The Second Homeowner's Handbook: A Complete Guide for Vacation, Income, Retirment, and Investment

by Haden, Jeff

• ISBN13: 9780910627740
• ISBN10: 0910627746
• Format: Paperback
• Copyright: 2006-08-20
• Publisher: Atlantic Pub Co

Summary

According to a study released by the National Association of Realtors, second homes accounted for more than a third of residential real estate transactions in 2004. There is no better time than now to buy that second home you've been thinking about for getaways, vacations, investment, or retirement. Low interest rates, tax savings, rising appreciation, and effortless financing make it simple to profit from a second home.Now is the time for that second home, before the prices climb even higher. Recent figures from the National Association of Realtors show an upward trend in the number of second homes purchased for investment purposes. Investing in a second home now will be a great way to increase your net worth when you retire, if done properly.This book explains how to invest profitably in a vacation or future retirement home. Your second home can be for living, to re-sell, or even rent. This comprehensive guide presents proven tactics to make your second home a smooth and profitable transaction. You will learn: precisely what to look for in a real estate investment, buying prospects, how to rent the place for up to 14 days and pocket the income tax-free, and how to make your current home groundwork for potential real estate investments, how to find the best opportunities, Negotiating, financing, Budget, Needs & Wants, Credit reports, Home buying timeline, building a house, manufactured houses, real estate glossary, mortgage glossary, setting values, home warranties, home owners insurance, creative financing, buy with little or no money down, closing, moving plans, walk thru, closing and settlement inspections, legal contracts, mortgages, what you can afford, deciding what neighborhoods to choose, hiring a realtor, government agencies that can help, considerations for veterans, IRA use, hiring an attorney, tax issues, The offer, calculating monthly payments, escrow. This book is a must have for the investor considering a second home.

Table of Contents

DEDICATION	10	(1)
FOREWORD	11	(2)
INTRODUCTION	13	(3)
CHAPTER 1: BUILD YOUR FOUNDATION
The Benefits of Real Estate Investing	16	(8)
The Risks Are Minimal	16	(1)
Appreciation	17	(2)
Income	19	(1)
Tax Advantages	20	(2)
Leverage	22	(2)
Assess Your Skills and Interests	24	(3)
Personal Skills	24	(2)
Financial Abilities	26	(1)
Your Personal Credit	26	(1)
Put Your Financial House in Order	27	(8)
Improve Your Debt-to-Income Ratio	28	(1)
Gather Down Payment Funds	28	(1)
Build Lending Relationships Now	29	(1)
Perform a Self-Assessment	30	(5)
Establish Your Goals	35	(3)
CHAPTER 2: UNDERSTANDING THE PROCESS
One: Identify the Property	38	(1)
Two: Make an Offer	39	(6)
Three: Obtain Financing	45	(1)
Four: Conduct Inspections	45	(1)
Five: Get Ready for Closing	46	(1)
Six: Perform Your Final Walk-Through Inspection	47	(1)
Seven: Closing	47	(2)
Offers and Purchase Contracts	49	(2)
Financing	51	(1)
Inspections	51	(1)
Title	52	(1)
Title Insurance	53	(5)
CHAPTER 3: DEVELOP A GREAT RELATIONSHIP WITH AN AGENT
Seller's Agents	58	(1)
Buyer's Agents	59	(1)
Dual Agents	60	(1)
Agent Commissions	61	(4)
Finding the Right Agent for You	65	(5)
Get Recommendations	66	(1)
Look for Expertise	67	(1)
Look for a Good Reputation	68	(1)
Assess the Agent's Drive	69	(1)
Establishing Expectations	70	(2)
CHAPTER 4: CHOOSING THE RIGHT LOCATION
Vacation Home	72	(2)
Second Residence	74	(1)
Income Properties	75	(3)
What to Look For - And to Look Out For	78	(1)
What to Look For:	78	(1)
What to Look Out For	79	(1)
Evaluating Properties	79	(10)
Evaluating Appliances	82	(7)
CHAPTER 5: ANALYZING PROPERTIES
For Investors, Cash Flow Is King	89	(6)
CHAPTER 6: MORTGAGE BASICS
Calculating How Much House You Can Afford	95	(2)
How Much You Can Afford From a Lender's Point of View	97	(4)
The Effect of Down Payments	101	(1)
Understanding Credit Reports and Credit Scores	102	(4)
What's on Your Credit Report	103	(1)
How Your Score Is Calculated	104	(1)
Why You May Be Denied Credit	105	(1)
Get Pre-Approved, Not Just Pre-Qualified	106	(4)
How the Loan Approval Process Works	110	(2)
The Effect of Your Credit Rating	112	(4)
Basic Financing Terms, Features, and Costs	116	(9)
Interest Rate	116	(1)
Points	117	(2)
Down Payment	119	(2)
PMI	121	(4)
Fixed Term Mortgages	125	(2)
Adjustable Rate Mortgages	127	(3)
Balloon Loans	130	(4)
Advantages of a Balloon Loan	130	(1)
Advantages of an ARM	130	(4)
CHAPTER 7: SHOPPING FOR A LOAN
Evaluating Settlement Costs	134	(4)
Now Let's Really Go Shopping	138	(4)
Shopping Mortgage Auction Sites	142	(6)
CHAPTER 8: CREATIVE FINANCING
Seller Financing	148	(5)
Types of Seller Financing	153	(2)
Trust Deeds	153	(1)
Contract for Deed	153	(2)
Guidelines for Buying Seller Financed Properties	155	(1)
Assuming a Loan	156	(8)
Assuming With Consent	157	(1)
Assuming "Subject To"	158	(6)
CHAPTER 9: BUYING A SECOND HOME FOR A RESIDENCE
How Much House Should You Buy?	164	(2)
The Pros and Cons of Leveraging Your Purchase	166	(5)
Advantages:	167	(1)
Disadvantages-	168	(3)
CHAPTER 10: BUYING A REHAB OR "FIXER-UPPER"
The Investor's Perspective	171	(1)
Comparing Properties	172	(3)
Location	173	(1)
Size	174	(1)
Condition	174	(1)
Features	174	(1)
Planning for Repairs	175	(2)
Do Not Plan to Repair the Structure	175	(1)
Kitchens and Bathrooms	176	(1)
Avoid Extremes	177	(1)
Evaluating the Financials	177	(7)
Purchase Price	178	(1)
Costs	179	(5)
CHAPTER 11: BUYING RENTAL PROPERTIES
Gross Rent Multiplier	184	(1)
Net Operating Income	185	(6)
CHAPTER 12: FINDING GREAT DEALS FROM OWNERS
The Owners Face Financial Hardship	191	(1)
The Owners Found a Better Opportunity	191	(1)
Lifestyle Sellers	192	(1)
The Less Than Savvy Seller	193	(1)
Owner-Landlords	193	(2)
The Owners Do Not See Potential	195	(1)
Act Quickly, but Prudently	196	(1)
How to Find Below-Market Sellers	196	(5)
Real Estate Agents	197	(1)
Internet Prospecting	198	(1)
Expired Listings	199	(2)
CHAPTER 13: HOLDING PROPERTY
Sole Proprietorship	201	(2)
Advantages of a Sole Proprietorship	202	(1)
Disadvantages of a Sole Proprietorship	202	(1)
Partnership	203	(2)
Advantages of a Partnership	203	(1)
Disadvantages of a Partnership	203	(1)
Partnership Agreement	204	(1)
Limited Liability Company	205	(1)
Companies and Corporations	205	(4)
Advantages of Incorporation	206	(1)
Disadvantages of Incorporation	206	(2)
Basic Advantages of Incorporating	208	(1)
Trusts	209	(3)
CHAPTER 14: PROPERTY MANAGEMENT
Fair Housing Act	212	(1)
Types of Leases	213	(4)
Typical Lease Provisions	217	(4)
Screening Tenants	221	(2)
Day-to-Day Management	223	(3)
Managing Your Own Properties	223	(3)
Tenant Evictions	226	(3)
Hiring Others to Manage Your Properties	229	(5)
CHAPTER 15: BASIC IMPROVEMENTS FOR QUICK PROFITS
Decorating	234	(1)
Electrical Projects	235	(2)
Walls, Doors, and Windows	237	(3)
Bathroom	240	(1)
Kitchen	241	(2)
Safe and Efficient Systems	243	(1)
Home Exterior	244	(2)
Landscaping	246	(2)
CHAPTER 16: INCREASING RENTAL PROPERTY PROFITS
Differentiation	248	(2)
Provide a Service, Not Just Housing	249	(1)
Before You Buy a Rental Property...	250	(2)
Establish Optimum Rent Amounts	252	(2)
Increasing Your Value Inside	254	(3)
Curb Appeal	257	(2)
Make Improvements to Generate More Income	259	(3)
Add More Rentable Space	260	(1)
Change the Use of a Property	261	(1)
Lower Your Expenses to Increase Your Value	262	(4)
CHAPTER 17: MAXIMIZE YOUR RESALE PRICE
Mental Preparation - Do Your Homework	266	(4)
Develop Objectivity	267	(3)
Eliminate Clutter	270	(5)
Rent a Storage Unit	271	(1)
Organize as You Unclutter	272	(1)
Clean as You Go	272	(1)
Closets and Cabinets	273	(1)
Furniture	274	(1)
Plants	274	(1)
Doors	275	(1)
Cleaning	275	(6)
Clean Everything	276	(1)
Clean All Woodwork	277	(1)
Clean Every Window and Light Fixture	277	(1)
Consider Professional Cleaning	278	(1)
Curb Appeal	279	(1)
Front Door	279	(1)
Landscaping	280	(1)
Repairs	281	(1)
Depersonalize Your House	282	(3)
Paint	283	(1)
Floors	283	(1)
Personal Items	283	(1)
Remove Personal Fixtures	284	(1)
Stage Your Home for Maximum Appeal	284	(1)
Additional Home Sale Tips	285	(4)
GLOSSARY	289	(54)
INDEX	343	(5)
ABOUT THE AUTHOR	348