Purchasing a Second Home in Queens, Brooklyn or New York City – Part 3/4

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Comparable Home Prices

Check comparable home prices in the area: this will give you a pretty accurate idea as to how expensive an average home might be in your area. Speak with real estate agents for this kind of information. Remember that the key to comparison homes is to look at sale prices and not listing prices. Use these figures as a rough guide: perhaps the 4-bedroom 3-bathroom nearby sold for $550,000 but that doesn’t mean the 4-bedroom 3-bathroom you’re looking at will.

Landlord Responsibilities

Queens

If you intend to rent out your new home to build equity, start familiarizing yourself with a landlord’s responsibilities. Don’t create any unnecessary legal problems for yourself due to laziness or being wilfully ignorant, because you will regret it. Here are some important things that, as a prospective landlord, you should start researching –

  • Understand how to terminate a lease or evict a tenant;
  • Know the laws of your state regarding security deposits and what they can and can’t be used for;
  • Understand how you’re legally obliged to structure the tenant screen process and the rental application process. According to anti-discrimination laws there’s a specific protocol you must follow;
  • Understand your duties regarding regular maintenance and repairs;
  • Ensure you’re protected from liability should tenant injury arise: remember that you’re liable for any serious accident which may involve a tenant that was the responsibility of the tenant to protect against or fix in a timely manner;
  • Know and understand the list of tenant’s rights, particular when it concerns privacy. Generally you’re required to give your tenant 24-hours’ notice if you wish to show or fix the property; emergency cases being the exception.
  • Seek legal advice! George Russo and Associates is your local real estate law firm, ready to assist with all aspects of real estate law. You need to be very clear on your legal position before becoming a landlord, and your legal agreements should either be prepared by a legal expert, or at the very minimum, checked for correctness. Why not contact us today. We’re experts in real estate law in the New York City, Queens and Brooklyn areas and can help you with any landlord issues.

Use a Trusted Real Estate Agent

Queens

You need a trusted advocate when going through the buying process so you should be looking for a good real estate agent; one with a minimum of five years’ experience in the specific area you’re looking at, to help you through the process. Your agent will be able to assist in narrowing down your housing search until you find what you’re looking for. Once you’ve completed the purchase your real estate agent will hopefully stay in contact with you; this is quite important for homeowners whose second home is quite a distance from their primary residence.

Financing Your Purchase

  • Secure your finance prior to deciding on the home! Being pre-qualified for a mortgage will determine what kind of home you can afford to purchase. Because this will probably be your second mortgage you should expect to pay a higher interest rate, and maybe even qualify for less money. Once you’ve fixed your total budget, put money aside for a down-payment.
  • To be successful in your application for a second mortgage your lender may look for a Debt-to-Income ratio of less than 36%; meaning that your total debts (and this includes your first mortgage) must be around a third of your monthly income. As an example, if you take in $7,000 per month and your debt is $2,500 your DTI is 35%
  • You will probably be required to put down 20% of the asking price. This money will have to come from the equity in your current residence or from your personal savings. You could also borrow against your retirement fund or life insurance policy.

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