So, you went through the entire real estate process and managed to buy your first home only to find out that it is completely unsuitable. What next? Buying a second property is a daunting prospect, but it can be an excellent long-term investment, depending on how you approach it. Whether you want to put your old property back on the market or lease it out, here is a short guide to simplify the process.
Reasons to Buy a Second Home
There are many reasons why people end up investing in a second home. Firstly, it could be that your first home seemed perfect at the beginning, but a few months down the line, you have spotted a few major flaws that you just cannot live with. This could be serious structural issues or exterior problems such as noise pollution in the area or a change in personal circumstances.
Long Term Investment
Some people buy a second home as a long-term real estate investment. They either rent out their first home or purchase the second property to let it out to tenants. Not only will the rental income help pay for the mortgage, but it can also provide the homeowner with an extra source of income too.
What Should I Do with my First Property?
You are on the first step of the property ladder and have invested in your first home, and now you need to work out what you want to do with the first property. If you are purchasing the second property as a home and just want to get rid of the first house, simply put it back on the market. Do your research and try to re-sell the home when it has appreciated. This may not be an option if you need to move out of the house; however, selling it at the right time is the smartest move. Not to mention, if you are having trouble with the upkeep of your current property, then selling it on and starting fresh is probably the best option.
Getting a bridge loan is an ideal solution for homeowners who want to sell their property quickly. Bridge loans enable borrowers to access cash immediately to secure a second home. In addition, bridge loan companies, such as Sachem Lending, can help you secure a second property using your first, unwanted property.
Renting Out Your First Home
As mentioned above, leasing out your first property is a savvy move that can turn into a money-making, long-term investment. Renting out a property provides homeowners with a passive income, but you need to research this option before going all in. Renting out a property to tenants can be extremely stressful, especially if you have no experience in being a landlord. You need to ensure your property is safe to reside in, money has to be put aside for maintenance and upkeep, and you may even have to deal with difficult tenants. In addition, if you don’t have the means to purchase a second home, renting out your first home could mean that you need to rent a place to live in.