Everything You Need to Know Before Buying a Second Home

Things to keep in mind when owning two homes at the same time, whether for convenience or income.

So you’re thinking of buying a second home, and no, it’s not about being tired of where you live now and wanting to move to a better neighborhood. We’re talking about keeping your current place and actually owning two homes at the same time.

Before you pull out that checkbook—actually before you even start seriously looking—there are a few important things to consider. The first question—why?—is crucial and will affect all your other considerations. Failing to truly define your objectives for your second home could result in your making the wrong decision.

The classic second home is the townhome. Long ago when families had estates, the real family home was the estate. However, the family would occasionally need to go to town either for business or for the social season. For this purpose, they maintained a townhome—a second, smaller house for them to live in when they were in town. These days many of us choose to live in the suburbs where the air is cleaner, the nights cooler and early morning is still wreathed in mist and birdcalls. But the long commute to work can be enervating. So we choose to find a modest place as a staging point during the workweek and go off to our country homes for weekends and holidays.

One other reason to purchase a second home is almost the precise opposite. Perhaps you are quite comfortable living in your existing home but wish to have a refuge, somewhere to go to when you want to relax. So you might want a country home or a vacation home.


If you are buying for investment, you will want to take into account resale value and attractiveness as rental property. For rental, you will generally look for something that is centrally located.

You could also require a second home (or a third and fourth) because you truly live a multi-location life. Perhaps your husband works in Singapore and you work in Hong Kong, and you have a daughter who goes to school in New York and another who goes to school in Manila. Another sort of multi-location life is a family with business interests in several cities. A second home might also be for giving to a child or parent or sibling; it could also be for investment or rental income.

Once it’s clear what you want out of your second home, it is time to create your specifications, which should consider four crucial factors: location, activity, storage, and budget.


You will wish to take into account accessibility—both for travel from your main home to your second home as well as its accessibility to facilities. For a townhome, you would look for accessibility to place of work or school. For a vacation home, you would look for accessibility to the activities you enjoy—say, a beach or skiing. Especially for a vacation home, you will want to take into account such matters as climate, weather, and the natural features of the location. Do you prefer the mountain to the sea? Do you prefer the starkness of desert cliffs to the fullness of forests? What about safety and reliability of service? Does it flood during the rainy season? Does the local government fumigate during dengue outbreak season? What is the water pressure like? You will also wish to consider peace and order in the area and perhaps its reputation for good government—or the lack of it.


If you are buying for investment, you will want to take into account resale value and attractiveness as rental property. For rental, you will generally look for something that is centrally located. You will also want to research the rental income on properties in the neighborhood.


When choosing the actual home, much like planning your own home, you will want to consider the two basics of activity and storage. Your second home must be able to accommodate all of the family activities you expect to take place in it as well as those you do not wish to engage in. There must also be enough space for what you need to store. For example, you might wish your vacation home to be a place for your extended family to gather. This means you will want large open spaces for gatherings and the capacity to sleep crowds. If you are a moody writer and mean for your second home to be a place where you can get away from it all but know you will need to share it with other members of the family, you will want to be able to create a quiet nook, secreted from the rest of the household. Remember that you may not spend a lot of time in your second home and you might not wish to spend too much time maintaining or even cooking in it.


Finally, you will need to consider a budget so be ready to compromise a little on your specifications. Condominium units in the central areas of Metro Manila usually cost 70,000 to 150,000 per square meter. There will be some exceptions, but prices will normally vary first by location and second by quality and amenities. For a house and lot, the price will be the sum of the lot price and the house price. Make sure you get a sense of lot prices in the area. You should be able to do this by scanning the real estate portions of the classifieds. Lot prices vary widely depending on location. The house price can be estimated by converting from a factor per square meter. This factor will vary depending on the structure and the finishing. Most construction types will begin with low estimates of about 15,000 to 20,000 per square meter. Older houses will have depreciation built in. The most expensive parts of a house are the finishing details, bathrooms, and kitchens. If there is extensive landscaping or facilities such as a pool or outdoor hot tub, be prepared to pay for those as well.


If you fall in love with something and money is no object, you might even want to put in a bid for a house even when it is not on the market.

Also, part of the budget should be the expenses of owning—annual taxes, maintenance and repair, and the costs of operating the house. For example, will you need a full-time staff to run the house? If you are buying for rental, consider the cost of compliance—e.g., income taxes and registrations.


Armed with your specifications, you are ready to begin looking. Narrow down your search by researching—surf the Net, talk to friends, read up on real estate deals. Once you have zeroed in on the possibilities, you are ready to visit your top locations.

The beautiful thing about new developments is that these put you in touch with the developer who will walk you through a model unit. Larger developers like Ayala have salespeople who point you to all of the Ayala developments and will probably keep you in mind for future developments. In fact, if you are earnestly looking and don’t mind e-mail messages and letters, it is a good idea to give your business card to reputable realtors and representatives of developers.

For existing condominium units, the lobby guard, receptionist or the building administrator is a good bet for leads on which units might be for sale. For houses, the subdivision guards are always a good bet for knowing which houses are on sale. Besides scouring the real estate ads, you might want to cruise down the streets of your chosen location. If you fall in love with something and money is no object, you might even want to put in a bid for a house even when it is not on the market.


Before entering serious negotiations, make sure you have a specialist look over the house to check for structural damage.

Before you begin to negotiate for the house of your choice, make sure that you have narrowed down to a short list of three to five. When you only have one on your list, you will be at a disadvantage during negotiations. Remember: All the work you put in at this stage of the game will save you from what could be a costly mistake at the end.


It helps to have some sort of computerized worksheet on which you run what-ifs on the financial aspects of the purchase, which is especially useful at the end stages. Here’s a starter checklist:

1. Basic specifications. Who are the people who will use this home and what do they need? Is it accessible and is it someplace you would love to live in?

2. Budget considerations. Make sure to draw an up-front budget (available cash and available credit) and an ongoing expense budget (dues, maintenance, and taxes).

3. Information per property. Get to know the immediate development vicinity. Check out the developer’s history. Inspect as thoroughly as you can for accessibility to roads and public transportation, facilities, available space, ambient noise and neighbors, and placement versus the sun and the roads. What kinds of views do you have? Can outsiders look into the private spaces of your house and do you mind?

4. Repairs and renovations. Before entering serious negotiations, make sure you have a specialist look over the house to check for structural damage, the integrity of wiring and plumbing or anything that might require repair or maintenance.


5. Legalities and compliance. Clarify all of your legal obligations. You will want to verify the status of the property. Have all taxes been paid? Is the property mortgaged? You will need to make sure that all legal attachment is cleared. Are you taking over the mortgage or are you paying in cash?

6. Expense forecast. At this point, a detailed expense forecast is a must, aided by your list of up-front expenses and your ongoing expenses. Remember to inquire into association dues and local permits for any renovation work you intend to undertake. After everything is in, put in at least a 20 percent buffer for repairs and renovations—something or other will crop up.

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Maya Baltazar Herrera
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