Warm up to a great deal on a second home

By Justin Hunter

Pretty much anyone involved in the real estate industry these days are a little skeptical of what action should be taken during the next few months as we enter the New Year. The last twelve months were unexpected to say the least and this has buyers, sellers and investors all looking for advice on what to expect in 2007.
First off, 2007 is not going to magically change what was created in 2006. For the majority of the United States, there is much more of a supply than demand of inventory, which means most regions are still going to experience a buyer’s market. Whether this buyer’s market continues throughout the entire year seem to be the big question on everyone’s mind but if you are a savvy buyer or investor, this may be irrelevant.
The article, “It's A Good Time To Consider A Second Home,” written by Broderick Perkins and published January 8, 2007 in Realty Times explains how now may be the best time to invest in a second property, which will leave you financially secure during the latter part of the year when everyone else is struggling to buy and sell.
“Multiple offers are less common, speculators have left the buildings, even long term investors aren't showing their hand in some second home markets where housing prices have flattened or dropped.”
Combined with the fact that winter months prevent many potential buyers from actively pursuing a second home and you could cash in on the deal of a lifetime if you just think ahead and wear some warm clothes.
While 2006 became the year the fun stopped for investors and sellers, this was felt even more in the second home market. Naturally if people stopped buying primary residences the second home market would suffer even more; and that’s what happened.
“‘It's true that the real estate market has stabilized, but that's a good thing,’ says Karpinski, director of Owner Community for HomeAway.com, an online vacation home rental marketplace. ‘It's actually an easier leap of faith to buy when the market is normal than to buy when real estate prices are going up ten to twenty thousand dollars a month,’ said Karpinski, also author of ‘How to Rent Vacation Properties by Owner.’”
Everything is in favor for the homebuyer, especially one interested in a second home or vacation property. The influx of inventory is a relief for buyers as they now have time and leisure to purchase their dream home.
But second home buyers can really benefit by purchasing now in the colder moths. It is difficult to persuade buyers out to the cold to purchase a primary residence let alone have them make a major purchase on a second one. Overcoming this mentality can land you a great deal this winter.
The spring will bring more potential second home buyers into the forefront and while many deals will still be prevalent, the steals will be no longer available.
And those who want to take on the challenge of renting out their second property can make a significant monthly profit.
“HomeAway, Inc. surveys report the average weekly rate collected by vacation property owners is $1,656 and that rent is collected 20 or more weeks each year. That's enough to generate more than $750 in positive monthly cash flow on a mortgage that costs $2,000 a month.”
Sure, there will be some recurring costs but don’t forget about the beneficial tax breaks associated with owing a second home either.  
“These figures suggest that the average vacation home brings in more than $33,000 in rental revenue each year,” Karpinski said.
Whether you are in the market for a second home for investment or personal purposes, this winter may be your chance to strike the deal of your lifetime while everyone else is drinking a cup of cocoa.