Editor’s note: Robert Bruss passed away on Sept. 26, 2007. This was one of the last real estate columns he wrote. Inman News is publishing Bob’s last work as a final salute to the nation’s most well-known real estate writer.
According to Craig Venezia, author of “Buying a Second Home,” there are three primary reasons for buying a second home: investment (rental income and market-value appreciation); getaway; and/or retirement. His new book explains all three motivations, along with their pros and cons, and how to combine them as the owner’s lifestyle changes.
The book begins by asking the reader, “What is your main reason for buying a second home?” Then it proceeds to explain seven steps for a successful second-home purchase.
Purchase Bob Bruss reports online.
If you expect the book to provide details of buying a second or vacation home, such as pitfalls of septic systems and how to winterize a vacation cabin, you will be disappointed. Instead, Venezia takes a generic viewpoint of what to look for in a second home, with heavy emphasis on the financial and practical aspects.
Just in case you don’t think second homes are important to the U.S. economy, according to the National Association of Realtors, 40 percent of home sales are second homes. That includes houses and condominiums purchased as investment rentals, for short-term getaways and for future retirement use.
The author explains the details of finding and financing second homes, usually in distant locations. He cautions buyers about the possible pitfalls of renting far-away properties to tenants and why it is important to hire a professional management company to find short- or long-term quality tenants.
At least 35 percent of the book is devoted to the financial details of owning a second home. Venezia cautions buyers about the difficulty of obtaining a mortgage on a second home and why lenders usually charge higher interest rates on these higher-risk loans.
Buyers are cautioned — if they will depend on seasonal rental income — to be prepared for long vacancy periods unless the property offers two-season attractions, such as winter skiing and summer boating. The author does not appear to be a big advocate of buying a second home and being dependent on rental revenue.
Much of the book is devoted to classic “how to buy a home” details, such as using a buyer’s agent to shop for a home, avoiding mortgage junk fees, and anticipating home-ownership costs for repairs, especially if the property will be rented to tenants. Venezia suggests working with professionals, especially realty agents, mortgage brokers, home inspectors, and real estate attorneys, rather than being a do-it-yourself buyer.
The chapter about “buying straight from the seller” is one of the book’s best because it warns of the pitfalls of dealing direct with a seller. The author says there are three types of “for sale by owner” (FSBO) sellers: the savvy seller; the uneducated seller; and the miserly seller. He highly recommends using a buyer’s agent to negotiate with these difficult sellers.
Chapter topics include “What a Second Home Really Costs”; “How Much Second Home Can You Afford?” “Narrowing Your Search: What and Where to Buy”; “Picking the Right House”; “Fixer-Uppers: Finding the Gems and Avoid the Junk”; “Raising the Cash You’ll Need Up Front”; “How Family and Friends Can Help”; “Finding Your Way Through the Mortgage Maze”; “Being a Landlord: What You Need to Know”; and “Tax-Saving Strategies.”
Virtually all aspects of buying and owning a second or vacation home are included in this ultracomplete book. Author Craig Venezia doesn’t hesitate to emphasize the second-home negatives as well as the positives. On my scale of one to 10, this superb well-organized book rates a solid 10.
“Buying a Second Home,” by Craig Venezia (Nolo Press, Berkeley, Calif.), 2007, $24.99, 309 pages; available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
(For more information on Bob Bruss publications, visit his
Real Estate Center).