How to Buy a House While Owning a House
Whether you're looking for a holiday home or an income from rent, buying a second home can be a risky investment, particularly if you're still paying down your first mortgage. Before taking the plunge, it's important to make sure you're not making a decision that could result in you losing both your homes a few months or years down the line. If you take the time to consider all the possible pitfalls, you can make a tidy profit from investing in a second home.
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Instructions
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Search for a home in an area you want to vacation in, that will attract reliable tenants and that is likely to increase in value
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Look into property taxes, insurance and any management costs in the area you plan to buy in.
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Consider whether now is the right time to buy. If the property market's tanking and interests rates are on the rise, you could quickly make a loss on your investment.
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Check your credit report for errors. If you still have an outstanding mortgage on your current property, any lender you approach is likely to take a close look at your finances. Any inaccuracies could mean the difference between approval and rejection.
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Settle on a property and search the market for the cheapest mortgage you can find. Consider the security of a fixed loan to protect yourself from rising rates.
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Hire a real estate attorney once you've secured a loan to tie up the deal.
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Tips & Warnings
You can claim tax relief on your mortgage interest payments as long as your personal use of the property exceeds 14 days or 10 percent of the time it's rented, whichever is greater.
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