Most people dream of owning a second home they can escape to each weekend, which will allow them to spend quality time with their loved ones. However, if you have the money available to purchase a second property, you might be eager to find a stunning house or flat in a picturesque destination.
However, various factors can determine your happiness and financial security. Read the following five considerations to make when buying a weekend home.
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The Price of the Property
While you will likely buy a property based on its square footage, aesthetics, and proximity to stunning scenery and entertainment venues, you must factor its price into your decision.
For example, if you want to buy a holiday home in Ireland, calculate the costs for a 10-, 20- or 30-year mortgage, and weigh up the price against how often you will use the property. Next, review the average rental prices in the country, and calculate the costs for renting a property occasionally over the same period. It might be cheaper to rent holiday homes in Ireland over buying one outright, and you’ll have more flexibility when choosing where to stay each time you visit.
Consider the Travel Time & Accessibility
Next, you’ll need to consider the travel time, distance, and accessibility from your current home to your weekend property. If you don’t want to spend much of your time driving or flying to a destination, pick a weekend home that’s no more than two or three hours away. Don’t forget to factor in ferry terminals and border crossings into your decision.
To Rent or Leave Vacant
If you only plan to use your second home during weekends, you can decide to either rent it out to generate revenue from the property or leave it vacant throughout the week. Renting a holiday home could help you pay off a mortgage at a faster rate, but you may need to perform maintenance tasks and renovations more often. The choice is yours.
Learn About Stamp Duty
In addition to placing a deposit on a property and committing to a monthly mortgage, you must factor the cost of stamp duty into your decision. Therefore, your first home will become your primary residence, and your second home will be known as your secondary residence.
You’ll need to pay stamp duty on a secondary residence that is worth more than $40,000. While the stamp duty rate is subject to change, you will pay a 5% rate for properties between £125,001 and £250,000 or 8% for secondary homes between £250,001 to £925,000.
Pick the Perfect Insurance Policy
Once you have set your heart on a property and your offer is accepted, you’ll need to find the perfect insurance policy for your second home. An experienced underwriting team can sit down to discuss your property requirements, such as if your property will be left vacant throughout the week or if you’ll rent it out to third parties. Once they understand your circumstances, they can devise a policy and price that matches your specific needs.