by Broderick Perkins
"Top," "Best," and "Most" lists rarely tell the whole story, but they do serve a useful purpose.
As literary distillations of larger stories, lists offer the kind of on-the-go information we need so we can pocket more time -- the real currency of the New Millennium.
The best of the best of these lists are presented with a pinch of intrigue, turn of phrase, or perhaps a dash of humor. They hold our interest captive for the few fleeting moments we have to spare, but then leave us sated with pointed information.
Craig Venezia, author of the new "Buying A Second Home: Income Getaway or Retirement" (Nolo, $24.99) offers one such list for the second home crowd.
Venezia is a contributing real estate writer for the San Francisco Chronicle who telecommutes to work from his Boston-area home. He also served as a Wells Fargo executive, worked closely with ETrade Financial and knows the ins and outs of structuring private loans between family and friends.
Given the second home market has recently taken it's lumps with the rest of the owner-occupied housing market, the book is right on time.
No matter how time-starved you may be, a full read of the book -- from deciding why you want a second home to the forms you need should you decide to hire a property management firm -- will send you to the head of the class.
Executives from Prudential New Jersey Properties, MSN Money, Lending Tree, National Association of Home Inspectors and the 2nd Home Journal, all say so.
Instead of saving the best for last, Venezia makes the read easy by getting you quickly into the tome with his "Seven Secrets About Buying a Second Home."
Here's what he says.
- Know the right time to buy. One of those times is now. The correcting real estate market is shining on the second home sector. More properties on the market, relatively low interest rates and motivated sellers have combined to put the buyer back in the driver's seat.
- Know if a second home purchase makes financial sense. A second makes sense in the first place if you can create a realistic, affordable budget in advance so that you buy within your means. Stretching here is not very healthy. Take stock of your current and projected income, expenses and rental income (if you plan to rent out the property) and do the math. You accountant and financial planner can help you weigh the financial risks.
- Know where to go. Venezia says choose a location based both on the potential for property's value to appreciate -- especially if you aren't going to rent it -- and guest-preferred destinations. Real estate agents can provide the market research you need.
- Know and understand the tax consequences. In some cases, buying a home across the city border can trim your annual property tax or any occupancy or "hotel" tax collected by some local jurisdictions, but you'll still bask in the glow of the location.
- Know about nontraditional financing. This isn't about those risky nontraditional loans that are costing homes, but relative loans -- loans from your family bank. A loan from a family member can save you thousands in interest over the life of the mortgage with cheaper family rates and, perhaps, keep the money in the family instead of sending it to the bank.
- Know about rental income that can offset your expenses. Rent your property out for just part of the year and you can subsidize the cost of owning a second home, says Venezia.
"Keep in mind that being a landlord doesn't mean sitting back and watching rent checks roll in. It takes time, money and commitment. Know what you're getting into before you venture too far down that path," he says.
- Finally, know how to protect your investment. Whether your second home is a pure investment, a weekend getaway, or a place to eventually enjoy when you retire, real estate is an Investment. Maintain the property, keep it fully insured, have it inspected regularly, and watch your equity grow.
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