While choosing which property to buy, you have to be very careful. Look at a number of properties before choosing a property. The opportunity of an additional income source or a vacation home can be availed when a second property is bought.
The Pros
Purchasing property is always considered to be a solid investment. The market is not booming like it did a few years ago when it was at its peak. The market is slowly recovering after a period of low returns. Over the long run, you will find that your investment will continue to grow.
Additionally, there are some generous tax incentives that play into your favor when purchasing a second property. Also, if you're planning on using it as a rental property, you will get the benefit of a strong, secondary income.
The Cons
A second property is hard to maintain, especially if it is not brand new. If you have a lot of money to burn and you don't care about spending too much on maintenance and repairs, then you could opt for a luxury like this. Another property means another set of expenses like finishes, construction, electrical and plumbing, that are just as costly as your primary residence.
If you are planning to make a vacation home out of the second property, then you must have enough time and money to give.
Important things to remember before making that decision
A real estate asset is the best investment one could make. Prior to purchasing a house or investing in real estate, few things should be taken into account.
If you are planning to buy second hand home, make sure to have the property inspected by a professional home inspector. Beware of the words voetstoots or "buying the property as is". Always have it inspected for safety and insurance. Do not go and buy someone else's problems.
Before finalizing the purchase of second property take into consideration the tax expenses. It is an addition to your taxable asset. You will have to pay for property tax for one more property in addition to your primary residence. If you are planning to rent your second property, you will have to pay the income tax also. So plan thoroughly before making your purchase. However, a good second property, which lies outside the border of your town, can cut away a huge amount from your annual property tax bill.
Be creative when coming up with good financing. The higher your down payment the lower your monthly premiums will be, which will help you to save even more. You can also refinance your car and use the money to pay extra on your monthly home loan installment, which will be a massive saving in the long run. Another option is to finance your property by taking some from your life insurance. Look for home loan options in your area, but be careful that the interest rates can be much higher. You will always find good reviews on the Internet and asking other homeowners.
The Pros
Purchasing property is always considered to be a solid investment. The market is not booming like it did a few years ago when it was at its peak. The market is slowly recovering after a period of low returns. Over the long run, you will find that your investment will continue to grow.
Additionally, there are some generous tax incentives that play into your favor when purchasing a second property. Also, if you're planning on using it as a rental property, you will get the benefit of a strong, secondary income.
The Cons
A second property is hard to maintain, especially if it is not brand new. If you have a lot of money to burn and you don't care about spending too much on maintenance and repairs, then you could opt for a luxury like this. Another property means another set of expenses like finishes, construction, electrical and plumbing, that are just as costly as your primary residence.
If you are planning to make a vacation home out of the second property, then you must have enough time and money to give.
Important things to remember before making that decision
A real estate asset is the best investment one could make. Prior to purchasing a house or investing in real estate, few things should be taken into account.
If you are planning to buy second hand home, make sure to have the property inspected by a professional home inspector. Beware of the words voetstoots or "buying the property as is". Always have it inspected for safety and insurance. Do not go and buy someone else's problems.
Before finalizing the purchase of second property take into consideration the tax expenses. It is an addition to your taxable asset. You will have to pay for property tax for one more property in addition to your primary residence. If you are planning to rent your second property, you will have to pay the income tax also. So plan thoroughly before making your purchase. However, a good second property, which lies outside the border of your town, can cut away a huge amount from your annual property tax bill.
Be creative when coming up with good financing. The higher your down payment the lower your monthly premiums will be, which will help you to save even more. You can also refinance your car and use the money to pay extra on your monthly home loan installment, which will be a massive saving in the long run. Another option is to finance your property by taking some from your life insurance. Look for home loan options in your area, but be careful that the interest rates can be much higher. You will always find good reviews on the Internet and asking other homeowners.
About the Author:
A freelance writher for home loan website http://123homeloans.co.za, John Adamson loves to share his knowledge on home loans and mortgages in South Africa. Click here for more related articles.
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