Even with home prices rising slightly in some areas around Roanoke, there remains a solid demand among buyers to purchase second properties. I'm a big fan of second homes if the purchase makes sense for you. Because no matter how you intend to use the property, the right second home can be an excellent investment in your financial future.

Before you jump in, let's talk about some of things you should do to ensure you have a clear idea of your options.

Determine the purpose of the property

Very often, I'm working with clients from out of the area who are looking for a retirement (or vacation-to-retirement) home. Perhaps they have family in the area and want to get back this way to be closer to children and grandchildren. In fact, it's sometimes the children who contact me first.

In these cases, the buyers may not plan to move into the home immediately, but they see the advantages of buying while interest rates are still at historic lows and home prices haven't gotten out of reach. Owning the home now also can have benefits, such as providing a vacation getaway when you come to visit or supplying some rental income to help cover the mortgage until you move in full time.

Another situation I see sometimes, especially when there are high-quality entry-level properties on the market, is the investor that wants to try his or her hand at owning a rental property. Oftentimes, these buyers are prepared to make some improvements to the home to increase its potential value as a rental.

Define your needs and long-term goals

Closely related to the first question is an evaluation of your needs and long-term goals. Clarifying these will go a long way to helping you set your budget and define a buying strategy. For example: Do you need space for lots of family to come visit? Do you hope to be able to move into the home, then age in place? Are you planning to use this for an additional stream of income for some period of time? Will this be a home you'll want to leave to your children?

Each of these answers makes a difference in the approach you should use with your second-home purchase.

Decide what type of property best meets your needs

Once you've thought about what you're trying to accomplish by buying a second home, it's much easier to determine what type of property you should be pursuing. For example, if this home will eventually become your retirement home, it's a good idea to consider a home that can provide one-level living and will accommodate your changing needs as you grow older. If you have a large family and are the holiday gathering place, you'll need room to accommodate those visits and family-friendly amenities nearby. If you want to rent the property, it might make sense to buy a condo or small single-family home to get started.

Get to know the area where the home is located

This is where your local real estate agent is most valuable to you. Especially if you're buying in an area where you don't live, you need to do your research about neighborhoods, amenities and the local economy. For investors, consider the types of clients you're trying to recruit and look for neighborhoods where they'd be comfortable and safe.

In every case, your very best source of information will be a full-time Realtor who has experience in the market where you're buying.

Consider your financing options

You might be surprised to learn that many second-home purchases are made with cash, which gives the buyer additional flexibility and leverage when negotiating. If you're planning to finance the purchase, you'll need to investigate conventional mortgage loans. Government loans such as FHA and VA loans are usually not available for second-home purchase, although FHA has a couple of exceptions. As with any home purchase, talk with your lender early to get a handle on your options and buying power.

Run the numbers

The thing that most often gets owners of second homes into trouble is that they underestimate the costs associated with owning a second home. If you finance, you'll have the cost of the mortgage, but on top of that, you've got to consider property taxes, insurance, utilities and maintenance fees. Because you won't be in the house all the time and may live far away, you might have to contract the services of a property management company.

If you're renting the property, you may also choose to work with a property manager. If not, don't forget about costs for preparing the property for tenants, marketing the property, conducting credit and background checks, cleaning and making repairs between renters or even being able to let the property sit vacant while you find a qualified tenant.

Understand the tax implications

The 2018 tax legislation has changed deduction guidelines related to mortgage interest and property taxes. Be sure to consult your tax adviser to determine how these will affect you if you purchase a second home. If you plan to rent the home for more than 14 days per year, you'll likely be required to claim rental income and will be able to deduct some of your expenses.

If you have other questions about buying a second home, I'd be happy to answer them for you. If you're looking outside the area, I can help you find a qualified Realtor to handle your transaction. And if you live outside Roanoke but want to buy in this area, I'd love to put my experience working with relocations to work for you.

Contact me anytime at (540) 793-0442 or rpayne@mkbrealtors.com. Be sure to like my page on Facebook.