My Second Home is No Longer Financially Sustainable. What are My Options?
“Having a vacation home in beautiful San Diego has been a wonderful way of life for my family,” said a recent client of ours. “Living in Nevada during the winter months and enjoying our vacation townhome near the beach June through October has just been amazing these past 7 years. But now, with a major salary cut at my job, we no longer can afford the luxury.”
They faced the question of what to do with their second home. It was certain that they could no longer afford to keep both properties, but being in another state would make selling much more difficult. They did, however, have some options.
Sometimes it can be a viable course of action to hold on to a second home by turning it into an investment opportunity. A change in the way you view the getaway house can help keep it in your hands. Opening the door to hosting other dwellers may be the solution to retaining ownership of the San Diego property you’ve enjoyed for so many years. Conversely, the complications of holding onto the place may have you considering a sale as the answer. It’s not an easy decision, but here are some considerations to keep in mind while you make it.
Keeping Your Second Home
Before we take a look at selling the property, let’s look at the alternatives. Choosing to hold onto a second property through a period of financial uncertainty requires reconsidering the purpose of the property. Holding onto the property as an investment asset with lessees is one possibility that can help you keep the San Diego home in your name. Alternatively, leasing out will force you to give up your getaway home, so you may want to rent it out short-term. Let’s take a look at both options:
Lease it Out
Pros:
- A home that pays for itself. You can afford to cover the costs of your second home by funding it with a tenant’s monthly payments.
- Extra change. Market growth in rental units has translated to higher profits for landlords, meaning you could actually make money by leasing out.
- Holding for the future. While your salary cut puts strain on your present finances, you may resolve the issues in the future, and merely leasing your second property allows you to use it as your vacation residence in the future.
Cons:
- Responsibilities. Landlords are legally obliged to meet several requirements, like appliance maintenance, deposit accounts, and legal protections, for the well-being of their tenants. This takes time and effort, and may be difficult if you are working from another state.
- Repairs. Keeping tenants means keeping everything in good working order all year round. The appliances will see more wear and tear, and in turn require more costly maintenance.
- Lost getaway. Leasing out your second home won’t be likely to attract lessees interested in living there only half of the year, meaning you’ll lose out on the reason you bought the property to begin with.
Vacation Destination for Others
Pros:
- Time. By renting it out short-term as a vacation home for others, you can block off the dates you wish to use it. The flexibility affords you the option to take whatever days you like off the calendar.
- Money. Like leasing, you can make a little scratch from renting out your property to travelers seeking short-term accommodation.
Cons:
- Time. While you get days to yourself for leisure, you’ll also be spending time at the property for work, cleaning after each customer as they leave after a few days.
- Money. Replacing the items used on a daily basis for your customers adds up. You’ll need to fill soaps, wash towels, bring toilet paper, not to mention the costs of cleaning supplies used during each turnover. Also, there are no guarantees that your open dates will be filled—no visitors will mean no income.
Selling Your Second Home
The choices involved with keeping the vacation home come with some added responsibility, which may lead you to opt for selling the property instead. There are a pair of options available to you if this is what will ultimately be the best choice for you. If the idea of holding onto the property seems more hassle than it’s worth, you might consider selling it on the market. However, if the complications of a traditional sale sound like a headache, a quick and simple home sale may be the best option.
Selling on the Traditional Real Estate Market
Pros:
- The best deal. Hiring a real estate agent to move your second home off your hands will have them working on your behalf to make the most money out of the deal.
- The agent does the legwork. Selling traditionally does come with added responsibilities, like organizing appraisers or inspections, but having a real estate agent working on your behalf will alleviate some of that stress.
- Advertising. Real estate agents will handle all the advertising themselves, and you won’t have to worry about handling any of the advertising yourself.
Cons:
- Paperwork. Selling through an agent on the traditional market means being a part of the process, coming to the table with paperwork, inspections, appraisal, etc.
- Lengthy process. If you’ve decided you don’t want your second home anymore, you probably don’t want the hassle of waiting around for it to sell, but an agent can take weeks to months finding a willing and eligible buyer. Even then, it will be another 30 to 60 days before closing.
- Being present. If you hire an agent, they’ll handle much of the work, but you will need to be available for them, which means trekking to San Diego for the signing. If you choose to do everything remotely, it can cause further delays, dragging the process out longer and costing you even more money.
Selling Direct and Fast
Pros:
- No paperwork. A quick sale is nothing more than signing over the property to the buyer. You don’t have to worry about corralling a pile of documents to reach the finish line.
- No buyer search. Selling directly to a company specializing in fast home sales means bypassing the credit checks and mortgage woes of a traditional buyer.
- Fast. Selling direct to a company like ours means eliminating the wait. Without any of the hassle of a traditional sale, it’s over before you can even consider it a burden.
Cons:
- No more vacation home. While selling your home offers a lump sum that can fund alternative vacations, a sale of your second property means losing that summer home.
- No competition. A traditional deal could possibly land you in the middle of a bidding war, driving up the purchase price of your home and fetching a better deal.
- Out of the game. One of the draws of holding property is the eventual payday of an up-market sale, a lost gain if sold quickly instead of watching the market.
Your second home was a big purchase, likely involving a period of lengthy consideration before you signed the contract. If you are facing a difficult new financial situation, there shouldn’t be any reason your decision regarding the property should be any hastier. Take a moment and review your choices. After reviewing the field of options, you may come to the conclusion that the best fit for you is a fast and simple direct sale, in which case you can check out our process and inquire about a quick home sale today. Sell Your House Direct prides itself on transparency and offering a fair deal to its clients so they can escape the burden of their unwanted properties.
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