The Latin adage, caveat emptor, which translates ‘let the buyer beware’ is exemplified by a recent article from the Inman News Service. It chronicles the tale of second home buyers who were sadly surprised when arriving for their first winter stay at a remote mountain cottage, that the fireplace insert they had assumed stayed with the cabin, in fact, did not. Beyond reaffirming that buyers should take nothing for granted, unless it is stated in the sales contract, it also brings to mind the old saying about the word ‘assume’.

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House flipping has been getting a lot of attention in the media lately, and most of it is definitely not kind. Many investors who took out multiple loans to purchase properties intending to flip them, ended up getting stuck when the market started to stall. Many of the properties purchased by these investors are now in default or have already been foreclosed on.

But house flipping has been around for longer than the current boom-bust cycle. People have been buying fixer-uppers cheap, fixing them, and then reselling them for decades. It was looked on as an honest way to make a living. You’d find a nice neighborhood that had one or two properties that were run-down and often vacant (many times the owners had passed away and the heirs didn’t really want anything to do with the property). They were considered eyesores by others in the neighborhood. You’d track down the owner, make them an offer, and purchase the home at a good price. Then you’d go in and remodel the place to meet the needs of the current market. Then you’d sell the home for a nice profit, maybe $10,000 or so. The neighborhood came out a winner because it got rid of the eyesore and increased everyone’s property values.

For more on this type of house flipping, click here for an article from Minneapolis Real Estate Blog.

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If you own or are buying a second home, you should be aware that, as written, current tax laws encourage second home ownership by allowing deductions for mortgage interest, property taxes and other expenses on vacation homes. The Washington Post offers a detailed look at how buying and owning second homes can result in tax benefits.

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A recent Zogby International poll conducted for the Foundation for Community Association Research concludes that there is high satisfaction among owners of condos and town homes. The survey indicates that 7 out of 10 owners of condominium units or town houses are pleased with their purchase. This form of ownership is particularly popular for second home owners, for a variety of reasons.

For more information on the results of this survey, click here for the rest of the story from Realty Times.

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The Wall Street Journal has a great article on the process of renting out your vacation home, including some of the pitfalls. It’s a good place to start, especially if you’re considering purchasing a second home with the intention to use it yourself as well as renting it out (as opposed to just purchasing a home primarily for rental use).

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