Thinking of Buying a second property?


Thinking of buying a second property?
Have you ever thought of buying a second property, without selling the first one? Often people rule out that possibility, without exploring their options. This is a situation; you own a home and now planning to buy a new home. Your options could be:
1. Sell the existing home and buy a new one or
2. Rent out the existing home and buy a new one
Well ask yourself few questions:
1. Are you willing to be a landlord?
2. If you are willing, how are you going to identify the right tenant?
3. Once the tenant is in place, how will you handle, the issues associated with leasing?
4. What is the cost of leasing or selling?
5. If renting out, did you take into account vacancy and management costs?
6. What is your long term goal? If passive income is one of your goals, is it not better to have rental properties in your investment portfolio?
7. What will the likely future value be? If capital appreciation is anticipated, better to lease. Right?
8. If sold, how will the money be invested? What will the return be? Is it going to be higher than renting out? How to compare both?
9. Most important, will you be able to get the required finance (mortgage) without selling the current home?
In nutshell, think about:
• Your financial situation.
• Local market conditions for rental homes.
• Your future plans or goals.
• Your tolerance for being a landlord.
• Current and projected home prices.
• Rate of return
• Taxes in general.
Need some assistance to decide?

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