Key takeaways
- Cover down payments without liquidating investments.
- Stress test cash flow for vacancies or repairs.
- Keep emergency reserves in place after closing.
Know the financing hurdles
Second homes typically need 10–20% down; rentals may require 20–25%. Equity solves the gap without taxable asset sales.
Demonstrate that you can handle both mortgages using income, reserves, or projected rents.
Plan for the unexpected
Budget for maintenance, insurance, and potential HOA dues so the new loan amount fits your full expense picture.
Hold back several months of payments to weather vacancies or slower rental seasons.
Define your long-term play
Decide if you’ll hold the property, refinance into a different product, or sell for gains and reinvest.
Track cash flow quarterly so you can pivot quickly if the numbers shift.
Action plan
Model the new property’s budget, confirm reserve levels, and secure a cash-out quote before making offers.
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