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Second Home Q&A

The idea of a second home sounds positively luxurious, doesn’t it? You can spend your working life in a city, going about your normal business. Then the weekend hits and you can escape, but not to a holiday retreat – to somewhere that truly, genuinely, feels like a home.


The idea of a second home sounds positively luxurious, doesn’t it?

You can spend your working life in a city, going about your normal business. Then the weekend hits and you can escape, but not to a holiday retreat – to somewhere that truly, genuinely, feels like a home.

Then there is also the consideration of how good an investment opportunity a second property is, especially if you’re willing to take on a fixer-upper.

Think a second home might be for you? You probably have some questions, and fortunately, we’ve got the answers.

What Do People Use A Second Home For?

There are a variety of purposes of a second home, depending on what you want to achieve from it.

Holiday Home – While a second home is usually used more often than the bi-annual standard “holiday home”, it can serve much the same function. This means that you visit as a way to relax and escape your general, everyday life and do something different. The house is used primarily for pleasure purposes, with the investment angle a second thought.

Rental Income – For some, a second home is a route to financial security. The rental opportunities tend to be short-lived, as either holiday lets or services like AirBnB. If you don’t ever intend to use the property for your own purposes then that’s less of a second home, and more a rental investment property. If, however, you want to use it yourself and occasionally rent it out for short periods when you’re not there, it’s safe to class it as a second home.

Eventual Home – This particularly applies in circumstances when an owner has to live in a city for work, but wants to move out by the time retirement comes. A second home is visited frequently in these circumstances, though the main usage will be a few years down the line. This is the house they intend to retire to.

What’s A Better Investment – A Second Home Or A Rental Property?

While to an extent this decision depends on your personal finances, there are a few ways to figure what will work best for you. A second home might indeed be a better choice for you than a rental property. For one thing, your mortgage will be less complicated, and you won’t have to pay fees like landlord insurance. This could save you a lot of money in the long run, and you still have the capital accrued from paying the mortgage on the property itself.

If, however, you want to see a return on investment as soon as possible, then go for a rental property.

What Kind Of Second Homes Do People Buy?

The choices are literally limitless! The most popular options tend to be rural and offer a lot of open space. They are the perfect solution to the cramped living quarters you often find in most cities.

One of the best ways to go about looking for a second home is to keep a totally open mind. If you look for somewhere that fits an exact set of descriptors, there’s a very good chance you’re going to be disappointed. Who knows, your ideal second home might be locations such as those found on , or perhaps you’ll decide that you want a small cottage with a garden you can tend.


How Do You Know Which Home Is The “Second”?

This is a good question. For most people, it will be quite literal: their main home is the one they are living in when they acquire the second. However, it doesn’t have to be this way around.

There’s no particular need to differentiate the two. They will usually be involved in the same mortgage; many second homes are funded through mortgage extensions on current property, leveraging the assets they have built up. There’s no need for different insurance policies and they will have the same registration with a local authority.

So really, the “second” home is whichever one you choose it to be. For the sake of ease, it’s best to view the “first” home as your primary residence – it just keeps things neater.

What Does It Cost To Run A Second Home?

Aside from the mortgage costs, a second home is generally cheaper than your main place of residence. The reason for that is simple: you’re not using it as much. You should also see lower maintenance bills.

It’s worth keeping in mind that if you intended to use this property for short-term lets, the maintenance costs are going to escalate. Ensure you factor this in when you decide your rental rates.

What Does It Take To Get A Second Home?

The most common method of funding a second home is, as mentioned, by an extension on your existing mortgage. The equity that you have in your primary home is leveraged against the cost of the second home.

Does This Have Any Downsides?

Yes. If you fall into financial trouble, then both homes are at risk if you default on your mortgage payments. However, it’s worth keeping in mind that defaulting on your mortgage payment is bad whether you have one home or a thousand. If you’re curious about what happens when you can’t pay your mortgage, has some valuable advice.

If you’re going to invest a lot in improving a second home or building one from scratch on a plot of land, then it’s worth looking into mortgage insurance to protect that investment. This should cover you in the event you can no longer make payments, meaning your hard work won’t go to waste.

Should I Get A Second Home?

There’s no way of knowing your individual circumstances, but here’s a few pointers:

  • Just being able to afford a second home doesn’t mean it’s a good reason to get one. Check through the increased mortgage payments; look at your life schedule and see if you will have the time to put it to use.
  • If you intend to rent the property out short-term, make sure you are up to date on all the requisite legislation to do so.

So – are you tempted?