Wednesday, August 17, 2022 / by Nicole Solari
The real estate market in the United States is far from ideal. Between the lack of supply for new construction and renovations, to the overall rising prices of homes, people have been responding to the market in a variety of different ways. One route that people have been taking, as noticed by real estate agents, is that people will purchase their “second” home first. What this means is that instead of buying a house in their area, which might be astronomically expensive, they’ll purchase a home in a more remote area and use that as their second home.
Ability to Purchase Real Estate Faster
Real estate, especially these days, is going to be a great investment. In most cases, the faster you purchase a home, the sooner it can begin to gain equity or value. If you choose to purchase a home away from the area in which you want to reside, specifically in a remote area, you will reap the benefits of owning a home much sooner. If you live in a popular city, where homes are likely going to be very expensive, you can push the process along more quickly by purchasing a more remote spot.
Using the Second Home to Fund the First Home
If you purchase a second home first, you can then use it to fund your “first” or primary home. Whether you plan on renovating it and selling it for a higher price, renting it out to tenants, or even listing it as a vacation home on a site like AirBnB, you can begin to save up some money to buy your first home. Be aware that this could take a while, so patience is key. But it is also something that will definitely pay off. According to top agent insights, purchasing your second home first can help you save around $76,000 on a new “first” home.
More Difficult to Keep Up With
Since this home won’t be where you plan on living full time, it will be harder to keep up with. Any sort of maintenance or repair will require more effort, and you’ll have to do some planning or strategizing to get things done. When purchasing a home that’s somewhat distant from where you are now, come up with a plan of attack and use your resources to your advantage. Having people you can trust to get any jobs done well is a must.
It Might Take Longer to Gain Equity
Unless the remote area where you bought your house suddenly becomes super popular, which is definitely a possibility, your home might take longer to gain equity. This is because homes in the area in which you purchased a home might take a bit longer to sell. However, that doesn’t mean you should ever feel discouraged. A little bit of patience and proper home maintenance can go a long way.
If you do decide to buy your second home first, we recommend you find a realtor who will have some positive insight. Additionally, it’s important to weigh all of the pros and cons before making this decision.