The cost of living crisis is making things more difficult for everyone. But investing in property can still be an excellent long-term investment, as long as you get it right.
So let’s look at why investing in a second home is a smart option and what you should consider:
Flexibility in terms of how you choose to use it
You can have flexibility on how you wish to use your second home but you need an initial plan, to begin with. This will assist in finding a property that best suits for your needs and will influence your budget. Factoring in a degree of flexibility is wise particularly if you plan to keep it for the long term.
Perhaps you initially want it to rent out but later decide to use it for a holiday home or allow a family member to live in it. If you make the correct purchase you can change its purpose to adapt to changes in your life and those close to you.
Just make sure you do plenty of research before considering making a purchase to ensure your plans are viable and affordable. You can do some of this yourself but it’s wise to consult property experts for their knowledge of the local market. They could offer you a house valuation or property report on something you have your eye on. Don’t forget to check the ongoing bills of any property such as energy and water.
When you own a second home you ultimately always have the benefit of knowing you can sell it whenever you see it is the right moment to do so. For instance, if one tenancy has ended and the property’s price is currently at a record high level, you could stand to make a significant profit by selling at that time. A second home is a great fallback that helps provide you with long-term security.
A way of generating extra income
It makes sense to diversify your investments, particularly as stocks and shares have mainly decreased in value in recent years. Putting some of your money into bricks and mortar is a logical alternative.
If you want to generate an income from your second home you have several options. You could buy a house that needs modernising and then either do the work yourself or get professionals in to do it. Then sell the property for a quick profit and use that money to help fund another property. If you keep repeating the process you could boost your income further.
Alternatively, you could rent out the property as a holiday let if there is a demand in your area for this type of accommodation. This can be lucrative if you get regular bookings although there is more work involved than with a traditional rental property, particularly during the change-over of guests. You could employ third parties to help with this if you wish but that would lower your profits.
If that sounds like too much work you could rent out your property for a length of lease you feel comfortable with. This also provides the flexibility of being able to offer it furnished or unfurnished. You may wish to look out for somewhere that provides storage should you need it. This option will still have some occasional maintenance, but it’s generally much less hands-on than with a holiday let.
A treasured asset to pass on to your close ones
It is nice to leave your family and close ones with something significant that can be useful to them when you leave this world. Investing in a second home will mean you have a tangible asset to pass on to others. You never know, your children may decide to go and live in your second home one day and that’s a lovely option to have.
Property has proved to be one of the most reliable forms of long-term investment in recent decades with steadily rising valuations whereas other types of investment have been more volatile. Although there are no certainties going forward it’s difficult to see this trend changing any time soon, especially when considering the constant reports of a shortage of affordable housing.