Should I Rent Or Buy A Second Home?: In a recent video, I give you a tour of my holiday home in the prestigious Sandbanks in Poole, Dorset. It is a £1.8 million property, which I rent rather than own. If you would like to see this spectacular property for yourself, please watch the full video until the end. You can find the video at the top of this page or on my YouTube channel.
A lot of people are looking at getting a holiday home for their family. But is it better to own or rent? In this article, I will explore exactly what you need to consider when making this decision. Hopefully, by the end of this article, you will be in a position to make an informed choice! If you find this information helpful, please consider sharing it on social media to help others in similar circumstances.
1. Should I Rent Or Buy A Second Home? Pay For Your Rental With Passive Income!
If you want to buy a second home, you will need to put down a deposit. You will then need to make mortgage payments each month. Why not use that same pot of cash to buy an investment property that pays you each month? You can use the cashflow to pay for the rent on your second home. Then, you basically have a free holiday home!
It is always worth thinking about the opportunity cost of locking your capital up in a luxury purchase, rather than an income producing asset. It may be that the luxury ends up being worth the cost, but at least do the calculations for yourself before making a decision!
2. Should I Rent Or Buy A Second Home? Try Before You Buy!
Even if you are set on buying a second home, are you absolutely sure which one you want? Are you absolutely sure where you want it to be? Maybe you want a property directly on the beach, but maybe there are problems that come with that, which you are unaware of? Maybe you really love a certain area, but after a year you will be bored with it? Wouldn’t it make sense to take a test drive?
We have decided to rent different homes in different locations for a year at a time. This will give us an idea of what we like and what we don’t like. Consider doing the same.
3. Should I Rent Or Buy A Second Home? Understand The Difference Between A Luxury And An Asset!
Traditionally, any property purchase is considered an asset. However, I prefer Robert Kiyosaki’s definition of an asset. An asset is something that pays you money, a liability is something that costs you money. Your second home is a liability and a luxury purchase. It will cost you money. You should only buy luxuries like this if your passive income from other sources can pay for it.
If you don’t have a stream of passive income yet, and all your income comes from your job, I would suggest prioritising using the deposit money to buy an asset that will pay you every month. If your passive income will pay for your second home, however, then it all depends on whether this is the luxury you want the most. Take the time to consider all your options.
From Should I Rent Or Buy A Second Home To How Do I Buy An Investment Property?
Now that you have answered the question ‘should I rent or buy a second home?’, it's worth thinking about buying a property that pays you to own it! If you would like to learn how to invest in property, why not learn from a property expert? Join me at my next £1 training event!
On the course, you will learn how to:
-
Become a property investor using other people’s money so that you can get started straight away
-
Utilise the 5 different types of raised finance so that you know exactly what to offer and when
-
Find the perfect properties for the BRRR strategy
-
Recycle your money so that you can ‘rinse and repeat’
-
Build a power team you can trust, so that you can save time and money
-
And much more!
Tickets are only £1, and you can get yours here. If you are ready to take action, I hope to see you very soon!
