1. Look at the market to buy.

Are house prices cheap or expensive now? Try looking up a graph of household income to house prices and see if the city you are looking for has a high ratio relative to other cities. [1] Note that some cities such as New York and San Francisco may have historically been immune to similar ratios.

Talk to one, or more, real estate agents about the relative prices of homes. Even if you don't get a definite answer (it's hard to gauge whether the home market is cheap or expensive, because the information isn't always clear), you may get clues about certain markets to watch or even houses that are selling well. This information is valuable.

2. Assume that you will not be able to rent out your second home.

Is a second home still a safe investment without the rent contributing to the expense list? Otherwise, you should seriously question the decision to buy a second home. Too many families buy overpriced second homes, betting that they will be able to rent them out when they are not living in them. When renting out becomes unreasonable, impossible, or produces far less than expected, homeowners only find an investment that fails.

3. List the possible costs.

List all the possible costs of owning a home. Can you fit all of these costs into your budget while still leaving some free space? Yes, you are going to build equity with a second home, but if investing in a second home is making your money very limited each month, you may be better off waiting until you have paid off your first mortgage loan, for example. Here are some possible costs to consider:

• Property taxes. Different in every country; The average annual property tax in Los Angeles is $ 1,200 ($ 16 million) for a $ 100k (1.3 billion rupiah) home, or 1.2%. If the property taxes in the city you are considering are very high, check the real estate taxes in neighboring cities. You can save a lot of money on real estate taxes just by buying a home in a city near your desired location that doesn't have a high tax burden.

• Basic accounts. This should be much lower if the house is unoccupied for most of the year, but should not be neglected.

• Repair / maintenance costs. Houses are living things - they grow, they grow old, they need help. Consider the cost of regular renovations and maintenance services, such as landscapes. The yard and garden of the second home should be maintained if there are tenants, or if you are absent for part of the year. In the summer months, wild weeds and uncut grass advertises that the property is unoccupied. In cold climates, driveways and walkways that are not cleared of snow are an invitation to vandalism or theft.

• Increased insurance. Insurance costs may be higher because the property is not occupied for part of the year or because it is rented out.

• Property management services. Property management companies should be a big cost factor in your calculations, especially if you are buying a second home that is very far from your main residence. If you are renting out property, you will have to arrange for someone to provide emergency repairs to your tenant. If you have a remote vacation home, you need to make sure someone can check for frozen plumbing or roof leaks or any possible damage to the home during your absence.

4. Don't just rely on the same tax credits you might get for your first home.

Check with the IRS (or Dirjen Pajak in Indonesia) to find out what the tax implications for a second home will apply. For many people, the cost of a second home ownership tax is greater than the tax credit, especially if you live in the home a longer number of days than the number of days you rent it out.

For example, if you rent out the house for less than 14 days, you don't need to list the income. If you live in the house for fewer than 14 days in a year, your property is considered a business, and amounts to $ 25,000 (330 million rupiah) a year in deductible losses.

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