Buying second homes, or vacation homes, even before owning a first home is becoming a trend among homeowners. Real estate experts say that it’s gaining popularity to acquire a vacation house while still renting a primary residence.
Buying a house a few miles away from the city is cheaper by as much as five folds, than owning one in an urban location. It’s also a great way to build equity and establish good credit, which are prerequisites to eventually owning a first home.
Second homes can also be rented out for short periods to generate income and pay for its own mortgage costs. Expenses on maintenance and utilities must be carefully considered, though, for cost-effectiveness.
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The financial advantage of investing in a secondary house before owning a primary house is quite obvious. It’s cheaper to acquire and it boosts the capability of the house owner to buy their primary house in the future. Due diligence must be exercised when deciding to buy a second home first because policies, such as home equity loan and mortgage rates, differ from the policies when buying primary homes. Doubled expenses in maintaining two houses must also be a serious point of consideration.