If you have been considering the Kissimmee Florida area for a second home or an investment home there can be quite a bit of confusing information available to you. While you may have knowledge of what it was like to buy your current home, there are some differences that shouldn't be overlooked. Let's take a look at some key differences in buying a second or investment home.
While a standard mortgage was probably used for your primary residence, mortgage companies view second and investment properties differently. Unless you are planning to pay for your new property in all cash, mortgage companies will expect a higher down payment percentage, and possibly a higher interest rate, for a second or investment property. These requirements are linked to the increased risk that the lender is taking on as you now have two properties you must prove you can afford.
Needs vs Wants
One of the biggest differences when buying a second home or investment home is how you prioritize needs and wants. When searching through the many houses for sale in Kissimmee Fl you will undoubtedly find features or elements of certain homes that you like more than others. But you need to remember what the purpose of the home will be.
When buying a second home, you can prioritize features you find convenient, fun, or helpful that you may not have in your primary residence. These could be features like a pool, a large backyard area, or interior upgrades that you've always wanted in a home but never had the opportunity for until now. Similarly you can paint and decorate as you see fit and in such a way that will put a smile on your face from the moment you walk in.
For the price of an investment property you need to think about those who will be renting the space, whether it be short term or long term, and the financial benefits of certain features. While you may love a top of the line shower set up in your own home, the cost may not be justified in a more simple rental property. Likewise, neutral colors and decor may help a rental property appeal to the biggest potential pool of renters (although a beach front or niche property can certainly succeed on the short term rental market when featuring beach themed decor).
Similar to wants and needs, you should be considering outside factors that can affect your second or investment home. While location is often talked about as the key to buying a primary home, it can also be an important factor in whether or not your rental property sits vacant or is booked for the summer. You may not want to be right near the busy theme parks in your vacation home, but those looking to rent short term housing for their family vacation may be willing to pay a premium for a shorter drive to these attractions.
Considering the market as a whole is also important when looking at second homes and vacation homes. Buying a second home during a boom in prices could leave you regretting your purchase down the road. Similarly, buying a large four bedroom villa and pricing yourself out of the rental market will keep the home vacant and costly.
Buying a second or investment home can be a wonderful opportunity and shouldn't be overlooked. But doing so with the right knowledge ahead of time will make all the difference. With these tips, you are well on your way to being handed the keys to your new home in Kissimmee.