4 key considerations for buying your second home in Arizona
Arizona has emerged as one of the hottest real estate markets in the US in the last few years. Low property taxes and lucrative housing prices make it the perfect place for getting the maximum returns on your real estate investments.
So, if you’re planning to buy a second home, it’s only natural that Arizona would be high up on your list. But it’s essential to develop a deeper understanding of your budget, goals, and requirements before you take the plunge.
Buying a new property involves a series of complex steps, from choosing the right location and negotiating the rates to getting a thorough home inspection. It becomes even more difficult when dealing with Arizona’s high real estate prices.
In this blog, we’ve outlined a few crucial tips you should keep in mind before investing in a second home in Arizona. Let’s take a look.
1. Think Long Term
Spending a couple of weeks exploring Arizona’s tourist attractions, such as the Grand Canyon and Hoover Dam, will lure you into setting up a home in the state. But it’s essential to remember that real estate investments don’t go well with impulsive behavior.
You wouldn’t want to end up with a lavish duplex in a deserted neighborhood with limited opportunities to negotiate a resale.
That’s why it is important to keep your long-term goals in mind before you set out to buy a second home.
You should have a clear idea of whether you want to use the property as a holiday home, retirement abode, or rental property. Also, ask yourself whether you’re planning to retain the property or sell it a few years down the line.
Also, if you’re planning to use it as a rental, consider whether you’d prefer long-term tenants. Remember that long-term rentals come with various responsibilities, including renewing agreements and maintaining the property.
If you’re not ready to become a full-fledged landlord, you could consider renting your property to tourists for a few weeks or months.
The important thing is to have a clear picture of how you’re going to use your second home in the coming years and decades.
2. Don’t Skimp on Home Inspections
Buying a new property involves several costs, including brokerage, taxes, notary fees, and stamp duty. That’s in addition to the actual cost of the property. Considering the sky-high real estate prices in Arizona, it’s natural that you’d want to use every opportunity to cut costs.
But a home inspection is one area that you shouldn’t cut back on. Home inspections play a key role in helping buyers identify hidden repair costs before purchasing a property. Also, they’ll give you a clear idea of the annual maintenance costs associated with your new home.
A thorough home inspection will help you negotiate the best rates with the buyer. And you’ll rest assured that your property’s structural integrity, plumbing, and electrical systems aren’t faulty. It’ll result in significant cost savings in the long run.
Ask your neighbors, realtor, or acquaintances in Arizona for reliable home inspector referrals. Alternatively, you could search for home inspectors on the local online communities, Facebook groups, and Q&A forums.
3. Choose the Right Location
Ultimately, the location of your second home in Arizona will determine its return on investment (ROI). Instead of splurging on a sprawling villa in an upscale neighborhood, assess your budget and long-term goals before zeroing in on the location.
For instance, if you want to offer your property as a vacation rental, Sierra Vista and Yuma would be great options considering the excellent Airbnb occupancy rates. On the other hand, the high average monthly rent in San Luis and Green Valley makes them ideal for purchasing long-term rental properties.
It’s a good idea to consult an experienced realtor in Arizona to better understand property rates in different cities and neighborhoods. Also, they’ll help you evaluate various markets and identify the scope of appreciation. It’s equally crucial to have a clear idea of the local regulations and taxes.
4. Sort Your Budget
Factoring property costs isn’t enough for setting the budget for your second home. You need to account for various additional expenses, including legal fees, notary charges, taxes, and permits. Also, you’ll have to set aside some money for recurring costs, such as maintenance and repairs.
Arizona’s booming real estate market offers great potential for homeowners and investors. However, it’s essential to keep your long-term goals in mind before buying a property in Arizona.
When buying a second home, you have to be more careful about the tax implications and maintenance costs. Don’t forget to schedule a thorough home inspection to ensure that you’re getting a good deal.