Featured News

Here's why buying a second home first might make sense

Rather than go ahead and try to buy a home to actually live in, an increasing number of people are instead opting to purchase a vacation home first of all.

CNN.com reported that many first-time buyers are priced out of the market in their current area, especially in cities such as San Francisco and New York. Hence, they’re opting to buy a more affordable vacation property in other, cheaper areas.

“I’m seeing this more and more,” Svetlin Krastev, an investment advisor with Black Sea Gold Advisors in Kingston, N.Y., told CNN.com. “People want to have exposure to real estate, but it would take all of their assets to get a residence in the city.”

CNN gave the example of Bart Higgins, who lives in a rented four-bedroom converted warehouse in Brooklyn with his wife and twin five-year-olds, and pays $5,300 per month in recent. The home would cost between $2 million and $3 million to buy, CNN said, so rather than do that the couple decided to buy a lakeside vacation home on 33 acres of land in Kingston, N.Y. for $300,000.

“We bought our first home as a second home as a way to relieve the pressure and buy us some time,” Higgins told CNN. He said he uses Airbnb to offer short-term rentals of the property to help supplement expenses when his family isn’t staying there.

While buying a second home first might make sense for some, financial planners told CNN that in some cases it could prevent or delay people from being able to buy a main residence.

“Having a loan commitment on a second home will make it that much more difficult to buy what will be used as a first home,” said JP Geisbauer, a certified financial planner at Centerpoint Financial Management.

But other experts disagree, saying that for many people it does make sense to buy a cheaper second home first and finish paying it off. A smaller mortgage on a vacation home can be more manageable than a larger loan in the city. In addition, vacation home buyers can usually rent out their properties when not staying there in order to help pay off the mortgage.

Mike Wheatley

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at mike@realtybiznews.com.

Recent Posts

Crafting Powerful Real Estate Landing Page for Sales: Key Considerations

The digital landscape has ushered in an era where online marketing reigns supreme, and this…

2 hours ago

Boost Your Real Estate Business with Virtual Data Rooms: Benefits You Need to Know

The biggest business industry, real estate, is going digital at a rapid pace. Investors, brokerage…

2 hours ago

How To Find the Best Real Estate Agent for Your Needs

Buying or selling a home is a big decision, and it's important to have a…

21 hours ago

Smart Home Automation: Simplifying Your Life with Intelligent Systems

In today's fast-paced world, where time is a valuable resource, smart home automation has emerged…

2 days ago

Victoria's Adam Gant: Focusing on Philanthropy Through Real Estate Lens

Real estate professionals are a special breed, with unique perspectives on business, property development, city…

2 days ago

Getting Bigger Bite of the Boroughs: A New York City Real Estate Story Reported Demise of the City Greatly Exaggerated

Results of the 2020 U.S. Census revealed that New York City – comprised of five…

2 days ago