One of the first decisions you'll want to make before you even start looking for a second home is how much of a fixer upper are you looking to buy. Many savvy investors enjoy picking up homes that can easily have sweat equity built in them. However, if you purchase a home that has too many flaws, then you may cut into your budget and the turnaround time that you intend to be able to flip or rent it within.
Getting involved in a home that needs complex repairs also puts the home at risk of sustaining further damage, may require you to hire an architect or engineer or require permitting that you cannot instantly obtain. In addition, you may find that the property needs more repairs than you anticipated. Regular maintenance may also be required to keep the home in tip top shape.
If you're anticipating renting your home out, then you'll want to ensure that it's located in a prime location and offers desirable amenities for those on vacation. Instead of selecting a home that's right on the waterfront, you may wish to pick one that's one street back. In doing so, you may avoid certain weather risks and keep costs a bit lower.
When looking at different homes available for purchase, it's easy to get drawn in by a nice swimming pool or certain architectural features. However, you'll want to keep in mind these can be both a blessing and a curse. While they may make your home more attractive to a prospective buyer or renter, they could need to be brought up to code. This can cost significant money and take more time than planned.
You'll also want to think like a renter or buyer when selecting and updating the home. For example, if the home is located in the northeast part of the United States, you may want to ensure it not only has a sparkling pool for guests to take a dip in during the summer but an air conditioner as well.
In calculating costs, you'll want to make sure that you can still rent the property out at a competitive rate once all repairs are made.
If you're considering buying a second home, you may also wish to consult with a Denver real estate investment attorney who can advise you of the legal and tax considerations you should take into account while doing so.
Source: architecturaldigest.com, "Buying a Second House Just Got Easier," Lindsey Mather, accessed Sep. 15, 2017