The tension in international markets driven by the conflict in Ukraine, together with the existing volatility in the energy market, and still the aftermath of the Covid-19 pandemic, sum a further dose of uncertainty when deciding to buy a second home. In this post, we will try to give you some advice on the criteria to take into account when buying a new property.
Investing a significant amount of funds in a single asset, such as a home, may not be a good decision when markets are facing periods of high volatility, and it is not yet clear how interest rates will hike or how the rising cost of commodities will affect our economy.
Traditionally, investing in real estate has been a safe bet, and has helped homeowners to protect themselves from inflation.
However, the expensive building materials, as well as the fluctuations on exchange rates, and the supply chain issues have driven up prices in the real estate sector. Additionally we are facing a volatile environment, with the possibility of stagflation, and we are now dealing with more challenges when looking for liquidity by selling real assets.
Taking into account all the doubts that may arise in the decision making process, we break down some recommendations when buying your second home:
- Seize the opportunities: There may be homeowners who may be in a rush to sell their homes at this time, which may result in a higher price cutdown.
- Interest rates are at relatively low levels and may remain so for the foreseeable future. The purchase of a home usually requires third-party financing and, today, interest rates are relatively low and are expected to remain so for some time to come.
- Make sure you can weigh all-year costs. Owning a second home entails several expenses, some as an initial outlay, and others on a recurring basis, such as insurance, taxes, energy supplies or maintenance. These costs are consistent all year round, even if you are not using your home. Some end up renting out to cover costs, but that opens a door to a completely new set of problems such as managing rent and tenants, resolving problems, tax returns, etc. That is why when purchasing a new home, it is key to consider the expenditure level that we can afford, both immediately and in the long term.
- Considering co-ownership: Buying a house through a co-ownership model can be a suitable option whether you are not willing to make a large financial outlay to acquire a top-level property, but still want to enjoy a great second home. Co-ownership is a model that provides great flexibility and peace of mind to co-owners: buyers enjoy the benefits of a house with greater comfort and value, but without having to allocate a large amount of resources. In order to facilitate this process, at Secconda we are specialists in taking care of the entire purchase deal, and we ensure set-up & home management at its best. As proven by our clients, our system provides tangible real estate ownership without all the hassles. With Secconda you may use your home recurrently throughout the year, as each share in a Secconda Home grants 44 stay nights in a 365 day period. You can browse our Listings through our available homes and the most significant details of the buying process.
In short, whether or not to buy a second home is a very personal decision, in which one must consider enjoyment & facilities criteria, investment capacity, and purpose of the acquisition. For instance, the co-ownership model is particularly suitable for those seeking to expand their assets by acquiring a luxury home in an area with revaluation prospects. Buyers hold a share of the real estate asset, fully enjoying their property, but without incurring extra expenses or worrying about its maintenance. Thus, they have a second home for vacation periods, for rest or simply for their enjoyment, at a fraction of its cost.
If you still have any doubts, do not hesitate to Contact Us, or browse through our FAQs. We will be delighted to hear from you and to clarify your concerns without any compromise.
