not come at the expense of college or starter funds. It is not a good idea to count on selling your home later to fund college and other expenses. Make sure you are preparing for your family’s future before building your vacation house.
- Will you reside in your second home for a considerable portion of the year? If you work remotely or have the flexibility to spend 40 to 50% of the year in your second home, you may have access to friendlier mortgage products. For families with the flexibility to travel frequently throughout the year, you will get the most out of your second home.
- Can you afford to maintain and repair two properties? Just like your own house, you must be able to afford to set aside some cash for repairs and maintenance for your second property.
If building your second house is going to be a financial burden, you are not ready. However, if you are comfortably paying your existing mortgage or have already concluded all of your debts, you may be in to make an investment. If you are, there are many advantages to owning a second home.
2) Advantages to Owning a Second Home
There are many advantages to owning your own vacation house. Here are just a few reasons to build a second house:
Vacation: You will never have to wonder where to go on vacation. You will be able to enjoy and get to know a second community with which you can become comfortable. Your family will be able to furnish the house in a manner in which you are comfortable. The kitchen, laundry, bedrooms, and bathrooms can all be decorated the way you want them to be. You can stock the home leave pots, pans, utensils, toothbrushes, hygiene products, and potentially even snacks so that all you have to worry about is enjoying some time away.
Investment: As important as it is to make sure you are financially ready for the purpose of a second home if you can afford it, real estate is typically an excellent long-term investment.
Passive Income: There are a number of factors to consider before this is an option; however, you may be able to build a second house to generate passive income. If your municipality, HOA, and mortgage allow it, you can consider using it as a vacation rental or securing a long-term tenant. You should not, however, be in a situation where you are counting on that income to pay the mortgage.
Retirement: When you are ready to retire, your second home can be the perfect place to spend your golden years. If your retirement account is in good shape, building a second house can alleviate some of the stress you might have about the next steps once you retire.
3) How To Choose the Location of Your Second
In real estate, location is everything. Choosing the location for building your second house is no exception. Here’s how to determine where to build your vacation property:
- Choose a location your family will enjoy. The beach and the mountains are typical vacation destinations for families in our area. One advantage of the coast is that the weather is more cooperative most of the year.
- Choose a location close to conveniences. One temptation with a second house is to build it somewhere isolated. You may think you want to be deep in the woods away from civilization; however, there are several reasons this might be a mistake:
- Isolation sounds great until you want to go out to eat.
- Isolation sounds great until you have to remember to pack everything you need for survival every time you go on vacation.
- Isolation sounds great until you forget one item at the grocery store.
- Isolation sounds great until your kids get bored.
- Isolation sounds great until you want to sell your home.
- Choose a location other people enjoy. With your second house, you do not want to try to buy or build in the cheapest location. Ideally, you want to get in somewhere that is growing and property values are on the rise. You may not intend to sell; however, it is helpful to have confidence about your second home increasing in equity.
The Myrtle Beach area checks a lot of boxes for great locations to build a house:
- Myrtle Beach has been growing steadily for several decades. However, its growth is not necessarily outpacing the housing being built, so the market for housing is not inflated by lack of supply.
- Myrtle Beach’s economy is certainly tied to tourism, but it is not wholly dependent on it. Many families are moving to the area for excellent careers, great schools, and other benefits. These factors help increase the equity of your second house.
- Myrtle Beach has all of the modern conveniences you would expect in a much larger city. At the same time, you can find small towns throughout the region that are still convenient to the Grand Strand and quality shopping. As home builders in northeastern South Carolina, we cannot recommend this area enough.
4) Why You Should Build Your Second Home
Should you buy an existing house or build your own? We think building makes a lot of sense for your second house for several reasons, including:
- If your second house is going to be hours from where you currently live, you will not have to try to perform your housing search from a distance.
- You can customize your home to include exactly what you need.
- You will not have to worry about managing an expensive renovation project from a distance.
- Many of the meetings you need to have with your builder can be handled remotely.
- As long as you find a reputable builder, you can be confident your second home will have a minimal amount of maintenance needs for years to come.
- You may choose to build a townhouse or garden home in which maintenance may be included in the HOA fees.
- You can choose the home you want in the location you want. You will not have to settle for a less desirable house in the neighborhood of your choosing, or vice versa.
The key to ensuring your second house is the one about which you have dreamed is choosing the right home builder. With a bit of research, you can find a home builder with an excellent reputation. For those searching for vacation property in the Myrtle Beach area, Realstar Homes is your solution. Each of our communities has many different floor plans with a host of customizable options. Before you settle on buying or building your second house, you need to reach out to our team. We will answer your questions and make sure you have the information you need to make an informed decision.
Contact Realstar Homes for more information about building a second home in the coastal Carolinas.
Looking for some inspiration? Check out our blog, Beautiful Home Design Trends You Will Love.