"Top," "Best," and "Most"
lists rarely tell the whole
story, but they do serve a
useful purpose.
As literary distillations
of larger stories, lists offer
the kind of on-the-go
information we need so we can
pocket more time -- the real
currency of the New Millennium.
The best of the best of
these lists are presented with a
pinch of intrigue, turn of
phrase, or perhaps a dash of
humor. They hold our interest
captive for the few fleeting
moments we have to spare, but
then leave us sated with pointed
information.
Craig Venezia, author of
the new, "Buying A Second Home:
Income Getaway or Retirement,"
offers one such list for the
second home crowd.
Venezia is a contributing
real estate writer for the San
Francisco Chronicle who
telecommutes to work from his
Boston-area home. He also served
as a Wells Fargo executive,
worked closely with ETrade
Financial and knows the ins and
outs of structuring private
loans between family and
friends.
No matter how time-starved
you may be, a full read of the
book -- from deciding why you
want a second home to the forms
you need should you decide to
hire a property management firm
-- will send you to the head of
the class. Instead of saving the
best for last, Venezia makes the
read easy by getting you quickly
into the tome with his "Seven
Secrets About Buying a Second
Home."
Here's what he says.
Know the right time to buy.
One of those times is now. The
correcting real estate market is
shining on the second home
sector. More properties on the
market, relatively low interest
rates and motivated sellers have
combined to put the buyer back
in the driver's seat.
Know if a second home
purchase makes financial sense.
A second makes sense in the
first place if you can create a
realistic, affordable budget in
advance so that you buy within
your means. Stretching here is
not
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very healthy. Take stock of your
current and projected income,
expenses and rental income (if
you plan to rent out the
property) and do the math. You
accountant and financial planner
can help you weigh the financial
risks.
Know where to go. Venezia
says choose a location based
both on the potential for
property's value to appreciate
-- especially if you aren't
going to rent it -- and
guest-preferred destinations.
Real estate agents can provide
the market research you need.
Know and understand the tax
consequences. In some cases,
buying a home across the city
border can trim your annual
property tax or any occupancy or
"hotel" tax collected by some
local jurisdictions, but you'll
still bask in the glow of the
location.
Know about nontraditional
financing. This isn't about
those risky nontraditional loans
that are costing homes, but
relative loans -- loans from
your family bank. A loan from a
family member can save you
thousands in interest over the
life of the mortgage with
cheaper family rates and,
perhaps, keep the money in the
family instead of sending it to
the bank.
Know about rental income
that can offset your expenses.
Rent your property out for just
part of the year and you can
subsidize the cost of owning a
second home, says Venezia.
"Keep in mind that being a
landlord doesn't mean sitting
back and watching rent checks
roll in. It takes time, money
and commitment. Know what you're
getting into before you venture
too far down that path," he
says.
Finally, know how to protect
your investment. Whether your
second home is a pure
investment, a weekend getaway,
or a place to eventually enjoy
when you retire, real estate is
an Investment. Maintain the
property, keep it fully insured,
have it inspected regularly, and
watch your equity grow.
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